As the US Congress gets ready to form and pass legislation on the level of pollution utility companies and fuel companies will have to pay for, serious infighting has emerged among the various factions of the energy industry, including the powerful oil and gas lobby in the United States.
A number of lobbying efforts are underway from different sectors such as the coal industry, utilities, oil, gas and renewable energy companies to get a set of rules favorable to their particular industry in the upcoming legislation. The legislation has proposed a cap and trade structure, wherein an industry is allowed a certain level of carbon dioxide emissions, but has to pay to purchase carbon credits for the extent to which they exceed these levels.
Renewable energy companies, hydroelectric power generators and other clean fuels like nuclear power are happy that they are least affected, but the others like oil and coal are trying their best to wriggle out. The Obama Administration has been actively focusing on the bill, raising concerns among the more polluting industries about their continuing profitability and the specter of rising fuel costs for consumers.
Coal is seen as the most polluting, with over 30% of the country’s energy needs coming from coal burning power plants. The industry has been trying to project itself as the safest and cheapest alternative and hence eligible for concessions on carbon credits on the promise that carbon dioxide emissions can be controlled by capturing emissions and storing them underground through technology yet to see the light of day.
Oil and gas producers, which were previously united in opposing any legislation to slow down emissions, are now going their separate ways with the gas lobby investing heavily to claim that their emission levels are about half those of the conventional coal-fired power plants.
With the change in policy now appearing increasingly inevitable, fuel producers and utilities will be under pressure to clean up their act. They can do well to follow the example of China. Though China has greater emissions through their coal fired plants, the country has been investing heavily in high end technology for the same, resulting in one new plant replacing and older less efficient one every month. In fact, China and South Korea are currently leading the world in investing in green technology. One measure of this is the forecast that China will lower its emissions in spite of increasing economic activity over the coming year.
Even within the broader business spectrum in the US, there appears to be a high level of discord with companies like Apple breaking away from the US Chamber of Commerce in opposition to its stand on refusing to support emission controls. The entire legislation process is a path breaking one for the US, the world’s single largest consumer of energy and also its worst polluter. President Bush and the Republicans have consistently opposed emission regulation, claiming developing nations like India and China were the chief culprits and refusing to sign the Kyoto Protocol in a “Do as I say, not Do as I Do” attitude which the current administration is at pains to correct. Even within the US, only a few states like California, which suffer from excessively high pollution levels, have made any serious efforts at cutting emissions. The outcome of the process may shift quite a few milestones for the energy industry in the coming days.