Business Gains Seen in U.S. Standards for Power Plants

Rules to cut greenhouse-gas emissions from operating U.S. power plants will be a boon for companies willing to invest in clean energy, said Carol Browner, a former Environmental Protection Agency administrator.

“By setting these standards, there will be business opportunities that are created,” Browner said yesterday during an interview with Bloomberg Television’s Peter Cook for “Capitol Gains” airing Feb. 10.

“There will be companies that can develop the new technologies,” she said. “Perhaps we’ll look more to renewables. We’ll look to greater energy efficiency.”

President Barack Obama in his second-term inaugural address said he will respond to threats from climate change, citing drought and more powerful storms, setting up a potential conflict with owners of coal-fired plants including Southern Co. of Atlanta and American Electric Power Co. of Columbus, Ohio.

Browner, a former Obama adviser, said the administration will propose rules to regulate emissions from existing plants in addition to those the EPA is proposing for new facilities.

The Supreme Court ruled the agency had to act, if the emissions were found to “endanger public health and welfare,” Browner said. “EPA made that scientific finding, so now they have to do this.”

Existing Plants

If the EPA imposes the same requirements for existing plants that are being considered for new facilities, “about 25 percent of the gas plants that are running in the country wouldn’t meet that standard,” Thomas Kuhn, president of the Edison Electric Institute, a Washington-based industry group for publicly traded utilities, said during a Feb. 6 interview at Bloomberg’s headquarters in New York.

In response to a question, Browner said it remains to be seen whether the rules will force companies to develop gas- trapping technologies in response.

The Obama administration is considering action on an array of other energy-related issues, including oversight of hydraulic fracturing, or fracking, used to extract gas from shale and possible export of liquefied natural gas over objections of manufacturers such as Dow Chemical Co.

“The game changer is natural gas,” said Browner, who is a member of Bloomberg Government’s advisory board. “The question is what natural gas does both to coal, and ultimately to renewables and efficiency as we go forward.”

Gas Glut

Advances in drilling in shale formations have produced a glut of natural gas. Futures prices for the fuel on the New York Mercantile Exchange have declined about 75 percent since July 2008, leading to investment in natural gas at the expense of other forms of generation including coal and nuclear.

The EPA should regulate hydraulic fracturing, though that is “probably not likely,” said Browner, who led the agency from 1993 to 2001 under President Bill Clinton. If the task is left to the states, as proposed by Republicans such as Representative John Shimkus of Illinois, “we’re going to see a patchwork of requirements, which quite frankly is going to be hard on industry,” she said.

In its first four years, the Obama administration issued loan guarantees for wind- and solar-energy projects and increased fuel-efficiency standards for autos in addition to writing rules for power plants.

“We have a real opportunity to position the U.S. in the global demand for clean-energy technology,” Browner said.

To contact the reporter on this story: Brian Wingfield in Washington at bwingfield3@bloomberg.net

To contact the editor responsible for this story: Jon Morgan at jmorgan97@bloomberg.net

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