How Obama regulations will affect energy industry
Coal-fired power plant closures could more than double under the Obama administration's climate rules than under existing regulations, with power sector carbon dioxide emissions possibly falling by about one-third, a federal analysis found.
U.S. Energy Information Administration case studies also suggest average retail electricity prices may spike 3 percent to 7 percent higher within the next decade. Cumulative U.S. gross domestic product may take a hit of up to 0.25 percent by 2040, subject to future policy decisions, the agency added.
The EIA analyzed potential effects of the Clean Power Plan, a carbon standards policy proposed by the Environmental Protection Agency last summer. The regulations-a hallmark of President Obama's environmental policy-would seek to reduce carbon emissions, which the EPA and some scientific studies have attributed to climate and health drawbacks.
Obama has previously announced executive actions on carbon pollution and a joint emissions reduction target with China, among other environmental actions during his time in office. Many in the power industry have voiced opposition to the CPP since it was proposed.
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The electric power sector accounted for about one-third of U.S. greenhouse gas emissions in 2012, according to the EPA. The EIA said that by 2030, power sector carbon dioxide emissions under the CPP would fall about one-third from 2005 levels.
Projected U.S. coal production could fall 32 percent by 2025 relative to current policies, the agency found. After an initial spike, natural gas production and prices will likely not "significantly move" under the plan.
Despite the projected rise in electricity prices by 2025, total electricity expenditures by 2040 are expected to be "slightly lower" than under the current trajectory, the agency added.
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The study is not a cost-benefit analysis as it could not account for some factors, including certain environmental and health effects, the EIA said. It also evaluated the CPP as proposed last summer, and the policy's final form will take into account more than 4 million comments the EPA has received since.
"EPA appreciates EIA's work to develop this assessment based on the agency's proposed Clean Power Plan, and the agency will be reviewing the assessment as we work to develop the final rule," the EPA said in a statement Friday.
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