US climate bill to hurt economy:future Chevron CEO

WASHINGTON Oct 27 (Reuters) - The incoming chief executive of Chevron Corp (CVX.N) added his voice to the many petroleum interests that oppose climate legislation in the U.S. Congress, saying it could harm the economy.

"As written, these bills would lay heavy new costs on every family and business in the U.S.," John Watson, who will become CEO of Chevron on Jan. 1, said at a meeting at the U.S. Chamber of Commerce.

He said climate bills in both the Senate and the House of Representatives "can do far more harm than good to our economy and American workers."

The bills would burden petroleum businesses with hidden costs on transportation fuels like gasoline and diesel, he said.

In June, the company's current CEO, David O'Reilly, said efforts to cut U.S. carbon emissions by 80 percent by 2050 were unrealistic.

Watson took that a step by saying that the short-term goal in the Senate bill of cutting greenhouse gas emissions by 20 percent under 2005 levels by 2020 was not possible.

"Even with the best of intentions and an all out effort, we will only get part of the way there," Watson said.

Backers of climate legislation say a price on carbon would spur companies to invest more in low-carbon fuels like wind and solar power, advanced biofuels, and energy conservation.

But passage of climate legislation is unlikely this year, in part because senators from energy-intensive states that have already lost many jobs to the recession fear that it could cost even more jobs.

Many oil companies have said the climate legislation would boost fuel prices because the firms would not be given enough carbon credits in the early years of the program.

In a cap-and-trade market favored by the House and Senate as well as President Barack Obama, polluters would have to turn in a credit for every ton of carbon they emit.

Many permits, also known as allocations, in both the Senate and House bills would be given away to companies in the early years to ease costs on industry. [ID:nN26184796]

The Senate version of the climate bill, which built on legislation passed narrowly in the House in June, would give 2.25 percent of permits to emit greenhouse gases in a cap-and-trade market to refineries.

It would give larger amounts of the credits to power and natural gas distribution companies, which would be required by states to protect consumers from rising energy prices.

A Chevron spokesman who spoke to reporters after Watson's speech said the company would not comment on whether refiners should get more of the credits. (Additional reporting by Braden Reddall in San Francisco; Editing by Christian Wiessner)