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New arena at Will Rogers takes shape


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EPA: Texas should cut emissions by 39 percent

Obama seeks power-plant emissions cuts Republicans oppose
By Jim Snyder and Mark Drajem
WASHINGTON — President Barack Obama is proposing cuts in greenhouse-gas emissions from the nation's power plants by an average of 30 percent from 2005 levels, a central part of his plan to fight climate change that also carries political risk.

The proposal, issued Monday by the Environmental Protection Agency, represents the boldest single step the United States has taken to fight global warming, with the administration saying the effort would both boost the economy and cut health woes such as asthma and heart attacks. The effort drew immediate pledges from Republicans to try to block the rule, as they warned it would cost jobs and raise electricity prices.

The EPA is setting standards for each state based on the carbon emitted from their coal and gas-fired power plants in 2005, and it will now be up to state officials to come up with how they want to meet the targets. Because emissions from power plants fell about 15 percent from 2005 to last year, the preferred reduction equates to less than a 20 percent cut from current levels. The EPA said it would lead to $90 billion in climate and health benefits, and cost utilities up to $8.8 billion.

The administration is arguing that the plan would both have meaningful health benefits, because it would lead to less soot and smog as old coal plants shutter, and will lower customers' electricity bills, as they use less power.

In a call with Democratic lawmakers Sunday, Obama dismissed complaints that the rule will hurt the economy by driving up electricity prices, and told the Democrats listening: "Please go on offense" to promote the health impacts of the measure, said two people listening in on the call, including Rep. Gerry Connolly, D-Va.

Coal producers and Republicans in Congress offered their own pre-emptive attack, going after the plan even before it was issued.

"The White House scheme will raise costs and destroy American jobs," said Michael Steel, spokesman for House Speaker John Boehner, an Ohio Republican.

The proposed regulation will permit states to achieve the reductions in climate-warming pollutants by promoting renewable energy, encouraging greater use of natural gas, embracing energy efficiency technologies or joining carbon trading markets. The regulations will apply to existing power producers. Separate regulations governing new plants have already been proposed.

The 30 percent reduction represents an average. Individual states may be directed to cut carbon emissions at levels that are greater or less than that figure.

Emissions from power plants were already down 15 percent from 2005 through 2012, halfway to the goal, according to Vicki Arroyo, executive director of the Georgetown Climate Center. The group compiled a list of reductions by state, which showed that many states, including New York, Washington, Virginia and Georgia, have already exceeded cuts of 30 percent.

The plan will also give Obama evidence of America leading by example as he tries to persuade other nations to cut their carbon emissions. Obama pledged five years ago as part of international climate talks that the U.S. would cut its greenhouse gas emissions by 17 percent from 2005 levels by 2020.

"The decision by President Obama to launch plans to more tightly regulate emissions from power plants will send a good signal to nations everywhere that one of the world's biggest emitters is taking the future of the planet and its people seriously," Christiana Figueres, the United Nations' top climate official, said in a statement Monday.

Legislation to require economy-wide cuts to emissions through a cap-and-trade system died in the Senate in 2010 under mounting opposition from Republicans and some industrial state Democrats who worried it would raise the costs of electricity. The proposal today is less sweeping, though still historic. Power plants are the source for about 40 percent of the total U.S. carbon emissions, which most scientists say are contributing to rising global temperatures.

The 560 plants that burn coal to make electricity account for about 75 percent of all power-plant emissions. Coal, the most carbon-intensive fossil fuel, provided 39 percent of the U.S. power in 2013, according to Energy Department data. While that's down from about half, coal is remains the single largest source of electricity generation in the U.S.

The EPA estimated coal will provide 30 percent of U.S. electricity when the cuts are in full effect by 2030.

The proposed rules are among policies "designed to drive out low-cost electricity and replace it with higher-cost, more expensive and less reliable electricity," Hal Quinn, chief executive officer of the National Mining Association, said Sunday on ABC's "This Week" program.

The EPA is counting on coal plants being operated more efficiently and states shifting to natural gas from coal to get modest cuts in the next four or five years, people familiar with it said. Each state will have a target based on its emissions, and in the next decade the overall electric grid will need to become more efficient and use renewable generation to achieve the reductions, they said.

"President Obama is right to take decisive action to combat this clear and present danger," Frances Beinecke, president of the Natural Resources Defense Council, said by email. "The proposed standards will limit — for the first time in U.S. history — the unrestricted pollution of our atmosphere by carbon dioxide."

Some industry observers have said the approach favored by the administration will leave the rule open to legal challenges under the Clean Air Act because it relies on an interpretation of the law that counts emissions reductions that occur outside power plants — through such things as efficiency measures, greater use of renewable energy and even joining carbon-trading programs. Past regulations have sought to cut pollutants as measured at the smokestack.

Republicans have signaled they intend to make the rule an issue in the House and in campaigns in states where the coal industry is a major employer.

"It is clear that this administration is pushing regulations that are full of costs and no benefits, ultimately bankrupting the American people," said Representative Ed Whitfield, a Kentucky Republican who chairs a House subcommittee on energy and power. "I will continue to fight for Americans to have affordable energy in the current trying economic climate.

The House Republicans' campaign arm immediately targeted more than 30 vulnerable Democrats on the rule. ''Now, Annie Kuster will have to decide between saving the economy and jobs or supporting the President's liberal cap-and-trade scheme for political gain,'' read one missive targeting Kuster, a freshman New Hampshire Democrat.

Most Democrats are supportive of the administration's proposal, including Democratic leaders and the top Democrats on environmental panels.

''Thank goodness the president refuses to be bullied by those who have their heads in the sand, and whose obstruction is leading us off the climate change cliff,'' Senate Environment and Public Works Committee Chairman Barbara Boxer said in a statement. ''The president's proposal is respectful of the states' roles and allows major flexibility, while ensuring that big polluters reduce their dangerous contributions to climate change."

Senate Minority Leader Mitch McConnell, a Republican, said in an email that he would soon introduce legislation in the Senate to block the rules from taking effect.

— With assistance from Mike Dorning, Derek Wallbank and Kathleen Hunter in Washington.

Mark Drajem and Margaret Newkirk
(c) 2014, Bloomberg News.
WASHINGTON — Republican Gov. Rick Perry won't like it, but Texas, along with several other coal-reliant states, faces the biggest task in complying with new carbon emissions standards proposed by the Obama administration.

The nation's top emitter of greenhouse gases, Texas would account for more than a quarter of the total cuts in greenhouse gases that would be required, according to data compiled by Bloomberg Government. Other states facing steep cuts are Louisiana, Florida, Pennsylvania and Arizona.

The plan "is the most direct assault yet on the energy providers that employ thousands of Americans, and fuel both our homes and our nation's economic growth," Perry said in a statement. "These rules will only further stifle our economy's sluggish recovery and increase energy costs for American families."

The boldest single effort by the United States to tackle climate change, announced Monday by the Environmental Protection Agency, would create a series of state-by-state targets for 2030 that would average 17 percent from current levels. Once achieved, they would mean the country had cut emissions from power plants 30 percent from 2005 levels.

The proposal set off a flurry of responses from states. Some heavy polluters, such as Louisiana, vowed to fight the rules. Others, such as Washington State, which EPA data show has the biggest percentage cut to make to meet the 2030 target, were more supportive.

"We have an obligation to protect our state, our economy and our environment for our children and for future generations," Washington Gov. Jay Inslee said in a statement.

Though the state must cut its emissions by 72 percent to meet the EPA's preferred target, it has already taken steps to comply. Inslee signed an executive order in April committing the state to "eventually eliminate" the use of coal, according to a statement.

Washington cut carbon emissions from its electricity production 54 percent from 2005 through 2012, according to Bloomberg Government data.

In fact, a number of states have already made progress on the goals. Nationwide, emissions from power plants fell about 15 percent from 2005 to last year.

By reducing both the risks of climate change, and the pollution associated with coal-fired power plants, the administration said that the plan would lead to $90 billion in climate and health benefits. It would cost utilities and other companies up to $8.8 billion.

Because overall electricity use would fall, the plan will lower customers' electricity bills, as well, it argues.

What EPA has put forward is "a sensible, state-based plan" President Barack Obama said today in a conference call with health groups.

Critics aren't convinced, and warned that the effort would stifle the economy and send electricity rates skyrocketing.

The 560 plants that burn coal to make electricity account for about 75 percent of all power-plant emissions. Coal, the most carbon-intensive fossil fuel, provided 39 percent of the U.S. power in 2013, according to Energy Department data. While that's down from about half, coal is remains the single largest source of electricity generation in the U.S.

Texas has the nation's second-largest economy and the second-largest population after California, and so it's large reductions aren't a complete surprise. Still, its prominence highlights the fact that Obama will be reliant on recalcitrant Republican-led states to achieve the goals he highlighted Monday.

"These rules will effectively double the cost of electricity nationally," Eric Skrmetta, chairman of Louisiana's public service commission, which regulates electric rates in the state.

The states that face the steepest percentage reductions are a hodge-podge, ranging from Washington to Arizona, South Carolina to New Jersey. Some states, such as New York, have already taken action to reduce greenhouse gases, and so may now need to redouble efforts.

The EPA said its reductions aren't calculated off a baseline, and instead were developed based on its calculation of what states can do in four areas: tune-up coal plants, run gas plants more often in place of coal, boost renewable fuels or pursue energy efficiency to reduce overall demand.

Once those standards are set, a year from now, the individual states will then face the task of coming up with their plans for how to make those cuts. They can do so by mixing and matching policies outlined by the agency.

Emissions from power plants were already down 15 percent from 2005 through 2012, halfway to the goal, according to Vicki Arroyo, executive director of the Georgetown Climate Center. The group compiled a list of reductions by state, which showed that many, including New York, Washington, Virginia and Georgia, have already exceeded cuts of 30 percent.

Still, past improvement doesn't mean less is expected of those states today. One state needing to cut more than 40 percent is Georgia.

"I have a real problem with them pretending it's not going to have an effect on electric rates," said Chuck Eaton, the Republican chairman of the Georgia Public Service Commission. "They make the rules and I'm the one having to hand Georgians the bill."

While the overall cut in Texas is steep, booming natural- gas production in the state and large increases in wind energy mean coal's place in the economy is already slipping. Energy Future Holdings Corp., the largest power generator in Texas, filed for bankruptcy on April 29 after a collapse in gas prices cut into revenue at the company's coal-fired and nuclear power plants. Owners KKR & Co., TPG Capital and Goldman Sachs Capital Partners took the former TXU Corp. private in the largest leveraged buyout ever seven years ago.

Texas is the nation's top wind-power producer.

Making steep reductions would mean shuttering only a few of the state's largest, dirtiest coal plants, said Al Armendariz, the former top EPA official in Texas and now a regional official with the Sierra Club.

"Luckily, we have more renewable resources than anyone else," Armendariz said in an interview. "We just need to do what Texans know how to do: roll up our sleeves and get to work."

— Newkirk reported from Atlanta. With assistance from Roger Runningen in Washington

 


 

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