Apr 23 - The News-Sentinel (Fort Wayne, Ind.)

Carbon emissions are going to be regulated by the federal government. When that happens, no consumer and no sector of the economy will be insulated from the effects, said attorneys specializing in energy policy at a forum on renewable fuels Tuesday in Fort Wayne.

"The cost of emitting is going to be pushed into every single activity and every business in the world," said Terry Hall, an attorney with the Indianapolis office of Baker & Daniels.

For decades, economic expansion has boomed under the influence of "cheap energy without consequences," Hall said. "That scenario is gone."

U.S. energy policy now is split between two goals: providing energy security and heading off climate change, Hall told about 35 people at the Northeast Indiana Innovation Center on Stellhorn Road.

Evidence of that split is as close as the 2007 energy bill, and it carries over in the federal farm bill. The energy bill raises the required average fuel economy of cars to 35 mpg by 2020 -- a standard that will have a huge impact on Indiana, said attorney Andrew Ehrlich, also of Baker & Daniels in Indianapolis.

The new standards don't stop with cars. Incandescent bulbs are in their last years. Energy-efficient requirements for air conditioners, refrigerators and heat pumps also will become more stringent. And because the law calls for eventually using 36 billion gallons of alternative fuels each year, but caps corn-based ethanol at only 15 billion gallons of that amount, "policymakers are shifting to other competing fuels," Ehrlich said.

In some cases, reducing manmade emissions of greenhouse gases and promoting energy security are compatible -- through energy conservation, for example. But there are times when a route to energy security -- such as burning more coal -- would be blocked by restrictions on greenhouse gases. Until it's clear which is more important, some key business interests won't be able to assess financial risk accurately enough, Hall said.

"The effects of climate change are ultimately going to become a bigger driver than energy security," she said.

The first big step toward restricting greenhouse gases will come later this year, when the Environmental Protection Agency issues its first standards requiring businesses to report emissions of those gases. Another clear sign of greenhouse-gas regulations is that all three presidential candidates favor cap-and-trade systems, Hall noted. Such a system would impose limits on businesses' emissions. Companies that reduce their emissions could sell credits to other companies.

Hall said new regulations on greenhouse gases would not be a penalty-only policy. Emissions could bring opportunities, such as farmers selling carbon credits based on land they don't put into production.

Fort Wayne business consultant OnCallPSN sponsored Tuesday's forum.

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