Oil refineries in Salt Lake City. Credit: Sergey Novikov/Adobe Stock

The heads of two U.S. fossil fuel industry associations took the Obama administration to task last week for what they said is a misguided and unfair energy policy. At the same meeting, a solar energy association leader applauded federal policies as favorable for growth in his industry.

The administration’s approach to energy regulation and support harms the fossil fuel industry, picks energy favorites, and forces higher energy costs on consumers, said top executives of the American Petroleum Institute (API) and the National Mining Association (NMA) at a 21 January State of the Energy Industry Forum organized by the United States Energy Association in Washington, D.C. One exception was the head of the Solar Energy Industries Association, who painted a bright picture for solar power in the United States.

Jack Gerard, president and CEO of the American Petroleum Institute. Credit: Randy Showstack
Jack Gerard, president and CEO of the American Petroleum Institute. Credit: Randy Showstack

API president and CEO Jack Gerard said the oil and natural gas industry and its long-term prospects remain healthy, despite the current downturn in prices. The U.S. model of a market-driven, consumer-focused approach to energy policy works, he said. “We can grow our economy, provide consumers with abundant lower cost energy, improve our environment, and lead the world in energy production, all, by the way, while fighting the headwinds of almost 100 federal regulations that thwart American energy production,” Gerard stated.

Among those regulations, he targeted the administration’s Clean Power Plan, which the U.S. Environmental Protection Agency (EPA) has called “a common sense plan to cut carbon pollution from power plants.” Gerard argued that the plan “tilts the scale” of energy markets “as a means to further a particular political ideology” and that the plan overlooks the successes of domestic natural gas producers at lowering electricity prices and reducing carbon emissions.

In an interview with Eos, Gerard said that leaving fossil fuels in the ground to reduce greenhouse gases is an “irresponsible” approach. “If you look at the administration’s projections, they will tell you by 2040 still 80% of all the energy we use in the United States will be fossil fuels. So why would we promote a policy that says ‘let’s go raise costs [for] consumers by keeping the energy in the ground’?”

Pressures on Coal, Including “External Threats”

Speaking for the mining industry, NMA president and CEO Hal Quinn said that the global picture for coal remains “bright and very stable.” Between 2010 and 2015, 465 gigawatts came online globally, he said. Quinn added that another 353 gigawatts of coal generation now under construction, mainly in China and India, exceeds by about seven times the coal capacity that he said EPA hopes to take offline in the United States by means of the Clean Power Plan.

Hal Quinn, president and CEO of the National Mining Association. Credit: Randy Showstack
Hal Quinn, president and CEO of the National Mining Association. Credit: Randy Showstack

However, currency fluctuations, the economic slowdown in China, and excess global capacity have hurt U.S. coal exports, Quinn said. Policy-driven “external threats,” such as EPA’s Mercury and Air Toxics Standards for power plants, “have destroyed 20% of coal markets over a very short period of time,” he added. Quinn said that he sees the Clean Power Plan as “the biggest threat to the industry’s ability to rebound.” He said the president should “reembrace” his administration’s 2008 commitment to advancing technological solutions, including funding for clean coal technology, which Quinn said could help to significantly reduce emissions.

“If fossil fuels are going to be 80% of the energy mix well out to 2040 and beyond, then we’re really going to need technological solutions, not fuel substitution,” he said, adding that what the administration wants are “symbolic but very costly gestures to demonstrate what they believe on the world stage would be climate leadership.”

A Bright Future for Solar Energy

Rhone Resch, president and CEO of the Solar Energy Industries Association, also addressed the forum. He said solar is strong and getting stronger in the United States and applauded federal support for the industry. He credited  the growth in solar to lower prices and a solar investment tax credit, which Congress extended for 5 years in the omnibus appropriations bill passed last December.

Solar power has reached 1% of total energy generation in the United States, up from 0.1% just 5 years ago, and is expected to hit 3.5% by 2020, Resch said. “Solar is here,” he said. “It’s going to be part of the energy mix.”

—Randy Showstack, Staff Writer

Citation: Showstack, R. (2016), Oil, coal industry leaders fault Obama policies at energy forum, Eos, 97, doi:10.1029/2016EO044895. Published on 28 January 2016.

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