Between President Obama’s reelection and key wins for Senate Democrats means that legislative moves to promote renewable energy sources, curb greenhouse gas emissions, and increase energy efficiency will go on.
The Environmental Protection Agency (EPA) will continue to issue energy regulations. Within the next few months, the agency is expected to finalize the first carbon standard for new power plants, as well as tighter restrictions on soot emissions of all utilities. Hydraulic fracturing, known as fracking, is also in the EPA’s sites. Federal standards on the business driving the country’s natural gas boom will be on the books in late 2013. Tighter fuel efficiency standards will also be placed on heavy-duty trucks, according to environment experts.
Laws aimed at curbing fossil fuel production are sure to be introduced. Investors reacted by sending coal-mining companies’ shares down the day after the election: Peabody Energy fell 9.6 percent; Arch Coal saw a 12.5 percent loss, Consol Energy crashed 6.1 percent, and Alpha Natural Resources declined by 12.2 percent.
Despite market jitters, Luke Popovich, vice president of communications at the National Mining Association, said he expects it will be difficult to clamp down on the coal industry.
“We still have a divided Congress, we still have the Senate with a strong bipartisan support for coal, and we still have a House anchored largely in opposition to EPA policies,” he said. “I’m not sure…we’re that far removed from where we were.”
HSBC’s global research group also calmed investors, saying that the administration “provides the basis for positive movement on clean tech and climate action once the new Congress meets,” adding that, “that scope for strategic action will remain limited.”
Washington and energy insiders also expect many members of Congress to block some laws because of potentially damaging economic impact, although environmentalists from the Sierra Club and other organizations remain hopeful.
Even critics of the president’s policies, including Jack N. Gerard, president of the American Petroleum Institute (API), see signs of hope. The API plans to works with the administration to streamline drilling permitting and avoid actions that would place limits on fracking. Gerard opposes a carbon tax because it could reduce production and raise prices.
Still, HSBC noted that a modest $20-a-ton tax on carbon emissions could slash the federal deficit by $1.25 trillion over the next 10 years.
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