June 25 (Bloomberg) -- The Obama administration plans to solicit ideas from states on how to cut greenhouse-gas emissions as it seeks to impose standards for carbon dioxide on new and existing electric-power plants, according to people briefed on the plans.
President Barack Obama is set to deliver an address on climate change today, which will probably include measures to curb carbon-dioxide emissions from power plants, the largest source of emissions in the U.S. The administration is also considering delaying a rule for new plants as it begins to figure out how to regulate existing plants, according to people briefed on the matter who asked not to be identified so they could discuss the plans before they are unveiled.
U.S. emissions from energy last year fell to the lowest level in almost two decades, according to the U.S. Energy Information Administration, as cheap natural gas prompted utilities to shift generation from coal to gas. Those emissions are forecast to bounce back and increase by more than 3 percent this year, as the use of coal-fired power plants increases with rising natural-gas prices.
Restrictions on carbon emissions may be fought by coal producers including Peabody Energy Corp. in St. Louis because the rules probably would force utilities to switch to cleaner sources of power, including natural gas and wind. Coal users including American Electric Power Co., based in Columbus, Ohio, and Southern Co. in Atlanta have argued regulations limiting coal use could raise consumer energy costs.
“We do have concerns that limits on existing plants could strand billions that the industry is investing to add additional environmental control” to plants, Melissa McHenry director of external communications for American Electric, said in an e-mail.
“Any additional U.S. emissions reductions should be carefully considered and targeted to allow swift adaptation throughout the world” so it doesn’t endanger the U.S. economic recovery, she said.
The president also will call for more solar and wind projects on public lands and tighter standards for energy-efficient appliances, Sierra Club Executive Director Michael Brune said.
“We’re expecting the president to personally own this, and make it a priority of his administration,” Brune said in an interview.
Obama announced June 22 that he would unveil a package of initiatives to combat climate change in a speech set for today at Georgetown University, an announcement that cheered some environmentalists, including Brune, who have been somewhat disappointed by his record on the issue so far.
The president didn’t offer details of his plan, which marks an attempt to fulfill the promise made at the start of his second term to tackle the pollution blamed for global warming.
Obama’s Environmental Protection Agency signed a legal agreement in 2010 to tackle emissions from new and existing sources, and missed legal deadlines to do so. The EPA issued a proposal for new sources last year, a plan that would preclude the construction of coal plants without expensive carbon-capture technology.
With industry groups questioning the legality of that proposal, the EPA is planning to issue some type of supplemental data and analysis, which would require delay as it gathers further public comment, according to a person briefed on the plan. A White House spokesman declined to comment on the subject in advance of the address.
On the rule for existing plants, the EPA is going to first solicit input from states about what they are doing to limit emissions, and what more they could do, according to a person briefed by agency officials.
“That would be brilliant,” William Bumpers, head of the climate-change group at the law firm Baker Botts, said in an interview. “If you give the states flexibility, you will get lots of creativity.”
Power plants account for about 40 percent of U.S. emissions, and groups such as the Natural Resources Defense Council say that EPA can use flexibility in the law to encourage renewable energy, efficiency gains and the replacement of coal generation with natural gas to achieve steep cuts.
“You can get meaningful carbon-dioxide reductions for pretty moderate costs,” Conrad Schneider, advocacy director for the Clean Air Task Force, said in an interview. “Whatever happens, the EPA is going to be very solicitous to what the states want to do.”
Fred Krupp, president of the Environmental Defense Fund, said “Coal’s future in the United States will depend on the coal industry’s willingness to control the pollution from burning it.”
Obama, he said, has “the opportunity to modernize our energy system.”
Obama isn’t likely to discuss the proposed Canada-U.S. Keystone XL pipeline, Krupp said, because a decision on that project isn’t expected until the fall.
“It’s important for the government to stay neutral and not pick winners and losers,” Jack Gerard, president of the American Petroleum Institute, the oil-and-gas industry’s trade group in Washington, said yesterday at an event sponsored by Public Citizen. “Whatever course he chooses, it will be built on significant decrease in greenhouse-gas emissions.”
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