President’s Climate Plan Begins its Journey

American Association of Petroleum Geologists (AAPG)

The president’s Climate Action Plan, released June 25, aims to slow the effects of climate change.

The brief, 21-page plan focuses on three areas of action:

  • Reducing carbon emissions.
  • Preparing for the impacts of climate change.
  • Stimulating international efforts to reduce carbon emissions.

The president’s plan aims to reduce greenhouse gas (GHG) emissions 17 percent below 2005 levels by 2020. The Environmental Protection Agency (EPA) reports that 2011 total GHG emissions were 6.9 percent lower than 2005 levels. This is on track to meet the goal, but carbon emissions from the energy sector declined at an even faster rate: an 8.1 percent reduction from 2005 to 2011.

President Obama does acknowledge the huge benefit the shale gas boom has provided in reduced greenhouse gas emissions. Rapid growth in wind, solar and geothermal power also has helped.

The plan would accomplish its goals through administrative regulation and rule making, working with states and local government, and spurring international action. Many of the activities already are under way, funded by existing budgets and the Hurricane Sandy Relief Bill.

New laws are not part of the administration’s approach. This probably reflects the understanding that Congress is unlikely to pass any budget-increase or emissions-reduction legislation.

Climate change is an especially divisive subject: Members of Congress are sharply divided on whether climate change is caused by human activity and whether the federal government should act to reduce GHG emissions.

One element of the plan that may be difficult to implement is the call for federal agencies to accelerate permitting of clean energy installations, such as renewable energy generating facilities and electric grid refinements. Accelerated permitting will be hindered by recent and future budget cuts.

The plan reiterates the president’s call to develop the first quadrennial energy review, a strategic roadmap to drive innovation in domestic energy sources. The White House Office of Science and Technology Policy will lead the review in coordination with federal agencies and outside stakeholders.

For many years, liberal and conservative politicians and scientists have complained about the lack of a national energy policy. The energy review could answer this complaint – or merely highlight the sharp differences in public opinion about energy.

However, since the president’s June announcement, administration officials have clarified that the quadrennial review probably will not be comprehensive, but focus only on energy infrastructure.

The climate action plan does not discuss the Keystone XL pipeline nor the presidential permit that the State Department is considering. While announcing the plan, the president did announce that he would only approve the pipeline if it does not “significantly exacerbate the problem of carbon pollution.”

The two topics, however, are separate.

Reducing Carbon Emissions

The most impactful and potentially contentious element of the plan is the president’s call for the EPA to expedite release of its carbon-emissions standards for new and existing power plants.

The EPA has moved quickly since release of the plan: The draft standards for new power plants went to the White House for review just days after Obama announced his plan.

The draft should be available for public comment in September. An earlier version of the draft, released in March 2012 and later withdrawn, set the same emissions limits for coal- and natural gas-fired power plants. The single standard essentially precluded construction of any coal-fired power plants, while imposing no restrictions on new gas-fired power plants.

The new version is expected to specify different emissions limits for coal- and natural gas-fired power plants, suggesting that new gas-fired power plants will face some emission-reduction requirements.

EPA plans to issue its potentially more-contentious standards for emissions from existing power plants next June. The draft emissions standards will be open for public comment for months and may be significantly revised based on public comments sent to EPA.

The climate action plan encourages investments to build and upgrade natural gas pipelines – because they increase American jobs and reduced emissions – and it urges federal-state-industry coordination to improve permitting for pipeline projects. The Bakken Federal Executives Group is cited as a successful collaboration among government (state and federal) and industry for reducing natural gas flaring.

Separately, Sen. John Hoeven (R-N.D.) also cited the Group as a positive step in improving the permitting processes on federal lands.

The plan also calls for a 30 percent increase in funding for federal clean-energy technology such as biofuels, nuclear power and clean coal. Expected reductions in future federal budgets probably preclude this level of expansion.

Scattered throughout the plan are tributes to accomplishments in energy efficiency and emissions reductions during the first Obama administration.

Given the importance of state renewable portfolio standards and oil and gas industry’s expansion of shale gas, we can argue who should take credit. Never-the-less, the increase in renewable energy and the reduction in GHG emissions have been spectacular: In 2012, carbon emissions from the energy sector were the lowest in two decades, and generation of electricity from wind, solar and geothermal more than doubled from 2008 through 2012.

Preparing for the Impacts Of Climate Change

The president’s plan acknowledges that communities, cities and states are leading the effort to protect their infrastructure and residents from sea-level rise and an increase in the number and severity of extreme-weather events, such as droughts.

The plan identifies federal programs that will assist state and local governments to withstand the impacts of climate change. For example, the Department of the Interior’s Bureau of Reclamation is providing grants and technical support to agricultural water users for more water-efficient practices to counteract the impacts of drought.

The plan also recognizes the importance of protecting vital assets from damage in extreme weather events, and is conducting assessments and developing plans for emergencies such as power-plant disruptions from drought-caused shortages of cooling water, and fuel delivery problems during severe storms.

Government agencies would also develop plans to protect their facilities from weather extremes.

Much of the federal effort to mitigate future impacts of climate change was funded by the $50 billion Hurricane Sandy relief bill passed in January.

Stimulating International Efforts

Much of the proposed international effort would expand on existing multilateral and bilateral discussion and cooperation, which are focused on sharing best practices for natural gas production and nuclear power, technology development for clean coal and energy efficiency.

Financial resources also are available to stimulate the use of clean energy technologies. For example, the World Bank, the U.S. Agency for International Development (AID), the U.S. Trade Development Administration (TDA) and the Overseas Private Investment Corporation (OPIC) all support global development. The climate action plan proposes to direct some of these agencies’ funding to clean energy projects.

The plan also proposes global free trade agreements for environmental goods that are similar to the existing Asia-Pacific Economic Cooperation (APEC) agreement. The 21 member-economies in APEC will reduce tariffs to 5 percent or less by 2015 on a negotiated list of 54 environmental goods, such as gas and wind turbines and catalytic converters.

This article has described only a few of the dozens of actions that the president proposes in his climate action plan. This last example would link domestic tax changes and international policy, and help pay for many elements of the plan.

The president calls for the elimination of U.S oil- and gas-industry tax preferences, such as intangible drilling cost expensing.

The International Energy Agency (IEA) has estimated that elimination of fossil fuel subsidies could reduce greenhouse gas emissions by 10 percent, but was referring to the practice of using government subsidies to keep the cost of gasoline and other fuels exceptionally low, not industry taxation.

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Policy Watch

Policy Watch - Edie Allison

Edie Allison is Director of the AAPG Geoscience and Energy Office in Washington, D.C.

Policy Watch

Policy Watch is a monthly column of the EXPLORER written by the director of AAPG's  Geoscience and Energy Office in Washington, D.C. *The first article appeared in February 2006 under the name "Washington Watch" and the column name was changed to "Policy Watch" in January 2013 to broaden the subject matter to a more global view.

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