President Obama: Cap and Trade, Good for Energy Production

Fargo Forum reporter Janell Cole asked good questions of President Obama in a White House interview Monday, seeking to gain the President’s insights on the effects of cap-and-trade on energy-producing states like North Dakota (lignite and oil).

In response, the President implied that global warming was responsible for the current Red River flooding (see below) and dismissed fears that cap-and-trade would harm the energy sector.

From “Obama: ‘Cap-and-trade’ policy won’t cripple power industries“:

[Obama], noting that he comes from a coal producing state, Illinois, said, said there are many different ways to do cap and trade.

He said, “I’m a big believer in pursuing carbon sequestration technologies that would allow us to use coal in a clean, nonpolluting fashion. But that’s going to require some incentives” – some from government and some from private sector.

“That’s happened in dealing with acid rain,” he said. “The technology caught up, it ended up being much cheaper than anybody expected.”

He believes the outcome will be good.

“I don’t think this is something to be afraid about. I think this is an opportunity. It goes hand in hand with the whole issue of energy independence,” he said.

Unfortunately, those are just vague reassurances, and comforting words are insufficient given cap-and-trade’s effect of fundamentally restructuring the U.S. economy.  Cap-and-trade will by design make electricity production from coal much more expensive, and since coal accounts for half of the nation’s electrical generation, everyone will feel the impact, consumers and manufacturers above all.  The Administration plans to redistribute the revenues to expand government programs and cushion the cost impact on some consumers, but you can’t get around the fact of more expensive energy.

And if the public revolts and Congress refuses? Washington Post, page A1 today, “EPA Presses Obama To Regulate Warming Under Clean Air Act“:

Daniel J. Weiss, a senior fellow at the Center for American Progress, a liberal think tank, said the EPA’s proposal would allow the administration to tackle climate change if Congress does not limit carbon emissions through legislation. He added that even if the EPA were forced to regulate greenhouse gases, it would target emissions from coal-fired power plants and then vehicles — which combined account for about half of the nation’s global-warming pollution — before requiring smaller operations to apply for new emissions permits.

“The way I see it, it’s, in case of legislative gridlock, break open the Clean Air Act,” Weiss said. “It’s a backup option, not ideal, but it’s a way to make progress on emissions reductions.”

(Disclosure: Cole is a friend, a former colleague and former competitior in Bismarck.)

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