April 09, 2010
Ken Silverstein
EnergyBiz Insider
Editor-in-Chief
No issue has been as politically polarizing as climate change. With the positions of both the right and the left mostly predictable, the power is now in the hands of the political and industrial moderates.
Legislation to curb greenhouse gases may be stalled on Capitol Hill where the administration has lost its filibuster-proof majority in the Senate. But regulations released by the U.S. Environmental Protection Agency to reduce such heat-trapping emissions are moving forward. That should force Congress' hand, which can either step up and write its own rules or live by what the federal agency is imposing.
"If you try to regulate the power industry under the Clean Air Act, you're likely to see a glorious mess result in that," says Glenn English, chief executive of the National Rural Electric Cooperative Association during the EnergyBiz Leadership Forum. "We also take note of the fact that each and every year the rules and requirements under the Clean Air Act will change, and therefore, we're not going to know what we have to deal with from year to year, therefore the uncertainty."
In April 2007, the U.S. Supreme Court ruled that carbon dioxide and other greenhouse gases could be regulated under the Clean Air Act. And on December 15, 2009, the EPA published its final rule, noting that such releases would endanger public health and welfare. Congress, obviously, has the power to alter or to suspend that authority -- something that could be done through the existing climate bills.
But therein lays the paradox for conservative lawmakers: At the heart of their concerns is the fundamental disbelief that manmade greenhouse gases from power plants and automobiles are causing global warming. They not only think legislation is unnecessary. They also think that the EPA has gone overboard here.
Progressives disagree vehemently, noting that the world's leading scientists have reached the undeniable conclusion that manmade emissions from greenhouse gases are causing the earth to warm. They acknowledge that some of the same scientists have published a few faulty conclusions but that the overarching findings remain untarnished.
With the two positions at loggerheads, it has given those in the middle a chance to intercede and to try and find common ground. Utility executives who spoke at the EnergyBiz Leadership Forum said they stand in the center and are willing to curb their carbon emissions under reasonable timeframes.
"We've taken a position over three years ago in support of federal legislation, carefully crafted, workable and balanced legislation," says Mark Crisson, chief executive of the American Public Power Association. Even with all the uncertainty that now exists in Congress, Crisson adds that most of the folks in the utility industry are moving towards greener and less carbon-intensive generation portfolios.
Leveraging Power
While the thinking is that climate legislation has stalled, it will eventually regain traction. That's why energy types want more assurances, or more specifically, to be able to value a ton of carbon so as to better plan for the kinds of electric generation to build.
EPA is now the target of multiple legal and legislative actions meant to stop it altogether, or to at least slow it down. But it is vigorously defending itself, noting that by acting to limit carbon emissions it is safeguarding the environment and protecting jobs. Without such regulatory actions, EPA Administrator Lisa Jackson has said that power plants and other industrial types would have "little incentive" to implement modern technologies.
"Supposedly, these efforts (to stop regulation) have been put forward to protect jobs," says Jackson, in a speech. "In reality, they will have serious negative economic effects." The unease that she and others have is that other nations would then become the focal point for producing those same green energy technologies.
Already, Jackson has modified the agency's stance by effectively delaying the regulations for one year. The earliest that any utility would be obliged to comply with the new rules is 2011 and even then, it would only apply to recently-filed clean air permits. Companies that would get their applications in this year would be unaffected.
The regulation would shape power plants and other factories that emit 25,000 tons or more of carbon dioxide a year. If such facilities are modernized, or if new ones are built, they would then be required to install "best available technologies." Even then, the administrator says that the agency is now looking at "substantially" raising that threshold and giving many of the smaller polluting businesses until 2016 to comply.
Beyond the legal challenges, two critical legislative efforts are pending: The first is from Sen. Lisa Murkowski, R-Alaska, who is the ranking member of the energy and natural resources committee. Her bill would prevent EPA from regulating carbon emissions from any source whether they be cars or power plants. The second has been written by Sen. Jay Rockefeller, D-W.V. His measure would require the EPA to wait two years before implementing its rule -- or enough time for lawmakers to write their own laws.
"We must set this delay in stone and give Congress enough time to consider a comprehensive energy bill to develop the clean coal technologies we need," says Rockefeller. "At a time when so many people are hurting, we need to put decisions about clean coal and our energy future into the hands of the people and their elected representatives, not a federal environmental agency."
Strategies to completely derail carbon cuts are unlikely to prevail given that the majority on Capitol Hill favors some action. But the pace of that momentum remains open to question. In the months ahead, moderate forces in both the industrial and political worlds will increasingly leverage their weight in this arena.
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