Recently in Climate change Category

The matter of carbon allowances for the power industry appears to be a tough problem. The Edison Electric Institute's split-the-baby solution, which congressman mostly accepted in the Waxman-Markey cllimate change bill, has come under enormous challenge from coal-intensive utilities and their US senators.

EEI's compromise solution, giving coal-heavy companies not enough to cover all their emissions while giving non-emitting utilities a goodly share, is unfair, the coal utilities say. And with 14 senators vowing to support their position, the EEI allocation formula looks to be on the skids.

But Exelon's John Rowe doesn't think so.

Have no fear, natural gas is here, and with it are "tremendous opportunities to reduce carbon emissions by putting natural gas to more use in the electric sector," Skip Horvath, president and CEO, Natural Gas Supply Association, insisted Monday.

Horvath's assertion was prompted by a question posed in National Journal's blog by Senate Energy and Natural Resources Committee Chairman Jeff Bingaman: Should we start swapping coal-fired power plants for natural gas-fired plants? (A timely question as the gas lobby presses for incentives in the climate change bill.)

Bingaman, a Democrat from New Mexico, said the idea was posed October 28 by Lamar McKay, chairman and president, BP America. McKay testified before Bingaman's committee "that replacing about 8-10 of these old coal plants per year in this manner would account for about 10% of the cumulative 2020 domestic emissions reduction contemplated by pending climate bills, and that these reductions would come at a cost equivalent to about $13/ton of CO2 reduced," the senator said.

"I Want to Talk About Me," Toby Keith sings, and the natural gas industry seems to be singing along. But already "It's All About You," other traditional power-fuel groups might vocalize in return, along with the youth group pureNRG. For those sectors, the conversation always seems to get around to gas, anyway.

The gas industry is still seeking more from the climate change bill Congress will pass ... sometime. Probably. After having been scolded roundly by former Senator Tim Wirth and others several months ago for having missed the boat on the issue, the gas sector got itself in gear.

It hasn't succeeded so far in getting provisions it wants the Senate to include, so the industry, along with coal and nuclear, and efficiency interests, is continuing to work senators on the issue. The Kerry-Boxer bill is the vehicle for action, though it could be viewed as only a kind of position paper: A lot of horse-trading is yet to come.

The American Petroleum Institute and America's Natural Gas Alliance have many of the same members, but the associations' approaches to the Boxer-Kerry climate change bill in the Senate couldn't be more different.

"Like the House climate change bill, the Senate's Kerry-Boxer bill would hurt our economy by killing American jobs, increasing energy costs and undermining our nation's energy security," said API President Jack Gerard, the bad cop in what is shaping up as a bad cop-good cop routine. "The cost of Kerry-Boxer is even more than the House bill, and punishes consumers and businesses that depend on transportation fuels. Anyone who drives, rides a bus, flies on an airplane or ships goods to market is likely to see their costs rise."

In almost breathless prose, the New York Times discovered Sunday that there's shale gas out there.

All over the world. Lots of it. As with US shale, estimates of proved reserves are all over the map -- ranging from as low as 10 years' worth to as high as several centuries' worth.

About 30 big businesses, including several big electric utilities, are pushing the Senate for a climate change bill this year. Not the usual thing, but not surprising in this instance. A bill with dozens of provisions that make up for the pain of the mandates would be better for many of the companies than an unadorned set of requirements from the Obama administration.

At the same time, an almost innumerable list of mostly state and local companies and organizations -- but the American Petroleum Institute is in there, too -- are pushing the opposite way. MidAmerican Energy is the only big electric company involved in this group, called Energy Citizens. In DC, at least, the organization is running lots of those little bitty TV commercials urging people to save jobs and lobby their members of Congress against the measure.

Uncertainty is a dirty word in the world of the Regional Greenhouse Gas Initiative, where 2012 carbon allowance prices have sunk over the past year as buyers and sellers wait for Congress to decide how to value them in a federal cap-and-trade scheme.

Detailing the results of the RGGI market's fifth allowance auction this month, RGGI administrators said that 2012 allowance prices were just a cent above the auction clearing price of $1.86/short ton. In comparison, the first auction of 2012 allowances, held in March, saw $3.05/st.

Richard Blumenthal, Connecticut's attorney general, seems fairly certain that a 2nd Circuit US Court of Appeals ruling Monday is a big boost for those who want federal controls on coal-fired power plants' carbon dioxide emissions. With the carbon cap-and-trade bill facing formidable opposition in the Senate, proponents might well embrace anything that could nudge antagonists in the measure's direction.

"My hope is that the court case will provide a powerful incentive for polluters to be reasonable and come to the table and seek affordable and reasonable reductions," he told our colleague Brian Hansen. No matter what, though, Blumenthal said, "the courts are ultimately going to order the companies to stop this harm to our states."

The appeals court ruling rejected a federal district court decision that had turned down the effort by environmental groups, Connecticut and others to convict American Electric Power and other big coal-burning utilities of creating a public nuisance with their emissions. Asthma, heat-related illnesses and other harms are a result, was the argument by Connecticut, New York, California and others. Even Iowa.