Washington (Platts)--28Feb2013/232 pm EST/1932 GMT

Any Environmental Protection Agency efforts to regulate greenhouse gas emissions from existing power plants will face significant pushback from utilities due to regional differences in renewables capacity, access to natural gas and other market factors, Rod West, executive vice president of Entergy, said Thursday.

"Anything that's supposed to be sustainable is going to have an impact somewhere," West said at the Climate Leadership Conference in Washington. "We can talk altruistically about the greater good, but getting there requires a consequence or sacrifice from other sectors. The country is dealing with the immediacy of economic strife. That's the reality of this fight."

Many observers expect the EPA will soon draft greenhouse gas regulations on existing power plants, particularly after Obama stressed in his February 12 State of the Union address that he would direct federal agencies to take action to battle climate change if Congress does not act.

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In a separate address, EPA Acting Administrator Bob Perciasepe did not outline any such actions EPA might propose. But he noted that EPA is currently finalizing GHG regulations on new power plants, which will cap carbon emissions at 1,000 pounds per megawatt-hour, and he said it would be an opportunity for innovation.

"We believe this is an achievable standard," said Perciasepe, rumored to be on President Barack Obama's short list to be nominated as EPA administrator. "We do expect that this will take advantage of American technology. It will help us all move to a cleaner energy future."

Entergy would like to see a market-based regulatory regime on GHG emissions, a prospect that is unlikely given Congress' partisan divisions, West said. But in the absence of a national consensus on climate change, Entergy is nonetheless making its investment decisions with climate change in mind, as Hurricane Katrina and Superstorm Sandy have demonstrated that the impacts of rising global temperatures are real.

"As businessmen and women, we have to also look at this through the lens of risk management," West said. "You can be agnostic on the science. But purely from a risk management perspective, how can you assess the risk of doing nothing?"

Perciasepe, as several EPA and White House officials have in recent weeks, emphasized that federal environmental regulations can spur investment in advanced technologies, leading to greater market opportunities for industry.

He cited the agency's auto mileage standards as an example of how regulation has driven innovation, to the benefit of industry. Those standards, finalized in 2012, will force cars and light trucks to double their fuel efficiency and achieve 54.5 mpg by 2025.

"It is clear that setting these standards and providing that clarity for the auto industry is paying dividends," Perciasepe said. "As they make their investments, they are doing amazing things. The selection that American consumers have now is astounding."

Americans purchased the most US-made cars last year in five years, he noted. Automakers are "using new materials, new components, cutting edge technologies," Perciasepe said. "All the way down the supply chain we're seeing advances."

William Reilly, a former EPA administrator during the George H.W. Bush administration, said engagement with industry is key, given that so much innovation and technological development happens in the private sector.

As a chairman of Obama's oil spill commission investigating the BP Macondo blowout, he said he was shocked to find that the industry was familiar with BP's safety shortcomings, while regulators were in the dark.

"The regulatory agencies ... can barely keep up with the developments," Reilly told reporters on the sideline of the conference. "I think it's very important that our regulatory agencies be in touch with industry."

Beyond regulations, Perciasepe said EPA has engaged in many industry partnerships and created consumer programs aimed at addressing climate change.

For example, the Energy Star program, which EPA jointly administers with the Department of Energy, is marking its 20th anniversary this year, having certified more than 5 billion products sold. Energy Star is a labeling program that identifies for consumers the most energy efficient products and appliances.

"The approach of building consumer choice into the equation is very powerful," Perciasepe said.

--Herman Wang, herman_wang@platts.com
--Edited by Richard Rubin, richard_rubin@platts.com

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