Electric utilities are responsible for about 40% of all greenhouse gas emissions in the US, and the majority of that comes from coal fired power plants. This means that any attempts to reduce overall greenhouse gas emissions, and support the fight against global climate change, would do well to focus on emissions from power plants.
That is exactly what President Obama did when announcing his latest, legacy defining, climate policies last week. His new policies target the carbon emissions from new and existing power plants, and have many predicting that one of the major results that they will have, is lead to a reduction in coal use in the US.
Coal still plays a major part in the US energy mix.
This point of view only works to reinforce arguments made by Republicans and the coal industry, that Obama and his administration are anti-coal, and that this blatant attack on coal will cost jobs in coal states such as Kentucky and Ohio.
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In an attempt to deflect such statements Ernest Moniz, the US Energy Secretary, has stated that the Obama administration will renew an $8 billion federal loan program that helps coal plants to reduce their carbon dioxide emissions, proving that they are not actually ‘anti-coal’.
“The issue here is to prepare for the future, a future in which coal is in fact part of the mix,” he said.
Congress first allowed the Energy Department to offer an $8 billion loan guarantee program as an attempt to clean up fossil fuel plants, and projects, back in 2005, and in 2008 an effort was made to attract investment in clean coal projects. There have been no takers!
So whilst the Obama administration is using the scheme to appear friendly to coal, the coal industry is not actually benefitting in any way.
To increase the popularity, or just gain any interest at all, the new federal loan program will be expanded to include any projects that aim to reduce emissions from oil and gas drilling operations, and all energy efficiency projects, such as capturing and recycling waste heat from industrial facilities.
By. Joao Peixe of Oilprice.com
Joao is a writer for Oilprice.com