In terms of the political calculus, GHG regulation faces an uncertain future, at least into 2013. And as a flood of cheap gas erodes the perception of an impending environmental crisis,...
Shale gas makes it easy to be green.
the Clean Air Act. These rules would begin affecting power plants in January 2011, when the EPA’s Tailoring Rule would impose GHG restrictions on projects regulated under EPA’s New Source Review permitting process.
Last summer, the Senate voted 53 to 47 to block a bill sponsored by Sen. Lisa Murkowski (R-Alaska) that would’ve stripped EPA of GHG regulatory authority—including auto-tailpipe standards that automakers already are working to implement for the 2012 model year. Reid opposed Murkowski’s measure, but it’s conceivable he’d support Rockefeller’s more conciliatory bill in the lame-duck session as a way to pre-empt another attempt by Murkowski next year, when the Republican caucus will be six-seats larger in the Senate, and in control of the House.
Of course, the president still holds veto power, and he almost certainly would use it to stop legislation curtailing EPA’s regulatory authority. Nevertheless, the political winds clearly have shifted against GHG legislation, leaving the industry to deal with an uncertain set of new EPA regulations—uncertain because they already face court challenges that seem unlikely to be resolved before the 2012 elections, after which they’ll depend on the favor of whoever occupies the White House.
The point is, political winds are fickle things, destined to shift and shift again, as swing voters throw their weight to the left or the right, in reaction to whatever issues dominate the headlines at voting time. In terms of the political calculus, GHG regulation faces an uncertain future, at least into 2013. And with shale gas entering the mix, climate change is starting to look like a dead issue, at least in terms of federal policymaking.
Hope for Coal
A sweeping legislative framework like federal carbon regulation can’t happen without sustained political will—usually driven by public sentiment, evidence of a crisis, or both.
Public sentiment toward environmental issues ebbs and flows, but climate concerns have never gained strong currency in the United States. Compared with issues like jobs, war or terrorism, global warming seems like an esoteric problem to the average voter. The consequences of inaction are too general to inspire a bona fide movement among the body politic. As a result, public sentiment will never drive carbon regulation to the finish line.
That leaves the perception of crisis as the remaining driver. As the House of Representatives showed when it approved the Waxman-Markey cap-and-trade bill, many legislators perceive a looming crisis, and they believe carbon regulation is the answer to addressing that crisis.
At least they did in 2008.
Since that time, shale gas developments have driven gas prices down to absurdly low levels. This is driving the least-economic coal-fired plants out of the market, producing tangible evidence that technology and market forces will solve the climate problem.
Superficially, this would seem to be bad news for coal—not to mention virtually every other source of energy. But in the longer term, coal companies believe they can hang on and compete effectively, fueling at least those existing power plants that were built or modernized in the last couple of decades. Coal isn’t actually going away; it’s just being usurped