Texas Gov. Rick Perry Should Support New EPA Coal Regulations Which Would Boost State's Gas Economy: Report

Some of the most vocal critics of President Barack Obama’s plan to cut carbon emissions could see their states reap big economic benefits from the rules, a new study says.

As the nation steadily curbs its appetite for coal-fired electricity – the largest source of U.S. carbon emissions – demand for lower-carbon natural gas is expected to pick up dramatically, which will bring economic prosperity to the states that produce it, according to the Center for Strategic and International Studies and the Rhodium Group, the two research groups that conducted the study, the New York Times reported Thursday.

Arkansas, Oklahoma, Louisiana and Texas in particular will likely see job growth, rising corporate revenues and higher government royalties because of the boost in natural gas production over the next decade. The four states together could experience an annual net benefit of as much as $16 billion, according to the study.

Yet in each of those states, political leaders have sharply criticized the Environmental Protection Agency’s proposed power plant regulations and have rejected Obama’s broader agenda to address climate change -- whose existence some of them deny altogether.

Under the rules, unveiled on June 2, each state is required to reduce emissions from existing power plants by a certain percentage, the exact number depending on the state’s current power supply mix. Overall, the country would see emissions fall to 30 percent below 2005 levels by 2030. While states can choose how to meet those targets, in many places the rules should mean an accelerated shift away from coal-fired plants and toward natural gas-powered facilities.

“The irony is that some of the states that have been the loudest in opposing EPA climate regulations have the most to gain in terms of actual economic interest,” Trevor Houser, an analyst at the Rhodium Group and a co-author of the tudy, told the Times.

Sen. James Inhofe, R-Okla., for instance, a prominent skeptic of the “global warming thing,” has indicated that he will fight the EPA proposals, which he has previously said will cause widespread power outages because too many coal plants will be forced to shut down. At a Senate committee hearing Wednesday, he told EPA Administrator Gina McCarthy that the state requirements seemed to be an overreach of the federal government’s authority and “could dramatically reshape an entire sector of the economy.”

Louisiana Sen. David Vitter, also a Republican, said the rules would unfairly burden American citizens. At the hearing, he said the benefits of a U.S. climate policy – meaning the avoidance of severe climate impacts – would be primarily enjoyed by other countries, while all of the costs would be borne by the United States. Vitter also expressed concern that in Louisiana, an emissions reduction requirement could hinder economic growth at a handful of “significant job-producing industrial projects coming online in the next five to 10 years” that will dramatically increase the state’s electricity demand. (Southern Louisiana will be under water if sea levels rise as predicted by climate models.)

Gov. Rick Perry of Texas, who similarly doubts that humans are causing climate change, wrote Obama a letter in May that said, “Mr. President, your words promise an energy renaissance while your policies are strangling the energy,” the Times reported.

While the gas-rich states stand to gain in a lower-carbon future, however, the EPA rules will likely hurt states where coal production is central to the economy – such as Wyoming, the reported concluded. States that produce both coal and natural gas, like Pennsylvania, might see little change economically, since rising natural gas production will help offset falling demand for coal.

The EPA projects that by 2030, coal plants will account for about 30 percent of total U.S. electricity generation, down from about 40 percent in 2013. Natural gas, meanwhile, will rise to about 32 percent of total power generation, up from 27 percent in 2013 and just 16 percent in 2000. Natural gas produces about half as much carbon dioxide per energy output as coal-fired generation, and increased drilling and production has helped to reduce prices and improve gas’s competitiveness in recent years.

Coal-state legislators have, not surprisingly, also challenged the EPA regulations, arguing that a forced shift away from coal will kill thousands of coal industry jobs and raise Americans’ electricity bills.

Sen. Mitch McConnell of Kentucky, the chamber’s Republican leader, is already preparing legislation to block the rules. On the Senate panel on Wednesday, Sen. John Barrasso, R-Wyo., said he would request documents from the EPA to examine the outsized influence of “high-powered Washington lobbyists” in writing the climate change proposal.

The EPA’s proposals are up for public comment through Oct. 16, during which time the agency will meet with individual states to address their concerns, McCarthy said at the hearing.