Obama proposal angers coal industry, including
Southern Indiana's Duke Energy
Mar 8 - McClatchy-Tribune Regional News - David A. Mann The Evening News and
the Tribune, Jeffersonville, Ind.
A White House proposal to use a cap-and-trade system to reduce emissions has
drawn criticism from top Indiana officials and those in the coal industry.
The proposal -- included in President Barack Obama's recently released
budget -- is meant to curtail the release of the green house gas carbon
dioxide, or CO2. Many scientists believe the gas to be a primary culprit
behind global warming.
Under the proposal, companies would buy federal emissions permits in order
to continue to release green house gas.
A 2008 Brooking Institute Study said the Louisville metro area, which
includes several counties in Southern Indiana, has one of the worst carbon
footprints among the nation's metropolitan areas. Duke Energy, Southern
Indiana's primary electric provider, has a coal fire plant in New Albany.
"The president's plan calling for auctioning 100 percent of carbon
allowances is nothing more than an unfair carbon tax, the bulk of which will
be borne by electric customers in the 25 states that depend on coal for most
of their electricity," Duke Energy said in a statement provided by
Communications Manager Lew Middleton.
"This will punish coal states for decisions approved by state utility
commissions decades ago when building coal plants was a key part of our
national energy policy," the statement said.
The company estimates electricity rates could increase by 40 percent in
Indiana. Kentucky could see a 30 percent rise in rates.
The program would set a cap on carbon emissions. If a company wants to go
over the cap, it has to buy an allowance at a cost of $20 per ton of carbon.
At a meet and greet in Jeffersonville last week, Gov. Mitch Daniels, a
Republican, expressed dismay at the proposal.
"People on the coast … have pointed a giant cannon at states like Indiana
and Kentucky," which use coal for energy, he said.
"I honestly hope that we will think twice before we pile another enormous
burden on this economy."
Rep. Baron Hill, D-Ind., said he's committed to working with the
administration on energy issues. However, he said, coal has to be a part of
the solution.
"Coal currently accounts for 50 percent of the electricity generated in our
country, including about 92 percent of power in Indiana," Hill said.
"We must recognize that clean coal -- along with many other new sources of
energy -- will be a part of our future, and take steps to further the
deployment of new technologies."
Duke Energy would like the carbon allowances initially allocated at no cost
and then eventually be auctioned.
That way, electric rates would increase gradually and carbon emissions would
still decrease.
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