Energy industry preparing for limits on CO2 emissions

[n2doc]

Energy industry preparing for limits

By ZACHARY COILE
SAN FRANCISCO CHRONICLE

WASHINGTON -- When the head of the American Public Power Association spoke recently to electric utility operators in Minnesota, he had a straightforward message: Federal regulation of greenhouse gases is coming. Get ready for it. "The issue is no longer whether there is a human contribution to global warming but the extent of that contribution," said Alan Richardson, president and chief executive of the group, whose members supply 15 percent of the nation's power. There is, he added, "an emerging public consensus and a building political directive that inaction is not a viable strategy." For years, most industry groups have fought any effort to limit carbon dioxide and other gases linked to global warming, warning of dire consequences for the U.S. economy. But with growing public anxiety about climate change, major corporations are increasingly preparing for -- and in some cases lobbying for -- Congress to regulate emissions of heat-trapping gases.

The industry's response is evolving in spite of opposition by the Bush administration to limits on carbon dioxide. But businesses are reading the political tea leaves. Legislation to limit greenhouse gas emissions is gaining ground in Congress with members of both parties. States, especially California and those in the Northeast, are moving forward with climate-change regulations. Two likely presidential hopefuls for 2008 -- Republican Sen. John McCain of Arizona and Democratic Sen. Hillary Clinton of New York -- have called for reining in greenhouse gases.

"The scientific evidence is real," said Betsy Moler, vice president for government and environmental affairs at Exelon Corp. of Chicago, an energy firm that supports a mandatory cap on carbon dioxide emissions. "When you have the likes of Sen. Ted Stevens of Alaska, a conservative Republican, and he says he has seen the changes in his lifetime in the Arctic, there is just no doubt that something has to happen." The trend became clear in April, when the Senate called America's top energy companies -- including some of the nation's largest emitters of greenhouse gases -- to testify about new legislation to regulate emissions.

Six leading energy companies went on record supporting mandatory limits on emissions of CO2, including Shell, Duke Energy, Exelon, General Electric, Sempra Energy and PNM Resources, a utility based in Albuquerque, N.M. Even the world's largest retailer, Wal-Mart, voiced its support for new limits on greenhouse gases. Only two energy firms testifying opposed new regulation: American Electric Power and the Southern Company, electric utilities in the Midwest and South whose power plants are the biggest emitters of greenhouse gases in the country. Both companies prefer a system of voluntary reductions by industry favored by the Bush administration.
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