Obama admin, House Republicans clash over cost of carbon rules

Source: Jean Chemnick, E&E reporter • Posted: Thursday, September 19, 2013

Two members of President Obama’s energy team today defended the administration’s climate change policies before a House Energy and Commerce subpanel that has repeatedly tried to roll back their authorities.

U.S. EPA Administrator Gina McCarthy and Energy Secretary Ernest Moniz used their opening remarks to affirm the science of man-made climate change and to cast their efforts to mitigate CO2 emissions as a boon to the U.S. economy.

“The evidence is overwhelming, the science is clear, and the threat from climate change is real and urgent,” Moniz told the Subcommittee on Energy and Power.

McCarthy promised that EPA’s proposal for future power plant carbon dioxide emissions — expected to be released Friday — would “reflect new information and the extensive public comment” from EPA’s first proposal for new power plants, which was issued last year

McCarthy also said industry is already engaged in outreach with “a broad group of stakeholders” to inform its existing power plant proposal, which is due in June. The agency will provide guidance to states, she said, which have the primary role in developing and implementing standards for existing sources under the Clean Air Act.

But panel Republicans vehemently objected to the forthcoming rules.

“Since 2009, the agency has been busy imposing costly requirements on coal-fired electricity and other fossil fuels while targeting manufacturing with new regulatory burdens, only increasing the economic uncertainty,” subcommittee Chairman Ed Whitfield (R-Ky.) said in his opening remarks.

The upcoming EPA proposal is “almost certain to further the economic uncertainty facing our nation’s utilities and have devastating effects on our communities and, most importantly, the consumers who pay their electricity bills every month,” he added.

McCarthy told the panel that EPA is mindful of the effect its actions have on the economy. “We have to be sensitive to the economic consequences of our actions,” she said.

Committee Republicans asked McCarthy and Moniz to comment on the administration’s attitude toward gas and coal. McCarthy said EPA views abundant domestic supplies of natural gas as a boon to air quality but added that the agency wants to ensure that it is produced responsibly.

Both Moniz and McCarthy said they saw a future for coal use in U.S. power generation. But Rep. John Shimkus (R-Ill.) quizzed McCarthy closely about the effect EPA’s expected carbon capture and storage technology requirement might have on coal-fired generation.

The proposal’s emissions limit is expected to differ little from the 2012 version and to require coal-fired power plants to use CCS. But it is expected to provide a broader justification for why CCS is ready to help coal-fired power plants meet that standard.

The technology is expensive, Shimkus noted, and there are no commercial-scale power plants currently operating in the United States that use it.

“For these new rules to be promulgated, it is a signal that we’re not going to build a new coal-fired power plant until there is at least demonstrated ability of technology,” he said. “And the concern is costs are going to be great.

Shimkus brushed aside Moniz’s comment that a plant with CCS capabilities is currently under construction in Mississippi and questioned whether EPA in the past has promulgated rules that require the use of a technology that is not “commercially available.”

McCarthy pointed to an EPA rule promulgated in the 1990s that required power plants to use scrubbers to address acid rain.

But Shimkus protested that scrubbers were more widely deployed than CCS is now.

“That’s the whole difference between the clean air debate and the greenhouse gas debate,” he said. “In the clean air debate, the technology was available. In the greenhouse gas debate, it’s not available. That was really the No. 1 concern we have.”

McCarthy promised that EPA had paid close attention to CCS’s state of development when crafting its proposal. Her answer left little room for doubt that the proposal would include such a requirement.

“That’s the reason that we’re reproposing,” she said. “We’ll have a full debate about this when the rule goes out.”

But she pointed to four power plants currently in development that plan to incorporate a level of CCS that would “beat” the emissions-reduction requirement laid out in EPA’s 2012 proposal.

In a briefing yesterday with reporters, David Hawkins of the Natural Resources Defense Council’s Climate Center noted that the Clean Air Act does not require EPA to limit its rules to technologies already widely deployed without those rules.

Before the EPA rule requiring power plants to use scrubbers to limit sulfur dioxide, they were only found in areas where state and local regulations required them, he noted.

McCarthy and Moniz were the only two administration officials to accept the Energy and Power Subcommittee’s invitation to testify at today’s hearing, which was also extended to 11 other federal agencies that have a hand in Obama’s Climate Action Plan. But the two Cabinet members between them oversee much of the plan released in June, which besides EPA’s carbon regulatory regime includes support for renewable energy, energy efficiency and carbon-reduction technology.

The president’s climate plan assigns the Energy Department the task of improving energy efficiency through new rules like the one the agency finalized earlier this year for microwaves, Moniz said.

“Right now, we waste enormous amounts of energy,” he said. “That wasted energy is also wasted money.”

The department is also tasked with helping the public sector develop low-carbon technology. There he pointed to DOE’s recent draft solicitation for $8 billion in loan guarantees for low-carbon fossil fuels technologies.

But committee Republicans said the administration’s climate change policies place a particular burden on fossil fuels development at a time when more energy is needed to fuel economic recovery.

Rep. Fred Upton (R-Mich.), who chairs the full committee, charged that by using existing authority to regulate emissions instead of waiting for Congress to pass climate change legislation, the administration is “seeking to regulate what it was unable to legislate no matter what the cost to jobs and the economy.

The way to “address climate risks,” Upton said, is not to regulate emissions but to pursue policies that will increase prosperity.

“There should be no question that the economic wherewithal fostered by America’s energy resurgence will provide a wide avenue for innovation that will answer energy and environmental challenges of the future,” he said.

The committee’s top Democrat, Rep. Henry Waxman (Calif.), faulted Republicans for seeking to block the administration’s climate plan without offering one themselves. He noted that the House voted numerous times in the previous Congress to stop climate-related actions by the agencies, and that House appropriators have already approved amendments to spending bills this year that would limit the administration’s ability to support renewable energy and energy efficiency programs and international negotiations on climate change.

“This Congress has been called a do-nothing Congress, but on climate we are doing worse than nothing, we are affirmatively obstructing progress,” he said.

But it is unclear what practical options the Republicans at the dais have for heading off the president’s climate agenda, which depends on authorities already granted by Congress. Upton introduced legislation in the previous Congress that would have repealed EPA’s authority to regulate greenhouse gases under the Clean Air Act.

The Energy and Commerce chairman had no difficulty shepherding the bill through his committee and the full GOP-controlled House, but companion legislation did not garner the 60 votes needed to clear the Senate.

Whitfield, for his part, has promised to take a slightly different approach this Congress, preparing a bill that would limit EPA’s upcoming rules for CO2 to levels that industry says it can reliably achieve (E&ENews PM, July 23). But its prospects for Senate passage are similarly dim.

Sens. Joe Donnelly (D-Ind.) and Roy Blunt (R-Mo.) have offered an amendment to energy efficiency legislation now before the Senate that would limit EPA’s upcoming rules for a variety of sectors, but it is unclear whether it will receive a floor vote, and it is currently stalled together with the underlying bill (E&ENews PM, Sept. 12).

Republicans in the House have also sought to rein in EPA’s regulatory activities by limiting its budget and loading spending bills with policy riders that would suspend those actions. But as Congress and the administration grapple with how to fund the federal government past the end of this fiscal year, it seems unlikely that any controversial policy riders will be part of a hard-fought budget deal. And Rep. Jim Moran (D-Va.) said yesterday he thought it likely that the government would shut down after Sept. 30 while lawmakers negotiate a deal on the debt limit.