- Oil & Gas Journal: Federal power plant plan shows disregard for gas, industry groups say
- National Journal: Obama Climate Plan Revives Talk of a Carbon Tax
POLITICO Morning Energy for 8/4/2015
By NICK JULIANO, with help from Alex Guillen, Darren Goode, Andrew Restuccia and Darius Dixon
‘JOB-KILLING’ DEMOCRATS VS. ‘BACKWARD’ REPUBLICANS: That’s how the contenders are likely to frame the fight over the Clean Power Plan on the 2016 campaign trail. President Obama’s marquee White House rollout of the rule — which came a week after Hillary Clinton floated the first outlines of her climate plan — further elevates climate change as a wedge issue in next year’s election. And both sides see is as a potentially winning issue. Democrats will frame climate change as a binary question — either you believe it’s a problem that should be addressed, as Obama and Clinton do, or you don’t. Republicans will emphasize that the rule would increase electricity rates and argue it would harm low-income consumers.
For one example, see Clinton’s remarks over the weekend, when she praised the climate rule while vowing to defend it from “Republican doubters and defeatists.” Or the Republican National Committee attacking the Democratic frontrunner yesterday for supporting “yet another job-killing Obama policy.”
Approaching climate change is not as simple as it may appear for Republicans. Some GOP advisers acknowledge privately that the GOP is vulnerable to attacks on climate science. And while more hardline GOP candidates outright deny that the planet is warming, others like Rubio and fellow Floridian Jeb Bush have taken more nuanced stances. Rubio has danced around the question of whether humans are a cause of climate change, while Bush has openly acknowledged that human activities play a role. POLITICO’S Andrew Restuccia and Darren Goode have the story: http://politi.co/1IVBUQk
GAS INDUSTRY TO OBAMA: I THOUGHT WE WERE FRIENDS: Sorry, natural gas, you’re no longer the new hotness in EPA’s eyes: wind, solar and efficiency are. The final power plant rule throttles back on promoting natural gas in favor of a new incentive program meant to promote renewables and reduced demand. The industry says it’s not pleased with the shift compared to Obama’s earlier endorsement of natural gas as a bridge to the low-carbon future, but officials say they’re still combing through the details. “We were disappointed with the message the White House took this weekend, which was in a sense running away from natural gas,” said Frank Macchiarola, executive vice president at America’s Natural Gas Alliance. “Whether or not that rhetoric turns into reality within the rulemaking is still to be determined.” Elana Schor has more for Pros: http://politico.pro/1IfIeP8
“FINALLY, SOMETHING TO READ AT THE BEACH!”: ME assumes that’s the reaction from the more detail-oriented — or masochistic, depending on your perspective — lawyers and policy wonks in our midst. The Clean Power Plan rule for existing plants clocks in at 1,560 pages [http://1.usa.gov/1If7nt2], with another 343 pages of regulatory analysis [http://1.usa.gov/1MHQsm4]. The new modified and reconstructed plant rule comes in at 768 pages [http://1.usa.gov/1hgvmzh], with a 163-page regulatory analysis [http://1.usa.gov/1UjwY9T]. And EPA’s model federal implementation plan clocks in at 755 pages [http://1.usa.gov/1K1ctHz]. Add in fact sheets covering every state and additional material and you can keep yourself busy well past Labor Day.
SO, WHAT’S IN THERE? Even ME had trouble keeping up with all the breaking news alerts, whiteboards and stories flying to Pros yesterday afternoon and evening. Many of the top-line details had leaked out in advance, including the delay in the initial compliance date to 2022 and the increase in overall targeted cuts to 32 percent below 2005 levels. But ME’s colleagues spent the day poring through the details and will continue to do so for the foreseeable future. (What else is there to do in the middle of August?) Here’s a sample of what we’ve found so far.
— A relaxed requirement for new coal plants: Following complaints over the proposed rule’s requirement for CCS on new coal plants, EPA increased the acceptable emissions rate in the final rule to 1,400 pounds of carbon dioxide per megawatt-hour, up from 1,110 lbs./MWh in the proposal. That, EPA says, will require anyone who wants to build a new coal plant to use “highly efficient supercritical pulverized coal” and to capture 20 percent of their CO2 emissions.
— Northeast states, California already on track: The nine states participating in the northeast Regional Greenhouse Gas Initiative as well as California — many of whom, you’ll recall, were plaintiffs in the landmark 2007 Massachusetts v. EPA case that started EPA down this path in the first place — are among those already well positioned to hit their targets, EPA says. The targets in RGGI and California’s trading program “have goals that are consistent with, or more stringent than, the participating states’ Clean Power Plan goals in 2030, making these states potentially better positioned to meet their goals,” EPA said in a fact sheet.
— EPA dismisses concern rule would require ‘redesign of the energy sector’: “It is certainly reasonable to expect that compliance with these air pollution controls will have costs, and those costs will affect the electricity sector by discouraging generation of fossil fuel-fired electricity and encouraging less costly alternative means of generating electricity or reducing demand,” reads EPA’s final rule. “But for affected [power plants], air pollution controls necessarily entail costs that affect the electricity sector and, in fact, the entire nation.”
— No targets for Alaska and Hawaii — for now: “I wouldn’t use the word ‘exempt,’ I would use the word ‘defer,’” acting air chief Janet McCabe said of the absence of targets for those two states. She says the agency is still evaluating how to set targets for the non-contiguous states but did not offer a schedule for establishing them.
— North Dakota sees biggest goal increase: North Dakota’s 2030 target more than quadrupled under the new rule, going from a 10.6 percent reduction from 2012 levels to a 44.9 percent reduction in the final rule, according to an analysis by POLITICO’S Alex Guillen.
— Nuclear shift benefits for SC, GA: EPA’s decision to not include nuclear reactors that are under construction in its state emissions as part of the goal-setting calculation trimmed South Carolina’s emissions rate goal from 51 percent to 36 percent, while Georgia’s was reduced from 44 percent to 34 percent.
— FERC, DOE and EPA will meet at least four times a year to ensure the EPA’s climate rule won’t upend the nation’s power grid, according to a memo released outlining the approach: [http://1.usa.gov/1MIME55]
— Fishy footnote: The Agenda’s Mike Grunwald pointed this out [http://bit.ly/1hh4SxR] as he was live-Tweeting his reading of the rule last night. A footnote seems to indicate that states may have two more years than EPA previously said to comply. “It should also be noted that in fact, most states could allow their sources to remain uncontrolled for 2022 and 2023, and require controls beginning in 2024, and still be able to meet their interim goal,” it reads.
— Carbon taxes coming? The rule also now explicitly authorizes states to consider “a fee for CO2 emissions” (a.k.a. a carbon tax) in their plans to reduce emissions. (A tip of ME’s cap to National Journal’s Ben Geman for noticing that nugget on page 899 of the 1,560-page rule: http://bit.ly/1SXx0lg)
— Thanks for reading: POLITICO alum Erica Martinson was rewarded for years of covering EPA with a name-check in the final rule. A section explaining that the Regional Greenhouse Gas states likely won’t need extra time to submit compliance plans includes a link to a May POLITICO story (http://politi.co/1jtqPCU) on some states potentially joining RGGI to comply with the rule. It’s on page 629: http://1.usa.gov/1If7nt2
** A message from Green for All: The Clean Power Plan lets us all breathe easier. It cuts carbon pollution from power plants by 40 percent and is the greatest action the U.S. has ever taken in the fight against climate change. Learn more here: http://bit.ly/1SoO34t **
SO WE’RE JUST PLOWING RIGHT THROUGH NAP TIME TODAY, HUH? Hi there, I’m your bleary-eyed host Nick Juliano, back at the helm of today’s all-hands-on-deck edition. ME and the rest of the energy team have been sacrificing sleep, working through our vacations and skipping birthdays to bring you all the latest on the Clean Power Plan. We’re looking forward to August reclaiming its traditional place as a slow news month, but we fear that it’ll be impossible to truly relax until the president finally gets around to that little pipeline everyone has been asking him about since forever. Andrew Restuccia is retaking the reins, so send him your news, tips and commentary — notice I didn’t say “predictable reactions to the CPP” — at arestuccia@politico.com. And follow us on Twitter @nickjuliano, @AndrewRestuccia @Morning_Energy and @POLITICOPro.
REPUBLICANS NOT ITCHING FOR A SHUTDOWN: Following recent tradition, we’re nearly to August recess without a single spending bill passed, and lawmakers won’t be back until after Labor Day with just a few weeks to keep the government open past Oct. 1. Among the points of dispute between the Republicans who control Congress and the Democratic president who signs appropriations bills into law are GOP policy riders that would block implementation of the Clean Power Plan. But at this point, Republican’s don’t seem interested in any climate brinksmanship.
“We have promised we’re not going to default on the debt, we’re not going to shut down the government,” Sen. John Barrasso said yesterday.
TIT FOR TAT?: Sen. Lisa Murkowski scored a big win when Alaska wasn’t included in the state-by-state requirements under the Clean Power Plan. But that doesn’t mean the Alaska Republican will return the favor and protect the agency from GOP attempts to trump the rules. “Well I really haven’t given much thought to that in all honesty,” she told reporters Monday. “I was so focused on being able to breathe again from an Alaska perspective.”
REAX ROUNDUP: ME is still relatively new over here at POLITICO, which means being on fewer press lists than in an earlier life on this beat, but we still had to sprint to keep from being crushed by all the reactions to yesterday’s big climate announcement. Here’s a (by no means comprehensive) roundup of a few highlights:
— Democratic Sen. Heidi Heitkamp had one of the harshest reactions to the rule, calling it a “slap in the face” to North Dakota after her state was hit with a much tougher target. “The Administration claims to support an all-of-the-above energy strategy, but has provided no viable path forward for coal and now seems to be going after natural gas as well,” Heitkamp said in a statement.
— An EPA official described the mood inside HQ ahead of Monday’s announcement as “a mixture of celebration, stress, joy and relief.” ME hopes they all got to enjoy a cocktail or two last night to celebrate the launch.
— Former Rep. Bob Inglis, a Republican who lost his South Carolina seat and has since been crusading for Republicans to do something about climate change as executive director of republicEn.org: “We can do better. Whole economy, not sector-by-sector. A price signal, not regulations. A smaller government, not a bigger one. Free enterprise, not command-and-control. The country and the world have been waiting for conservatives to step forward with the better solution. Now’s the time.”
— New York Attorney General Eric T. Schneiderman and other blue-state AGs sent a letter of support yesterday. “We are in the process of reviewing the rules, but fully anticipate standing with EPA to defend these necessary emission standards if they are challenged in court,” wrote Schneiderman and the attorneys general from California, New Mexico, Massachusetts, Oregon, Connecticut, Maine, Vermont, Washington State and the District of Columbia.
— NEI ‘disappointed’ that climate rule won’t count existing plants: “We are disappointed … that the ‘best system of emission reduction’ in the final rule does not incorporate the carbon-abatement value of existing nuclear power plants — the largest source of carbon-free electricity,” Nuclear Energy Institute chief Marv Fertel said in a statement. “This is surprising since EPA clearly recognized in the proposed rule that some of these plants are at risk of premature shutdown.”
— Energy Secretary Ernest Moniz said the Clean Power Plan and other administration efforts to address climate change “demonstrate that no challenge is too great when America’s technological know-how and optimism are put to the test,” while touting DOE’s work on the Quadrennial Energy Review.
WITHER THE WAR ON COAL? One theme in yesterday’s reactions was a relative lack of statements accusing President Obama of waging a “war on coal.” Senate Majority Leader Mitch McConnell’s office used the phrase, which remains popular in coal-dependent Appalachia. But Montana Sen. Steve Daines, whose home state is among the top 10 coal producers, and North Carolina Rep. Richard Hudson released statements accusing the president of waging a “war on American energy,” a phrase he’s used before. The Republican National Committee went with a “war on wages.”
— ME can think of a few possible explanations for the shift. 1.) Who wants to keep going to bat for the stuff Santa leaves in your stocking? 2.) The “war on wages” theme better fits Republicans efforts to frame climate change in economic — rather than environmental — terms. 3.) Highlighting “American energy” allows them to champion the U.S. oil and gas boom. 4.) The American frame also provides an opening to attack Democratic frontrunner Hillary Clinton’s energy proposals on the grounds that they would mainly incentivize production of new solar panels, much of which happens in China.
HAPPY BIRTHDAY, MR. PRESIDENT: The president turns 54 today. Here’s to hoping he has a more relaxing birthday than ME’s, which was yesterday.
QUICK HITS:
— Opponents started plotting to kill the EPA climate rule before it was even proposed. The New York Times: http://nyti.ms/1ePdbim
— California regulators are asking the state attorney general to consider fining Plains All American Pipeline over its ruptured pipeline that spilled oil near Santa Barbara last May. Reuters: http://reut.rs/1N5Z43X
— Climate activists trick Scott Walker into posing with a novelty check “signed” by the Koch brothers. Huffington Post: http://huff.to/1E5pKNn
— A Washington Post editorial endorses an end to the crude export ban and says it could be tied with additional renewable energy tax credits to gain Democratic support: http://wapo.st/1IfQTkv
— Russia is exporting more gas as European buyers capitalize on a fall in prices. Reuters: http://reut.rs/1IfR6Es
** A message from Green for All: Climate change is undeniable. It has severe ramifications on our public health, national security and economy. Carbon pollution is one of the largest contributing factors to climate change, and power plants emit 40 percent of all carbon pollution in the U.S. The Clean Power Plan is an undeniable solution to this undeniable problem. Learn more here: http://bit.ly/1SoO34t **
Tags: energy, fuel, gas, oil