Consumer Energy Alliance

July 2, 2013

At Georgetown University, President Barack Obama laid out a sweeping new climate change plan. Here’s what you should know:

The Administration plans to bypass Congress, opting instead for executive action. According to National Journal, the word “Congress” isn’t used once in the 21-page report.

EPA will “expeditiously” move forward with regulations to limit carbon emissions from both new and existing power plants. The rules for existing plants are to be proposed by June 2014, and finalized by June 2015.

Permits for renewable energy projects on public lands will be fast-tracked, including those on federally-owned, low-income housing sites.

Efficiency standards on both appliances and federal buildings will be increased.

Through the Energy Department, up to $8 billion in loan guarantees will be made available for advanced fossil-fuel, and other energy efficiency projects, including carbon capture.

Working with other agencies, EPA will develop a plan to reduce methane emissions, which will have a major effect on natural gas development.

This plan will seek to end U.S. government support for the public financing of new coal plants overseas in the poorest countries unless “clean coal” technology is being used.

The President would only approve the Keystone XL Pipeline if it “does not significantly exacerbate the problem of carbon pollution.”

What Now? Three Questions for the President on his Climate Plan

1. What about consumer electricity costs?

As Slate points out, any tough regulations will “at least temporarily increase electricity prices - a move that will have a much harsher impact on the poor, the Southeast, and the Midwest than on prosperous people on the low-carbon West Coast.” What will Obama and his EPA do to protect against this?

2. What about Keystone XL?

It would seem that the President gave a tacit approval of the Keystone XL pipeline. The U.S. State Department’s Draft Supplemental Environmental Impact Statement, finds that, “approval or denial of the proposed Project is unlikely to have a substantial impact on the rate of development in the oil sands, or on the amount of heavy crude oil refined in the Gulf Coast Area.”

It would seem the final determination will rest on the President’s use of the phrase “significantly exacerbate.” While the phrase if very ambiguous, CEA’s analysis of the relevant environmental impact statements shows the project will not significantly contribute to U.S. carbon emissions.

During the construction period, GHG emissions from these sources and activities would be approximately 240,423 metric tons of CO2e. Emissions during the operation of the proposed project would be approximately 3.19 million metric tons of CO2e per year.” [ES-15]

Projections for 2012 U.S. carbon emissions were projected at around 5.2 billion metric tons, which is the lowest level in 20 years.

Once constructed, the annual CO2e from the operation of Keystone XL will account for 0.0613% of U.S. carbon emissions if the United States maintains its emissions at 2012 levels.

What is the President’s definition of “significantly exacerbate?” Will he call for additional studies of the GHG emissions associated with the project? Will the administration rely on the already-completed GHG analysis of the project?

3. Does the President agree with the need for a “war on coal?”

Leading up to today’s speech, Daniel P. Schrag - a White House climate advisor and Director of Harvard University’s Center for the Environment - told the NY Times the following:

Everybody is waiting for action…The one thing the president really needs to do now is to begin the process of shutting down the conventional coal plants. Politically, the White House is hesitant to say they’re having a war on coal. On the other hand, a war on coal is exactly what’s needed.

While the President’s proposal includes $8 billion in loan guarantees for fossil-fuel projects like carbon capture and sequestration, what will the President do to convince consumers across the Southeast that his administration is not waging a “war on coal” that will inevitably drive up the cost of electricity?

Will his administration seek input from the states and important stakeholders, such as farmers and manufacturers, whose ability to help build a better future is intricately tied to the cost of energy being low? Will the President aim to incentivize the use and development of new technologies so we can fully utilize American coal, or is this proposal one of hostility to the industry?

(Editor’s note: Consumer Energy Alliance (CEA), an organization that advocates for energy consumers.)