fresh voices from the front lines of change







The Republicans want you to think that President Obama’s climate rules are going to make your utility bills explode.

Unfortunately for Republicans, the utility industry isn’t saying that.

As I noted earlier this week, the main utility industry lobby, the Edison Electric Institute, reacted to the announcement of the new climate regulations with a mostly positive statement:

It is crucial that the baseline from which emission reductions are measured recognizes the significant voluntary actions and investments already taken by states and electric utilities to reduce GHG emissions, transition to a cleaner and enhanced generation fleet, and comply with other environmental regulations. While the 2030 reduction target is ambitious, it appears that utilities may be allowed to take advantage of some of their early actions.

In any final guidelines, it is imperative that EPA provide the states with achievable targets, emission reduction goals, and compliance deadlines. The proposed timeline for states to submit plans to EPA recognizes that ample time is needed to develop and implement new emission reduction programs.

While we are still assessing the overall proposal, EPA appears to have allowed for a range of compliance options to reflect the diversity of approaches that states and electric utilities have undertaken and may undertake to reduce GHG emissions. Flexible compliance is necessary to maintain a diverse portfolio of generating sources. However, there are some concerns about EPA’s broad approach to ‘best system of emissions reductions,’ and we will look at this issue carefully.

We appreciate that EPA today also proposed separate standards for modified and reconstructed units. Units that are obligated to take actions to comply with other environmental regulations need clarity on the future regulatory framework.

The 120-day comment period that EPA is allowing for both of these proposed guidelines and standards reflects the complexity and importance of these rulemakings. We will work with our member companies throughout these rulemaking processes to provide EPA with relevant information, data, and comments about the impact these proposals will have on our industry’s ability to provide reliable and affordable electricity to all customers.

Imagine how different this week would have been if utility companies across the nation were telling local TV networks and newspapers that their bills were going to double because of these rules. That’s not happening.

The other notable reaction in Corporate America is from the natural gas industry, which sees increased profits from the new rules.

The official statement from the American Natural Gas Alliance is a cards-close-to-the-vest non-statement.

But a representative from ANGA told the Casper (Wyoming) Star-Tribune this week, “Our view is, and it is the view of the EPA frankly, that this rule is going to amount to greater use to natural gas.”

The positive impact on natural gas complicates the reaction in coal and oil country, since several states contain abundant amounts of coal and oil as well as gas. The Star-Tribune explained what that means to its Wyoming readers:

Western coal production is expected to fall by over 30 percent in 2020 due to new federal pollution standards proposed for power plants, according to U.S. Environmental Protection Agency projections. The decline is anticipated to be offset in part by a rise in natural gas fired generation, which the EPA estimates may increase as much as 18 to 19 percent by 2030 … Wyoming is the country’s top coal-producing state, supplying more coal than Texas, West Virginia, Kentucky, Pennsylvania, Illinois and Montana combined. But the Cowboy State is also one of the top natural gas-producing states in the country. In 2012, the state ranked fifth nationally in natural gas production.

And as the New York Times noted in December, the profitable oil company in America — actually, the most profitable company in America — Exxon Mobil, is no longer just an oil company, but a natural gas company:

In 2010, Exxon Mobil purchased a company that produces natural gas, which creates less carbon pollution than oil or coal. Exxon Mobil is now the nation’s biggest natural gas producer, meaning that it will stand to profit in a future in which a price is placed on carbon emissions … Internally, Exxon Mobil now plans its financial future with the expectation that eventually carbon pollution will be priced at about $60 a ton…

I suspect the gentle response from these industries is partially thanks to effective business outreach by the White House and the EPA. Without that, utility and natural gas executives might have been more mistrusting, and would be plotting to kill the rules instead of working to shape them.

These dynamics are depriving Republicans of a united corporate front that can coordinate an effective smear campaign. That’s why they’ve been stuck citing the quickly debunked hack work from the U.S. Chamber of Commerce, instead of anything fresh from the industries about to be regulated, and may even explain why they have been so easily distracted by a matter they can’t do anything about: the deal freeing prisoner of war Bowe Bergdahl. As a result, the regulations have not faced intense attacks in their first week.

Perhaps the White House can’t communicate a prisoner exchange, but they’ve navigated the PR rollout of a complicated regulatory package quite nicely.

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