Ahead of Convention, Republican Governors Release Energy Plan

By: - August 23, 2012 12:00 am

A slew of new federal environmental regulations threatens to squelch U.S. energy production, hindering economic growth. And states should have more authority to regulate energy. Those are the broad — and unsurprising — conclusions of the energy “blueprint” released Wednesday (August 22) by the Republican Governors Association (RGA).

The Obama administration is holding up development of coal, oil and natural gas, the governors say, citing its crackdown on power plant emissions, new restrictions of drilling on public lands and the president’s reluctance to sign off on construction of the controversial Keystone XL pipeline.

“Emerging technologies in areas like fracking, oil exploration and coal production make American energy safer and more beneficial than ever,” Virginia Governor Bob McDonnell, the RGA chairman, said in a statement. “Inexplicably, instead of harnessing American energy, President Obama is restricting it.”

The governors were most critical of several new U.S. EPA regulations limiting power plant emissions. The long list of rules, primarily aimed at coal power producers, include caps on emissions of greenhouse gases and toxins that the EPA estimates will bring millions of dollars’ worth of health benefits. But such regulations, the governors say, threaten to raise energy prices and eliminate coal from the nation’s fuel mix, jeopardizing jobs.

The governors’ energy plan supports increased investments in so-called “clean-coal” technology and “coal-to-gas” conversions.

Aging coal plants are shuttering across the country and few new coal plants are being built. Stricter regulations have increased that trend, but it was well under way before the rollout of EPA regulations. As Stateline has reported, the abundance of cheap natural gas — spurred by leaps in drilling technology — is likely most to blame for the coal industry’s slowdown. That phenomenon was not mentioned in the governor’s plan.

A report released this month by the U.S. Government Accountability Office — a study of the impact of four EPA regulations — found that the rules would likely increase electricity prices in some regions, challenging electric reliability. According to one study cited in the report, price jumps could range from 0.1 percent in the Northwest to 13.5 percent in the more coal-dependent South.

On Tuesday, EPA’s critics scored a major victory against the agency when a federal court struck down the agency’s Cross State Pollution Rule, which sought to protect downwind states from power plant pollution blown across borders. The court ruled that the EPA had exceeded its authority in drawing up the rule, which was to go into effect in January. 

On the issue of oil extraction, the GOP governors call for more drilling and streamlined review of major infrastructure projects, including the Keystone XL pipeline. The governors’ plan would introduce revenue-sharing plans for off-shore projects, and it would pursue a “North American Energy Partnership” — dialogue between the governors and premiers of Mexico and Canada.

Regarding nuclear energy, the governors seek more authority for states to mine uranium. They also call on Congress to find permanent storage for the nation’s growing stockpiles of nuclear waste.

To develop renewable energy, the governors called for streamlined project siting and for continued state authority to set energy production targets.

Notably absent from the plan, was discussion of the federal wind-tax credit, which is set to expire this year. Congress is still debating whether to renew the 30 percent production credit, which energy experts say is essential to maintain the wind industry’s huge growth in recent years.  On the campaign trail, presumptive GOP presidential nominee Mitt Romney has said he would let the credit expire — much to the chagrin of Republican governors such as Iowa’s Terry Branstad and Kansas’ Sam Brownback. They worry their windy states could lose thousands of jobs as a result.

Mike Schrimpf, an RGA spokesman said the group has no position in that debate, but he pointed to a passage in the plan that addresses renewable energy, which states: “The government plays an important role in research and development but long-term subsidies are counterproductive. The private sector must be profitable in order to develop new technologies.”

Schrimpf did not respond to whether that philosophy also applies to entrenched federal subsidies for oil and gas development.  

The governors have shared their energy plan with their party’s platform committee, Schrimpf said.

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