America’s energy outlook this year will be, more than ever before, tied to how the federal government approaches the issue of climate change — and how much leverage the new Congress will have to help or hinder those efforts.
Many of President Obama’s supporters expect real action. Although it’s unlikely that a federal carbon tax or a revived “cap-and-trade” pollution-control system could be implemented — House Republicans will have none of it — the administration and its environmentalist allies still have cards to play. Congress will have some say in what happens to American fossil-fuel production, subsidies for wind and solar power and other key energy matters, but most of the important decisions will be made in the White House.
Chief among those is whether to approve the Keystone XL pipeline, a massive Canada-to-Texas project that backers say could transform North American energy markets but one that many environmentalists see as a major concession in the larger fight to reduce carbon emissions.
That is a fight that many expect Mr. Obama to embrace in his second term.
“We’re confident that he’s going to tackle it. He’s had a very good start,” said Josh Saks, legislative director for the National Wildlife Federation’s advocacy center, citing the administration’s drive to improve auto fuel standards and other steps taken in the name of fighting climate change in his first term.
“The carbon [issue] is the big enchilada for us right now. We’re going to make sure that the president pays attention to this,” Mr. Saks said.
Although the Keystone project may be the highest-profile energy fight this year, the administration is poised to ratchet up its regulatory agenda in other areas, though it first must fill a key vacancy on its policy team.
A new EPA head
Mr. Obama has not nominated a permanent replacement for Environmental Protection Agency Administrator Lisa P. Jackson, who recently announced that she would be stepping down after the president’s State of the Union address this month.
She has led what many on the left consider a successful four-year term, but also has encountered several major embarrassments, including an ongoing investigation in her use of secret email accounts.
Whoever takes over the agency, one thing is certain: The EPA will move ahead this year with a litany of rules, including a tightening of the ozone standard, that critics contend will hold back the energy and power generation sectors of the economy and ultimately may cost tens of thousands of jobs.
The EPA last month released the final version of its controversial boiler “maximum achievable control technology” standard, better known as the Boiler MACT rule. It will greatly limit emissions from industrial boilers, heaters and similar sources.
“I don’t think you’re going to see a slowdown of regulations. Right now, the EPA is geared up to get them out the door,” said Ken von Schaumburg, a D.C. lawyer who served as deputy general counsel at the EPA during the George W. Bush administration. “The agenda is set. It’s just a matter of how stringent the rules are going to be when they come out.”
Another item at the top of the EPA hit list is greenhouse- gas emissions, viewed as a main contributor to climate change. The Obama administration has imposed a ban on new coal-fired plants, but likely will pursue equally onerous restrictions on existing plants.
Congressional Republicans fear the greenhouse gas limits eventually will cause great harm to broad swaths of the economy, including consumers, employers and homeowners who rely on power plants.