Indiana Gov. Mitch Daniels told a conference of industrial energy customers that the pursuit of “green jobs” and alternative fuels could increase energy costs without improving the environment.

Daniels said Indiana’s manufacturing industries rely on affordable energy. He contends the proposed caps on carbon emissions pending in Congress are misguided and “rockheaded.”

Daniels spoke Wednesday during the Indiana Energy Conference at IUPUI.

The Daniels administration has pushed for increase production of ethanol, biodiesel and wind power. But the governor said it’s a fantasy to believe such sources can completely replace fossil fuels such as oil and coal.