• Energy Tax Facts
  • 1 Jul 13

Penn Energy: Energy sector reacts to Obama climate change plan

Making climate change the centerpiece of his second-term energy policy, President Barack Obama unveiled a package of about a dozen policies his White House said will change the way American makes and consumes energy.

In the absence of Congressional action, the president’s energy policy push relies heavily on the Environmental Protection Agency’s ability to regulate carbon dioxide under the Clean Air Act.

The Obama administration and the Environmental Protection Agency (EPA) have already begun steps to regulate carbon dioxide and other greenhouse gases from newly built power plants, but rules to regulate the nation’s existing power generation fleet are still being written. In his June 25 speech, Obama said he would direct EPA to finalize and implement these rules.

The package of policies also included measures to boost the country’s energy efficiency and approve renewable energyprojects on public lands through the Department of the Interior.

Marty Durbin, president and CEO of America’s Natural Gas Alliance, said natural gas could have a place in helping the U.S. lower its overall carbon emissions.

“While many details are yet to come, it’s worth noting that President Obama again recognized the benefits of natural gasas an American source of energy that is clean, reliable and affordable. Thanks in large part to natural gas, our nation’s carbon emissions are at 20-year lows, a milestone accomplished principally though market forces that can be traced directly to the shale gas revolution in states and communities across the country.”

Durbin went on to say he hoped the president would focus on the job creation potential of natural gas rather than pursuing tax polices and regulations that put the fossil fuel sector at risk.

“We’re concerned, therefore, that the president continues to single out the oil and natural gas industry for punitive tax treatment. Like all other capital-intensive industries, cost recovery is critical to the success of the natural gas industry. So, for example, eliminating the Intangible Drilling Cost deduction would lower investment and production, not only increasing natural gas costs, but diminishing our ability to deliver the jobs, environmental benefits and energy security that come with domestic natural gas production.”

Representing the coal industry, the American Coalition for Clean Coal Electricity’s president and CEO Mike Duncan said coal-fired power generation is already well on its way to producing energy with fewer emissions.

“Coal power has evolved significantly over the past decade. Thanks to clean coal technologies, coal-based electricity continues to dramatically improve its environmental footprint. The newest coal-fueled power plants operating today are highly efficient, utilize less coal, and have lower emissions. Coal power is necessary to meet future energy demands and is progressing as quickly as technology is evolving.

Duncan went on to address EPA regulations, adding that federal standards do more harm than good if they are not practical.

“We do not believe EPA regulations are an effective way to address concerns about global climate change. However, if EPA proceeds with regulations, they should be based on adequately demonstrated technology and provide an achievable timeframe to allow the coal industry to continue advancing clean coal technologies. If the government creates standards that are not practical, they risk not just shutting down existing plants but also halting the development of additional clean coal technology facilities. Taking America’s most significant source of electricity offline would have disastrous consequences for our nation’s economy.”

Moving on to renewable energy, Rhone Resch, president and CEO of the Solar Energy Industries Association (SEIA), said future generations will remember how the U.S., at this point in its history, acted to face climate change.

“Today, climate change is a real and growing threat to America and the rest of the world. It’s indisputable. Climate change threatens our economy, our future progress, our health and safety, and even our way of life. Every day, the Earth suffers a little more from human neglect. We can’t wish this problem away, and pointing fingers won’t solve it, either.

Resch said the solar power industry is ready to produce emissions-free renewable energy.

“Today, more than 30 utility-scale, clean energy solar projects are under construction, putting thousands of electricians, steelworkers and laborers to work and helping to reduce carbon emissions from power plants… There is now more than 8,500 megawatts (MW) of cumulative solar electric capacity installed in the U.S. – enough to power more than 1.3 million American homes.”

Tom Kiernan, CEO of the American Wind Energy Association (AWEA), said the American wind energy industry appreciates Obama’s focus on climate change action.

“AWEA supports climate policies to achieve science-based greenhouse gas targets,” Kiernan said. “And since wind energy is the leading solution to power-sector carbon emissions, we’re ready to do our part to help America address global warming, especially in the early years of the climate protection effort when few other solutions are as readily deployable and scalable.”

Marvin Fertel, president and CEO of the Nuclear Energy Institute (NEI), said nuclear power must be part of any serious plan to address carbon dioxide pollution.

“The strength of America’s electric system is diversity of technologies and fuel types. When it comes to reducing the U.S. electric sector’s greenhouse gas emissions, efforts can succeed only if carbon-free nuclear energy plays a larger role in the nation’s electricity mix,” Fertel said.

Nuclear energy already produces nearly two-thirds of America’s carbon-free electricity, he said.

“As a nation, we cannot reach our energy and climate goals without the reliable, carbon-free electricity that nuclear power plants generate to power our homes, businesses and infrastructure,” he said.

Jo Ann Emerson, CEO of the National Rural Electric Cooperative Association (NRECA) said the president’s proposals would raise electric utility bills for American consumers.

“Electric cooperatives oppose President Obama’s proposal to use the Clean Air Act to reduce carbon dioxide emissions from power plants. America’s rural communities depend on coal-fired generation for affordable electric power and would be disproportionately penalized by this scheme. Folks in rural communities and those with low or fixed incomes already spend more of their household budget on energy; this proposal would increase their burden. The President’s proposal would be, in effect, a regressive new climate tax on America’s most economically vulnerable citizens.

NRECA and America’s electric cooperatives will fight this proposal at the agency level and in the courts if necessary, Emerson said.

The House Sustainable Energy and Environment Coalition released a statement welcoming the provisions of the president’s plan.

“SEEC welcomes the President’s plan to reduce carbon pollution and curb the threat of climate change. The effects of climate change are already beginning to show, evidenced by recent extreme wildfires, floods, droughts, and hurricanes, and are coming at a high cost to the American people. Addressing this issue is a moral and fiscal imperative,” according to the SEEC.

“While far too many in Congress question settled science, climate change won’t yield to partisan gridlock. Addressing this issue is part of our moral responsibility to protect the health and welfare of current and future generations. SEEC Members will continue to fight for policies in Congress that will address climate change, and will press our colleagues on both sides of the issue to take action. The time to act is now and we applaud the President’s leadership,” according to the statement.

Tom Kuhn, president of the Edison Electric Institute said in a statement that the country’s shareholder-owned electric utilities want to ensure that carbon-cutting regulations are achievable and will minimize additional costs.

Kuhn also stressed that the electric power industry has long understood the importance of addressing climate change and has been a leader in reducing criteria pollutants and greenhouse gas (GHG) emissions over the last two decades.

“We look forward to working with the administration as it further develops its climate plan and with other key stakeholders, including Congress and the states, which will play a critical role in helping to forge workable regulations,” Kuhn said.

Conservative political action group, Americans for Prosperity, said the EPA’s regulations could imperil as many as 1.4 million jobs.

“Using the EPA to drive up electricity prices will have a negative impact on American families, their pocketbooks and their standard of living. The president claims to care about jobs and the economy, but his EPA regulations and resulting higher energy bills will only hurt the little guy, the senior citizen, the single mom on a fixed income,” AFP President Tim Phillips said.

According to a release from the Sierra Club, an environmentalist group, the White House plan will have a positive impact on public health.

“Today’s climate announcement from the White House demonstrates the kind of bold leadership we’ve been waiting for to put us on the right path to fighting the ever-growing climate crisis. We are heartened by his commitment to taking this giant step forward toward meeting our carbon reduction and clean energy goals,” according to the Sierra Club.


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