Will Obama’s Second Term Usher in Tighter Regulations on the Energy Sector?

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During his inaugural address to launch his second term in the White House last week, President Obama spoke about his administration’s response to climate change and protecting the environment over the next four years.

But what can we actually expect?

The appointment of a new cabinet could be our first indication.

Both the director of the EPA and head of the Department of Energy are positions that need to be filled. The individuals selected for these positions will help give a better idea of what Obama’s expectations are for these departments.

Another key indicator will be the president’s decision on the Keystone XL pipeline.  A recent key appointment is John Kerry, who was nominated as the new Secretary of State. Kerry could play a key role in this decision on Keystone. He has been a keen supporter of climate change action in the past. This will be significant given that the State Department has control over this decision because the proposed section of pipeline crosses the US-Canada border.

An updated proposal for the pipeline route was accepted last week by Nebraska but the State department has announced that they won’t be able to finish their own review of the proposal until March. Once the review is complete the decision will land squarely on the President’s desk.

For a greenhouse gas emission reduction plan it’s likely that the EPA would be a natural choice to lead the process.  2012 was not the best year for the EPA in terms of setting national restrictions on emissions.  In particular, the Cross-State Air Pollution Rule was vacated by the US District Court this August. This continues a trend which, over the past few years, has seen the Mercury and Air Toxic Standards and the Clean Air Interstate Rule successfully challenged in court.

On the positive side for President Obama, the court did rule the EPA was within its jurisdiction to regulate CO2 emission under the Clean Air Act.  Regionally, California, through its own state program, has been able to implement a cap and trade system for CO2.  This system would likely be used as the structure for a national program.

The reality is that even if there is a serious push to implement a comprehensive greenhouse gas reduction plan, there are a number of obstacles in the way. For one, the House of Representatives is still controlled by the republicans and there have yet to be significant signs of bipartisanship on the issue.

Further, any rule that is put into effect will likely face legal challenges like other national plans that the EPA has put forward.


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