Obama’s new US climate rules to promote gas over coal as power source

By MARK DRAJEM and ALEX NUSSBAUM
Bloomberg

President Barack Obama will issue a sweeping set of regulations to cut US power-plant emissions, the biggest carbon-pollution control effort by the world’s biggest economy that pressures other countries heading into global climate talks in Paris later this year.

Obama’s Environmental Protection Agency (EPA) on Monday will finalize measures that force states and utilities to use less coal and more wind power, solar and natural gas. The plan, estimated to cost $8.4 billion, is expected to go into effect in the next month or two but is likely to face a legal challenge that could stall its implementation.

Taken with other measures to curb methane emissions, spur private companies to use more renewable power and curtail the use of climate-warming refrigerants, the measure will transform how electricity has been produced in the US for a century. It puts the US on the path to cut emissions by 26% to 28% by 2025, according to the White House. With the US moving, others may be more likely to follow, analysts say.

This “indicates that the world’s largest economy is providing big regulatory incentives for clean energy and penalizing fossil fuels,” said Paul Bledsoe, an energy expert at the German Marshall Fund who served in President Bill Clinton’s administration. “It’s that basic underlying economic signal that tells governments around the world that it’s time to act.”

Largest Emitter

The US, the world’s largest emitter of carbon dioxide (CO2) before China supplanted it in recent years, has never implemented a global agreement to combat climate change. Negotiators from 195 countries are working on a deal that will bring about meaningful cuts by rich nations and the first caps from countries such as China. Getting all the nations to agree is one of the top priorities of the last 18 months of Obama’s tenure.

“It’s time for America, and the world, to act on climate change,” Obama said in a video message released on the White House Twitter feed.

The EPA plan is the centerpiece of Obama’s climate plan, and a year after it was first proposed it’s set to be released Monday. Obama will introduce it at a White House ceremony.

‘Special Interests’

“For too long we’ve seen Washington, DC, putting off and delaying serious action” on climate change,’’ White House spokesman Josh Earnest said in an interview on MSNBC Monday. “I have no doubt that special interests in Washington, DC, are going to squeal, as are the politicians who are in their pocket.”

The regulations are to take effect after publication in the Federal Register, but they may be stalled if opponents ask for stay while challenging in court.

According to documents released in advance, the final rule aims to accomplish a 32% reduction in carbon emissions from the nation’s power plants by 2030, compared with 2005 levels, against 30% in the EPA’s original 2014 proposal. Emissions are already down 15% from that peak.

The plan will accomplish the rest in part by giving states credit for solar or wind projects that break ground in the next few years, before the rule takes effect in 2022. It will also force utilities to run natural-gas plants more or encourage customers to use less electricity.

Power generation, specifically burning coal to make electricity, is the biggest source of carbon pollution in the US. Until now, there was no cap on those emissions.

Clean Energy

“The way electricity is being produced is being significantly transformed,” said Michael Brune, president of the Sierra Club. “It will amount to a move away from fossil fuels toward clean energy.”

Power plants burning coal produce almost 40% of the nation’s electricity, down from about half just a few years ago. That’s forecast to decline to 27% by 2030 under these new rules.

The general EPA plan is a set of targets for states. Each will have to submit plans to the agency by 2018 -- two years later than called for in last year’s draft -- on how it will achieve the EPA-mandated goal. The targets will phase in between 2022 and 2030.

The EPA’s initial proposal would have forced states with a lot of natural-gas plants, such as Arizona, to make cuts in emissions of more than 50% by 2030. Meanwhile, coal-heavy states including Kentucky, West Virginia, Wyoming and Montana faced cuts of 21% or less.

Uniform Goals

The EPA tweaked its forecasts for the amount of natural-gas and renewable-energy growth it estimates can be accomplished in those states.

“At the end of the day, you will see state goals more uniform,” said Brian Deese, a White House adviser on energy and climate.

The White House says that while it’s backing off on an initial deadline for the rule and making other changes to help states, the final plan will lead to more reductions in greenhouse gases because it will boost carbon-free energy and rely less on switching from coal to natural gas. The incentive plan will also reward states that submit plans to the White House early.

“In today’s marketplace their best compliance option is clearly solar,” Rick Umoff, counsel for the Washington-based Solar Energy Industries Association, said in an e-mail. A more flexible timeline under the plan “will only further encourage states to act early so they can take advantage of the booming solar economy and any compliance incentives that the EPA might offer.”

Democratic presidential candidate Hillary Clinton said the plan is “a significant step forward” in meeting the threat of climate change.

Legal Challenges

Coal producers are not as happy.

“EPA’s final Clean Power Plan reflects political expediency, not reality for supplying the nation with low cost reliable power,” said Hal Quinn, president of the National Mining Association. On Monday, the group will file a stay to try to stop the plan from going into effect, he said.

The regulation is also expected to face lawsuits from coal-dependent states, coal producers and some utilities or power cooperatives. They argue that the EPA is exceeding its authority and forcing a reorganization of power generation for which it doesn’t have the legal mandate.

Those legal challenges may mean the rule never takes effect, Senate Majority Leader Mitch McConnell, a Kentucky Republican, warned the US negotiating partners earlier this year.

“Even if the job-killing and likely illegal Clean Power Plan were fully implemented, the United States could not meet the targets laid out in this proposed new plan,” he said in a statement March 31. “Our international partners should proceed with caution before entering into a binding, unattainable deal.”

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