REGULATION

EPA chief sees role for coal, vows to protect energy reliability

HOUSTON -- Coal will retain a key role in U.S. energy supplies as U.S. EPA strives to preserve reliability while developing a rule intended to limit carbon emissions from power plants, Administrator Gina McCarthy said yesterday.

"Conventional fuels like coal and natural gas are going to play a critical role in a diverse U.S. energy mix for years to come," McCarthy said here at the annual IHS CERAWeek energy conference. "This rule will not change that. It will recognize that."

McCarthy, speaking to a group of industry leaders and experts, said she wanted to be clear on points such as conventional fuels because of frequent questions she receives. The goal is to cut greenhouse gas reductions without threatening energy reliability or significantly boosting the cost of energy, while supporting growth in jobs and the economy, she said.

A proposal on carbon pollution standards is expected in June, and McCarthy said she's sure "people will be disappointed in many ways" even as she tries to listen to a range of views. Some critics will think EPA didn't go far enough and others will say it went too far, she said. The rule is set to be finalized in 2015.

The administrator said she believes there are technologies that, with continued investment, will let fossil fuels remain part of the mix for generations. McCarthy said an all-of-the-above energy policy is working, with higher oil output while the country exceeded other nations in trimming carbon pollution.

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She said a number of facilities are responding to regulations and doing the best they can, while underpinning the "ability to deliver reliable and cost-effective energy." McCarthy said increased use of wind and solar has played an important role in the United States, and she cited efforts such as efficient appliances.

She said the shift to clean energy is a big part of the effort to combat climate change in the United States and globally, which led President Obama to direct EPA to create carbon pollution standards for power plants.

At the same time, she said, states and cities have led the way on topics such as renewable targets, energy efficiency and reducing carbon pollution.

"States are incubators of innovation. They have been for years," McCarthy said. "At EPA, I have no intention of establishing a federal rule that doesn't rely on the things that states and cities are already doing so that they have the flexibility to shine in any rule that moves forward."

One of the challenges is to not just focus on facilities, but instead look more broadly at the energy system, McCarthy said. She called reliability "job one," while the second job is looking for the most cost-effective ways for reductions. There likely will be changes from a proposal to a final version, she said.

Cheryl LaFleur, acting chairwoman of the Federal Energy Regulatory Commission, said states may set targets and programs over a broad area. That may lead to work in regional markets to make sure state programs go together, she said in an appearance yesterday at the Houston conference.

McCarthy also called for people to work together, citing in part the history of the Clean Air Act, which she said cut air pollution as the economy grew. She mentioned higher fuel efficiency standards, saying that gave a boost to the automobile industry. There is proof, she said, that "we don't have to choose between a healthy environment and a healthy economy."

Significant costs already are being paid from climate change, according to McCarthy, including higher insurance rates, taxes and food prices, as well as lost tourism. She recalled a push by President John F. Kennedy to get America to send explorers to the moon decades ago.

"Climate is not about reaching the moon," she said. "It's about making sure that the planet we now inhabit is livable for us and for generations to come. That is the challenge of this generation."

Twitter: @edward_klump | Email: eklump@eenews.net

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