White House energy report omits Keystone, other controversial issues

McClatchy Washington BureauMay 29, 2014 

— A White House report on its energy policy Thursday stressed good news but omitted any discussion of controversial issues such as lifting a ban on oil exports, the long-delayed Keystone pipeline or growing concern about crude oil in railroad tank cars.

Coming days before a signature White House proposal to crack down on carbon emissions at power plants, the administration’s report card touting its “all of the above” energy strategy was sharply criticized by green groups. They complained that President Barack Obama tries to look tough on pollution while eroding that very effort by touting the record U.S. production of oil and natural gas.

“He’s trying to straddle the fence on this,” said Erich Pica, president of Friends of the Earth, one of several environmental groups unhappy with the Obama administration. “If he’s serious about climate change, he can’t have it both ways.”

McClatchy reported on Tuesday that the Environmental Protection Agency will propose a plan where all U.S. states are given their own greenhouse gas emissions reduction target and the power to decide how they’ll meet it. Obama is expected to announce it Monday before departing on a European trip.

The Obama plan is designed to spur use of renewable energy sources and is expected to encourage the use of natural gas at power plants. That’s a blow to coal producers, but it takes advantage of the new-found bounty of natural gas being produced thanks to the drilling process called fracking.

“The rule is going to be good in spurring the trends we’ve identified in this report,” John Podesta, counselor to the president, told reporters in a conference call Thursday.

The report Thursday does not take credit outright for the energy boom taking place in the United States, but it notes how beneficial the production has been for the economy.

“The U.S. energy revolution has contributed to the growth of the economy _ both in terms of economic output . . . and overall employment,” the report said.

Jason Furman, head of the Council of Economic Advisers, told reporters that the energy boom has added 0.2 percentage points of growth per year to the economy since 2005.

Obama aides deflected questions about whether the 42-page report amounted to a “prebuttal,” designed to deflect criticism of the coming curb on carbon emissions.

“We already regulate arsenic, mercury, lead . . . now it’s time to reduce the carbon pollution that’s causing global warming and is causing damage to our economy,” Podesta said.

While the report lauds the economic benefits from record U.S. oil production, it makes no mention of energy controversies. It’s silent on the Keystone XL pipeline, which remains in an indefinite delay but is proposed to take oil extracted from western Canada tar sands to U.S. Gulf Coast refineries. There’s also no mention of the massive increase in transport of U.S. crude oil by rail, which has led to numerous derailments and fires. And there was nothing in the report on the question of allowing the growing supply of U.S.-produced oil to be exported.

“We’re reviewing that generally,” said Podesta, offering no details.

The White House report came on the same day that respected oil historian Daniel Yergin released a report, paid for by large players in the oil sector, arguing that ending the 1970s-era ban on exporting U.S. oil would spur growth and yield lower gasoline prices.

Also Thursday, the Department of Energy issued a new proposal to revise the process by which it authorizes the exports of liquefied natural gas. Just a few years ago, the United States was building terminals to import LNG, but now the new domestic gas production has created a push to export it.

This year’s unusually harsh winter caused home heating prices to spike. That’s raised worries that exporting domestic natural gas could lead to tight supplies in cold weather, driving up prices for consumers and businesses.

Some U.S. manufacturers benefit from cheap and plentiful natural gas and have banded together in a coalition called America’s Energy Advantage. It seeks to limit liquefied natural gas exports to countries that have a free-trade agreement with the United States.

For environmental groups, the export question adds insult to injury.

“The problem with ‘all of the above’ is it grants the opportunity to distribute our fossil fuels and carbon pollution to the rest of the world,” said Pica, saying the president can’t crack down on emissions and champion production. “They’re just incompatible.”

Email: khall@mcclatchydc.com; Twitter: @KevinGHall.

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