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The Dallas Morning News: Reducing carbon dioxide emissions a slow process, experts say

U.S. regulations and consumer urgency are slow taking hold, experts say

12:00 AM CST on Thursday, February 14, 2008
By ELIZABETH SOUDER / The Dallas Morning News

[email protected]

HOUSTON – Some energy industry insiders don’t sound very optimistic about the prospects of cutting greenhouse gas emissions in the U.S. anytime soon.

Federal regulations on carbon dioxide emissions would take some time to reduce emissions from power plants and refineries, and meeting limits could be costly for consumers.

And many consumers don’t seem willing to do much on their own. Most Americans aren’t leaving suburbia for carless urban living. Most aren’t even shopping for more fuel-efficient cars, experts at the Cambridge Energy Research Associates conference said.

“People often don’t understand how complicated it is” to cut carbon dioxide emissions, Linda Cook, executive director of natural gas and power for Royal Dutch Shell PLC, said Wednesday.

“If it were easy and it were cheap, it would already be happening,” she said.

Experts at the conference agree that Congress will probably limit greenhouse gas emissions from refineries and power plants soon.

Depending on how the rules work, it could be years before the legislation leads to significant cuts in emissions that contribute to global warming.

Legislation likely next year

Vinson & Elkins lawyer Larry Nettles said lawmakers will probably pass legislation next year because selling carbon dioxide emissions credits could help raise as much as $15 billion annually.

“We are likely to see legislation – maybe not this year, but probably next year – because this bill provides an opportunity for a gigantic, off-budget group of funds … that Congress can distribute to special-interest groups,” he said. “And we all know that that is what Congress likes to do.”

Mr. Nettles said fuel refineries and power plants would have to retire credits each year to account for their carbon dioxide emissions.

The government might give companies some credits for free at first and then ratchet down the number of credits in order to squeeze emissions.

Companies that cannot live within their emissions allotment would have to buy more credits.

The money that the government collects from selling credits might go toward clean energy research or installation of cleaner equipment at power plants and gasoline refineries, he said. But it could be years before those types of investments lower greenhouse gas emissions.

Until low-carbon technology can be built, many power companies might just buy credits rather than cut their emissions.

Higher prices may result

And consumers would end up paying for those credits in higher gasoline and electricity prices.

It’s not just the energy industry that’s moving more slowly than many might hope. Consumers aren’t shifting to greener lifestyles very quickly, either.

Most car buyers aren’t concerned with fuel economy when they choose a vehicle, despite high gas prices, said David Raney, senior manager of environmental and energy affairs with American Honda Motor Co.

In customer surveys last year, only 39.5 percent of car buyers said fuel economy played a part in their decision, he said.

Fuel economy ranked 19th in the list of criteria that customers say they consider, just above exterior color. And that hasn’t changed much in six years, he said.

“Technology has to be part of the solution, but it cannot solve the problem by itself without a responsive customer,” he said.

Two spots of optimism came from unlikely places.

The Air Force, which uses 10 percent of the U.S. jet fuel supply, is pushing fuel makers to offer a green product, a representative of the military branch says.

And Citigroup vice chairman Andrew Safran said the banks that agreed to stricter criteria for lending to carbon-intensive types of power plants are considering applying those principles to oil and natural gas facilities.

Still, extending the rules might also take time. The banks acted on power plant investments because of public outrage about coal pollution.

“We’re thinking about it,” he said.

“No one yet is banging at anybody’s door, ‘Gee, you’re financing the Barnett Shale – its carbon footprint is X.’ ”

http://www.dallasnews.com/sharedcontent/dws/bus/industries/energy/stories/DN-ceraco2_14bus.ART.State.Edition1.38b1003.html

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