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Oct 18 2016

Federal clean energy plan looks like a “win-win” for Texas.

by david in Blog with 0 Comments

If Obama’s climate change plan is upheld in court, what would it mean for Texas?

Tom Benning
Washington Bureau
10/18/2016
HOUSTON SHIP CHANNEL (FOR RELEASE)
WASHINGTON — For John Dudley, wind power in Texas is a “win-win.” The 72-year-old rancher in Comanche County, two hours southwest of Dallas, hails the large wind farm that sits partly on his land as a boon to the local tax base. He appreciates the nice business sideline to his cattle operation. He even likes how the massive turbines look. But as the world awaits the legal fate of the Clean Power Plan — the sweeping climate change proposal that, among other things, would boost the wind industry — Dudley also admits that he doesn’t “much favor” the federal government telling “states what they should and shouldn’t do.” “I’m a big believer in states’ rights,” said Dudley, who declined to comment specifically on the plan. That kind of conflict underscores Texas’ complicated role in the ongoing debate over President Barack Obama’s signature proposal to cut power plants’ carbon dioxide emissions. Texas is better positioned than many states to meet the plans’ markers, thanks to market forces that have elevated natural gas, wind and solar. But the state, a hotbed of opposition to what some call a costly overreach, also has certain features that could prove challenging. With both sides digging in, Texas could help answer a key question raised recently in oral arguments before a federal appeals court: Just how transformational is the Clean Power Plan? “The devil is in the details, but they are both right,” said Kenneth Medlock, senior director of Rice University’s Center for Energy Studies.
The Environmental Protection Agency last year issued the plan, which seeks by 2030 to cut power plants’ carbon dioxide emissions by a third from 2005 levels. The proposal was critical to the White House joining other nations in a global agreement to combat climate change. Under the plan, EPA would task each state with an emissions goal. Texas would have to cut 51 million tons from its annual average of 241 million tons in 2012. The regulations would target coal-fired electric plants and, thus, would hit coal states like West Virginia the hardest. But the states would also be given some flexibility. “We’re not going to dictate to you exactly how you do it,” Obama said recently. “But if you don’t start reducing them, you’re going to have problems.” Still, Texas and 27 states last year sued the EPA. The U.S. Supreme Court paused the plan in February. A federal appeals court heard the case last month, with a ruling expected in the next several weeks. It’s likely that the Supreme Court will again weigh in on the plan. And adding to the drama is the 2016 presidential campaign, which could decide the proposal’s fate once and for all. Democratic nominee Hillary Clinton has cheered Obama’s climate push, vowing to press ahead with his agenda in the U.S. and abroad. But GOP nominee Donald Trump, who’ssaid climate change is a hoax, has pledged to repeal the regulations and others like it. “This is a huge case,” appellate judge Brett Kavanaugh said last month. “It has huge economic and political consequences.”
<p>At a recent White House event with President Barack Obama, Texas Tech climate scientist Katharine Hayhoe touted Texas' wind power: "Here's the cool thing about Texas. Did you know that already Texas is getting 10 percent of its electricity from wind?" (Al Drago/The New York Times)</p><p><br></p>

At a recent White House event with President Barack Obama, Texas Tech climate scientist Katharine Hayhoe touted Texas’ wind power: “Here’s the cool thing about Texas. Did you know that already Texas is getting 10 percent of its electricity from wind?” (Al Drago/The New York Times)

So what would it mean for the Lone Star State? Texas is the biggest carbon emitter in the U.S. It’s the heart and soul of the oil business. It’s a growing state with a large industrial base. But it’s also the epicenter of the natural gas boom. It’s by far the country’s top wind energy producer. It has significant solar potential.

And all sides agree that Texas has made strides toward a “cleaner” energy mix. “Texas knows energy,” Texas Tech University’s Katharine Hayhoe said at a recent White House event. “And here’s the cool thing about Texas. Did you know that already Texas is getting 10 percent of its electricity from wind?” In 1994, Texas’ electric power generation by source was 41 percent coal, 47 percent natural gas, 9 percent nuclear and 0 percent wind, according to the Energy Information Administration. By 2014, it was 34 percent coal, 47 percent natural gas, 9 percent nuclear and 9 percent wind. Experts point to the low price of natural gas as key to driving the market. There’s also been the increased buy-in on wind power from Texans such as Dudley, the rancher who said the turbines are “ultimately a good thing.” And Clean Power Plan boosters such as John Hall of the Environmental Defense Fund tout the EPA’s proposal as an incremental, yet significant step. Though Hall said the regulations are needed to force other states into emissions reductions, he argued that Texas is sitting pretty. His group recently updated its analysis to show that Texas would actually exceed the plan’s goals under “business-as-usual conditions.” “Because of the competitive market, Texas isn’t going to have to do anything else,” he said.

That argument doesn’t quite cut it for the plan’s detractors. “It’s one thing for a market, which reacts to commodity prices, to change the fuel mix for electricity,” said Scott Segal, a Dallas-bred attorney who represents energy companies in Washington. “It’s quite another for the government to require it by mandate.” But opponents don’t just object philosophically to what they see as an unlawful power grab. They also challenge the notion that there won’t be an impact on cost and reliability in Texas. One data point has come from the Electric Reliability Council of Texas, which operates the state’s main power grid. Its study said the climate plan could increase Texans’ energy bills by 16 percent by 2030, though critics point to other stats in disputing that.
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Either way, Texas’ not-insubstantial fleet of coal-fired plants remains a key factor. Though many of those plants are heading toward the end of their functional life span, the Clean Power Plan could accelerate their demise. And some predict that would have an outsize impact on rural electric cooperatives, such as San Miguel Electric Cooperative in South Texas. In an affidavit filed in the legal battle, San Miguel’s general manager said its coal-fired plant isn’t expected to retire until 2037. The climate plan would effectively force an early closure, he said. To do that while meeting its financial obligations, customers would see higher bills. And more broadly, experts said, the treatment of Texas’ coal-fired plants could be central to answering just how far along the state would be in meeting the Clean Power Plan’s goals. “Is Texas a long way towards? Yes,” said Medlock, the Rice expert. “The fundamental issue is what you do with the coal-fired generation in the state. … If you start closing that stuff down, how do you make up the lost capacity?”

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