Boost for US gas as Obama sets out new climate policy

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US president Barack Obama has kept his promise to use his executive powers to take action on climate change in the face of an obstructive Congress. Under his direction, the Environmental Protection Agency (EPA) this month published details of a Clean Power Plan. If implemented, it would for the first time lead to cuts in carbon pollution from existing power stations, the single largest source of carbon pollution in the US.

It is the biggest-ever push in the US to take action on climate change and – some believe – could be a defining moment in Obama’s presidency. It is also seen as a boost for international climate negotiations in the run-up to the UN talks in Paris next year, where, it is hoped, a full international treaty will be agreed.

The proposed policy – which now enters a period of consultation, with final standards to be announced in June 2015 – has profound implications for all sectors of the US electricity generation industry. It is expected to reduce the use of coal and boost the use of natural gas and low/zero-carbon energy sources, especially renewables such as wind and solar power. It could also accelerate the development of carbon capture and storage (CCS) technologies.

“If Congress won’t act . . .  I will”: Obama made his pledge in his fourth State of the Union address in February 2013, when, controversially, he said: “If Congress won’t act soon to protect future generations, I will. I will direct my Cabinet to come up with executive actions we can take, now and in the future, to reduce pollution, prepare our communities for the consequences of climate change, and speed the transition to more sustainable sources of energy.”

 Barak Obama pledges action on climate change at State of the Union address in February 2013

(Source: Organizing for Action website)

Launching the proposals in early June, EPA administrator Gina McCarthy said: “EPA is delivering on a vital piece of President Obama's Climate Action Plan by proposing a Clean Power Plan that will cut harmful carbon pollution from our largest source – power plants . . . We don't have to choose between a healthy economy and a healthy environment – our action will sharpen America’s competitive edge, spur innovation, and create jobs."

If the proposals are implemented, carbon emissions from the power sector will have to fall to 30% below 2005 levels by 2030. As a “co-benefit”, particle pollution, nitrogen oxides, and sulphur dioxide emissions would fall by more than 25%.

The EPA claims that benefits of the new proposals would include the avoidance of up to 6,600 premature deaths, up to 150,000 asthma attacks in children, and up to 490,000 missed work or school days – “providing up to $93 billion in climate and public health benefits”. The EPA also claims that they would “shrink electricity bills roughly 8% by increasing energy efficiency and reducing demand in the electricity system”.

Power plants account for roughly one-third of all domestic greenhouse gas emissions in the US. Yet while there are limits in place for the level of arsenic, mercury, sulphur dioxide, nitrogen oxides, and particle pollution that they can emit, there are currently no national limits on carbon pollution.

Expecting opposition: Both the president and the EPA are keenly aware that the proposals will come under heavy fire from lobbies that will be affected, especially the US coal industry which has already been battered by the shale gas revolution. But the president looks determined to stand his ground.

In his weekly video address at the end of May, recorded at the Children’s National Medical Center in Washington, Obama said: “Special interests and their allies in Congress will claim that these guidelines will kill jobs and crush the economy.  Let's face it, that’s what they always say.

“But every time America has set clear rules and better standards for our air, our water, and our children’s health – the warnings of the cynics have been wrong.  They warned that doing something about the smog choking our cities, and acid rain poisoning our lakes, would kill business.  It didn’t.  Our air got cleaner, acid rain was cut dramatically, and our economy kept growing.”

The proposals provide guidelines for individual states to develop plans to meet state-specific targets to reduce carbon pollution and have been designed to give states as much flexibility as possible in how they meet these targets.

“States can choose the right mix of generation using diverse fuels, energy efficiency and demand-side management to meet the goals and their own needs,” says the EPA. “It allows them to work alone to develop individual plans or to work together with other states to develop multi-state plans.”

“Unprecedented outreach”: According to the EPA, the new guidelines are the result of “an unprecedented outreach effort” that builds on “trends already underway in states and the power sector to cut carbon pollution from existing power plants”.

In his weekly address Obama said: “These standards were created in an open and transparent way, with input from the business community.  States and local governments weighed in, too.  In fact, nearly a dozen states are already implementing their own market-based programmes to reduce carbon pollution.  And over 1,000 mayors have signed agreements to cut their cities’ carbon pollution.

“So the idea of setting higher standards to cut pollution at our power plants is not new.  It’s just time for Washington to catch up with the rest of the country.”

By Alex Forbes