24 January 2013 19:41 [Source: ICIS news]
By Joe Kamalick
WASHINGTON (ICIS)--President Barack Obama has revived climate change as one of his top priorities for his second term, and there are indications he will give the Environmental Protection Agency (EPA) full rein to force sharp reductions in emissions by industry.
The president’s strong and unexpected call for action on global warming issues has US refiners, utility operators and other industries worried.
Although Obama made only passing references to climate change during the presidential campaign, he used his inaugural speech on Monday this week to elevate global warming issues to a top priority.
Saying that the US has obligations not just to our own interests but to the world at large and generations yet to come, Obama said: “We will respond to the threat of climate change, knowing that the failure to do so would betray our children and future generations.”
“Some may still deny the overwhelming judgement of science,” he said, referring to those who question global warming in general or mankind’s role in it, “but none can avoid the devastating impact of raging fires and crippling drought and more powerful storms.”
“The path towards sustainable energy sources will be long and sometimes difficult,” he added. “But America cannot resist this transition. We must lead it.”
Apparently referring to his first term funding for solar, wind and other alternative energy projects, he said: “We cannot cede to other nations the technology that will power new jobs and new industries. We must claim its promise.”
He said that those investments will maintain US economic vitality and the nation’s natural resources.
In reporting Obama’s inauguration, the New York Times noted that the president devoted eight sentences to his new emphasis on global warming concerns, more than he devoted to any other topic in his speech.
But how is Obama to pursue his high-priority global warming policy? It will not be through legislation in Congress, where efforts to enact a cap-and-trade bill failed – at a time in the president’s first term when Democrats had solid majorities in both the House and Senate.
The day after the inauguration, White House spokesman Jay Carney was asked whether the new global warming policy emphasis would mean a new legislative effort.
Carney indicated that the White House would not be seeking any additional legislative efforts, noting that “there is bipartisan opposition to legislative action [on global warming], as there was in the first term”.
Asked if Obama still supports a cap-and-trade approach to reducing emissions of greenhouse gases, Carney said yes, but that the president would not seek congressional action.
“He put forward and worked on [cap-and-trade] legislation that did not succeed in Congress because of the opposition that exists there,” Carney said, adding: “And we are mindful of the fact that opposition exists there.”
“But that doesn’t mean – going back to the sort of overall premise of his speech – that we can’t or shouldn’t continue to make progress to deal with what is an important issue and a priority of his,” Carney said.
With the legislative path to advancing climate change policy seemingly abandoned, the White House appears poised to unleash the EPA, using existing law to put in place emissions limitations.
There is broad speculation that the EPA will take steps later this year to impose carbon emissions limits on existing electric power generating facilities.
The agency has already proposed rules – expected to be made final in the first quarter – that impose carbon emissions limits on any new power plant projects. Those limits effectively mean that no additional coal-fired power plants will be built in the US.
Some analysts believe that once the limits on future power plants are in place, the White House and the EPA will move to extend those emissions caps to existing generating capacity, about half of which is coal-fired. Depending on what emissions limits the EPA might set for existing power utilities, many or most of those coal-fired plants would likely have to be phased out.
On Wednesday, Senator David Vitter of Louisiana, the ranking Republican on the Senate Environment and Public Works Committee, charged that the White House and the EPA were purposely concealing regulatory plans until the last minute.
In a letter to EPA administrator Lisa Jackson, Vitter argued that the White House was hiding developing plans by the EPA to limit emissions by utilities and industry.
“The administration is either intentionally hiding its regulatory agenda,” Vitter said in his letter to Jackson, “or the leadership is in complete disarray.” He charged that there “appears to be a coordinated effort across agencies to keep the American people in the dark” and to distract Congress from the EPA’s plans.
Not surprisingly, US electric utility operators are uneasy about what the new White House climate policy might portend.
Eric Segal, director of the Electric Reliability Coordinating Council (ERCC), a power industry coalition, worried that Obama has embraced a broad agenda on climate change that could negatively affect utilities and the national economy.
“The president missed the opportunity to remind listeners that climate change is an international phenomenon which will require international solutions,” Segal said.
“Inflexible national policies unfortunately restrain our economy without delivering promised solutions,” he added.
Charles Drevna, president of the American Fuel & Petrochemical Manufacturers (AFPM), cautioned that the president’s renewed focus on climate change “may please environmentalists, but it will have no effect on the conduct of other nations”.
Drevna also wondered how Obama would reconcile his energy policies with climate change goals.
“It remains to be seen how climate change fits into President Obama’s stated goal of an ‘all of the above’ energy strategy, which reasonably would include fossil fuels,” he said.
“The president can choose to lead the nation to prosperity and economic security by allowing the emergence of a manufacturing renaissance, which is within reach solely because of our abundant supply of oil and natural gas,” Drevna said.
“Or, he can choose to pander to the misguided belief that sun, wind and vegetable oil can sustain our energy needs,” he added.
“Subjecting the oil and natural gas industry to additional burdensome and costly regulations to reduce carbon dioxide emissions … will have no effect on global warming,” Drevna said, noting that EPA administrator Jackson conceded as much in recent congressional testimony.
The American Petroleum Institute (API) also warned that additional regulatory or tax burdens on conventional energy resources would be counter-productive to climate interests.
API spokesman Carlton Carroll said that the oil and natural gas industry “is leading the way in lowering carbon emissions … in large part because of the abundant supplies of clean-burning natural gas brought by the shale revolution in America”.
“As a result, the amount of carbon dioxide being released into the atmosphere in the US has fallen back to 1992 levels – that’s a 20-year low,” he said, noting too that the oil and gas industry is the largest single investor in low- and zero-carbon technologies.
Paul Hodges studies key influences shaping the chemical industry in Chemicals and the Economy
For the latest chemical news, data and analysis that directly impacts your business sign up for a free trial to ICIS news - the breaking online news service for the global chemical industry.
Get the facts and analysis behind the headlines from our market leading weekly magazine: sign up to a free trial to ICIS Chemical Business.
|ICIS news FREE TRIAL|
|Get access to breaking chemical news as it happens.|
|ICIS Global Petrochemical Index (IPEX)|
|ICIS Global Petrochemical Index (IPEX). Download the free tabular data and a chart of the historical index|
Asian Chemical Connections