Obama sees low odds of US carbon tax

OREANDA-NEWS. October 05, 2016. With months left in his final term as US President, Barack Obama defended his administration's embrace of shale exploration and predicted that a carbon tax has no realistic chance of being enacted any time soon.

Obama, in his final State of the Union address in January, called for an accelerated transition away from fossil fuels. But at a major White House event yesterday designed to showcase his administration's renewable energy accomplishments, he also told his allies in the environmental movement to "live in the real world" when it came to expectations of that transition.

"In the current environment in Congress, and certainly internationally, the likelihood of an immediate carbon tax is a ways away," Obama said at the South by South Lawn forum on climate change. The US administration recognized the limits of that approach and instead pushed for regulations such as the Clean Power Plan "as a centerpiece of our climate change strategy," he said.

The future of the Clean Power Plan, which will accelerate the transition away from coal as the primary US generating fuel, depends on legal challenges and the willingness of the next occupant of the White House to enforce it. Obama's potential successors are miles apart on climate policies. US Republican presidential candidate Donald Trump has courted potential supporters with an aggressive anti-regulatory message and opposition to restrictions on greenhouse gas emissions. His Democratic opponent, Hillary Clinton, promised to continue Obama's climate policies and promote more investment in renewable energy.

Clinton's stance has come under criticism both from Trump and from the environmental movement. "Hillary Clinton wants to shut down the [coal] mines. She also wants to shut down shale energy production," Trump said at a campaign event in Colorado yesterday. The environmental movement, in turn, is unhappy that Clinton never endorsed a wholesale ban on fracturing — a key technology behind oil and natural gas shale exploration.

But Obama highlighted the crucial role of natural gas in helping reduce the share of coal in the US power generation. "One of the reasons why we have seen a significant reduction of coal usage in the US is not because of our regulations," he said. "It has been because natural gas got really cheap as a consequence of [fracturing]."

On a monthly basis, natural gas first topped coal as the primary US generation fuel in April 2015. Gas likely will overtake coal in the US generation mix for the calendar 2016, the US Energy Information Administration projects. The US government energy forecaster expects coal to steadily lose its share of power generation to gas and renewables both as a result of price competition and the regulations such as the Clean Power Plan.

Many environmental groups see the transition from coal to natural gas as insufficient, pointing out that the increased natural gas supply comes from US shale formations. "Their attitude is we got to leave that stuff in the ground if we are going to solve climate change," Obama said. "And I get all that. On the other hand, the fact that we are transitioning from coal to natural gas means less greenhouse gases."

The fundamental change in the US power generating mix has figured prominently in the 2016 presidential campaign, as Trump has courted support from many coal mining communities and states. "Coal miners feel like they have been battered, and they often blame me and my tree-hugger friends for having created real economic problems in places like West Virginia, or parts of Kentucky, or parts of my home state of southern Illinois," Obama said.

Solving the challenge of climate change requires embracing energy sources that may not be acceptable to all, including natural gas and nuclear power, he said. "If we are going to get India or China to actually sign on to reducing carbon emissions, then we are going to have to have a conversation with them about nuclear power."

"I say all that not because I do not recognize the urgency of the problem," Obama said. "It is because we are going to have to straddle between the world as it is and the world as we want it to be, and build that bridge."