U.S. EPA CO2 rules unrealistic, federal drilling restrictions too limiting, says U.S. Chamber executive | cleveland.com

CLEVELAND, Ohio — The Obama administration’s goal to cut power plant carbon dioxide emissions is too much, too soon, a leading industry spokeswoman charged Friday.

“We need to be looking at what is technologically achievable,” said Karen Harbert, president and CEO of the U.S. Chamber of Commerce’s Institute for the 21st Century, in a rapid-fire and hard-nosed address before the City Club of Cleveland that focused mostly on oil and gas development before challenging the new power plant regulations.

The rule proposed by the U.S. Environmental Protection Agency will initially force utilities to upgrade coal-fired power plants or close them, she said, and push them into natural gas, she added in an interview after her address.

That’s not wise, she said during the interview.

“We don’t want to be a one-trick pony,” she explained, “and 10 years from now, it (the EPA proposal) starts to penalize natural gas.”

Proposed tightening of the emission rules over time would ultimately force utilities to somehow make gas-fired power plants more efficient and cleaner than they are now, or go nuclear, she said.

What about renewables?

“We are all for wind. And all for solar,” she said.

We are all for wind and solar. The policy right now is let’s make fossil fuels more expensive so renewables, can compete,” Karen Harbert, U.S. Chamber

“The policy right now is let’s make fossil fuels more expensive so the more expensive sources, renewables, can compete with them” she added, ignoring a suggestion that in some states, including Texas and Oklahoma which have vast reserves of gas, that wind generation has already become cheaper than coal and even gas.

“Instead, why don’t we make these things more competitive, the renewable side,” she said. “And those (prices of renewable power) are starting to come down.”

In her remarks to a luncheon audience of about 60, Harbert pulled together projected U.S. and global energy demand over the next 35 years and then noted that right now because of shale oil and gas development, the United States has the largest reserves in the world that will last at least 100 years.

“In the year 2000, shale gas was about 2 percent of our supply. Right now it is 30 percent and by 2035, it is going to be 50 percent,” she said, “shale gas, the thing we didn’t have at the beginning of this decade.”

Shale gas has developed rapidly once producers were able to refine hydraulic fracturing of the dense rock.   But some analysts have been sharply critical of the industry’s assertion that the nation now has a 100-year-supply.

Asked in an interview to address that criticism, Harbert said analysts often look at the supply question from an economic point of view rather than technological. She said she believes producers will find even more than a 100-year reserve supply in ultra deep shale.

Whatever the cost, shale gas must be developed, she said. Without shale gas, the nation would be looking to import gas in the future, as it desperately was back in 2005 and 2006, after hurricanes Rita and Katrina devastated Gulf of Mexico drilling rigs, flooded New Orleans and knocked out gas processing plants and pipelines on the Gulf coast.

Even before those catastrophes, the industry was desperate to find new reserves, she noted, and the question of winter supply was an annual concern.

U.S. companies could dominate global gas and oil  markets, she said, but not unless they act quickly because shale development is beginning to happen around the world. Meanwhile, federal rules are limiting off-shore exploration and on federally owned lands on-shore.

To concerns that exports would lead to soaring prices here, Harbart said not all proposed liquefaction and export plants would be built, partly because each would cost about $5 billion.

She said at most exports would take 8 billion or 9 billion cubic feet a day out of domestic supplies — raising the price about 12 cents.

“We’ve got to get this right. We need it for our competitive advantage, but also if we don’t have it, we’ll be looking to Qatar, Nigeria Iran, and other places. Will it be here, at home, or going to other places we don’t care to?”

Unfettered by anti-development regulation, the oil and gas industry investments over the coming decades will amount to $5 trillion in investments she argued.

“This is irreversible, you will either be in it, or producing things for it,” she said. “It is (already) what is propping up the economy.”

via U.S. EPA CO2 rules unrealistic, federal drilling restrictions too limiting, says U.S. Chamber executive | cleveland.com.