State of energy generation is strong, trade group officials say

The day after President Obama delivered his State of the Union address, leaders of various energy industry sectors gathered in Washington, D.C. to say that the state of energy production is strong.

Nevertheless, trade group leaders told the United States Energy Association (USEA) Jan. 21 gathering there are real concerns about more stringent regulations and policy concerning tax incentives.

Organizations connected with coal-fired utilities or coal production cited concern over compliance with the Environmental Protection Agency (EPA) Clean Power Plan. The proposal would have states implement plans to cut electricity sector carbon dioxide emissions 30% by 2030.

It’s the most extensive rule that EPA has ever proposed said Edison Electric Institute (EEI) President Thomas Kuhn. EEI is particularly troubled by the interim 2020 requirements in the rule. “We don’t think that they can be attained,” Kuhn said. That’s because 2020 is right around the corner, Kuhn said.

American Public Power Association (APPA) President and CEO Susan Kelly would like to see carbon dioxide rules “that work.” Kelly said APPA believes the CO2 rule proposal exceeds EPA’s authority. In addition, the proposal does not properly credit public power entities for carbon reductions already made, Kelly said.

National Mining Association (NMA) President and CEO Hal Quinn said that utility fleet emissions in the nation are already down 15% from 2005 levels. The new Republican-controlled Congress and several federal court cases could have a big impact on certain EPA regulations that affect coal-fired power, Quinn said.

The most expensive electricity is the power that does not get delivered, Quinn said. Coal plants ran well during last year’s polar vortex, “or what we used to call winter,” Quinn said.

Likewise, Nuclear Energy Institute (NEI) President and CEO Marvin Fertel said that the Entergy (NYSE:ETR) Vermont Yankee plant ran well during the polar vortex. New England won’t have Vermont Yankee available this year, Fertel added.

More nuclear plants are at risk, especially in organized markets, Fertel said.

Meanwhile, renewable energy groups again stressed the need for long-term renewable of tax incentives for wind, solar and other alternative energy options.

The solar industry would like to see a long-term extension of the investment tax credit (ITC) beyond 2016, said Solar Energy Industries Association (SEIA) President and CEO Rhone Resch.

The criticism that solar often gets is “you guys wouldn’t survive without tax credits,” Resch said. But the government subsidizes all sorts of energy, Resch said. In addition, solar energy is becoming less and less dependent on government incentives, Resch said.

That said, solar is not yet a “national” industry in that utility-scale solar is heavily concentrated in 10 or 11 states, Resch said. “It’s changing over time, but clearly we have a long way to go,” Resch said.

The solar industry could benefit from EPA efforts to curb carbon emissions, Resch said.

Natural gas production called a domestic game-changer

The natural gas boom has been a “game changer” for the domestic economy, said American Gas Association (AGA) President and CEO David McCurdy. The AGA official stressed voluntary industry efforts to control methane emissions. EPA recently unveiled an aggressive program to curb methane emissions.

Interstate Natural Gas Association of America (INGAA) President and CEO Donald Santa Jr. said that methane is a “manageable” issue for natural gas.

It is increasingly challenging to develop new pipelines because it is happening in the densely populated eastern states, Santa said. Also pipelines are being targeted by those with agendas. Pipelines and liquefied natural gas (LNG) terminals “offer convenient targets.” Like the Obama administration, AGA supports the use of natural gas for combined heat and power (CHP) to provide on-site generation, for manufacturers, McCurdy said.

The technology driven increase in U.S. oil and natural gas production has created an era of “energy abundance” in the United States, said American Petroleum Institute (API) President and CEO Jack Gerard. The domestic energy revolution is “almost entirely due to hydraulic fracturing,” Gerard said. “Indecision has consequences,” Gerard said, referring to the Keystone XL pipeline question. The long, drawn-out process will have a “chilling effect” on future infrastructure investment, Gerard said.


About Wayne Barber 4201 Articles
Wayne Barber, Chief Analyst for the GenerationHub, has been covering power generation, energy and natural resources issues at national publications for more than 20 years. Prior to joining PennWell he was editor of Generation Markets Week at SNL Financial for nine years. He has also worked as a business journalist at both McGraw-Hill and Financial Times Energy. Wayne also worked as a newspaper reporter for several years. During his career has visited nuclear reactors and coal mines as well as coal and natural gas power plants. Wayne can be reached at