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Obama’s climate conundrum: Oil and gas versus low emissions

Barack Obama wants to cut carbon emissions. The US president also wants to increase domestic oil and gas production. Can he do both?

Even as US oil and gas production reaches new highs, Washington is putting its foot down on climate change. 

In a speech to Georgetown University on 26 June, US president Barack Obama fleshed out an ambitious blueprint to reduce coal-fired power generation and position the US as a leader in “a global assault” against greenhouse gases (GHGs).

Through a series of executive orders, the Environmental Protection Agency (EPA) will be charged with developing new rules for carbon emissions - these will apply mainly to coal-fired power plants responsible for 40% of US GHGs.

The administration has set a goal of obtaining a minimum of 20% of the government’s electricity from renewable sources by 2020. The Pentagon, the US’ largest energy consumer, will install 3 gigawatts of renewable power on military bases in the same period.

The president also directed the Interior Department to fast-track enough renewable energy on public lands to power more than 6 million homes. The US will seek international agreements, including a global free-trade agreement in clean energy technology, and share NASA climate data with the aim of coordinating global carbon standards. “The actions I’ve announced today should send a strong signal to the world that America intends to take bold action to reduce carbon pollution. We will continue to lead by the power of our example,” Obama said.

He pledged continued public support for renewable: directly through subsidies, and indirectly through the promotion of private venture capital funds. All this, while increasing domestic production of oil and gas.

In May, the US government’s Energy Information Administration (EIA) reported that US oil output exceeded imports for the first time since 1997, at 7.3m barrels a day (b/d). In June the International Energy Agency (IEA) reported that the US remains the world’s largest natural gas producer, with mounting contributions from unconventional shale gas.

Obama seized on these points: “We should strengthen our position as the top natural gas producer because, in the medium term at least, it not only can provide safe, cheap power, but it can also help reduce our carbon emissions. The bottom line is natural gas is creating jobs. And it’s the transition fuel that can power our economy with less carbon pollution.”

Obama’s speech nonetheless revealed weaknesses in his position. He was unable to secure broad support for a cap-and-trade programme in 2009, and has been forced to exercise executive power on climate and energy initiatives after Republican opposition to a series of proposals.

He used executive power to implement the toughest fuel economy standards in US history in August 2012 - 54.5 mpg for all cars and trucks sold in the US.

Yet the two most pressing issues facing the US energy sector remain unresolved: the future of US liquefied natural gas (LNG) exports from the Gulf of Mexico and the fate of the proposed Keystone XL pipeline from Canada.

Despite expressing strong support for increasing natural gas supplies, Obama failed to mention LNG exports in his speech. Likewise, oblique rhetorical references to KXL seemed to leave the door open for a special presidential permit later this year. Obama did not say he’d approve the controversial pipeline, but did not reject it either.“Allowing the Keystone pipeline to be built requires a finding that doing so would be in our nation’s interest. And our national interest will be served only if this project does not significantly exacerbate the problem of carbon pollution,” he said.

The language mirrored the findings of the State Department’s supplementary environmental impact statement (SEIS) released in March. It found no substantial increase in emissions as a result of the pipeline. Obama said the net effects of the pipeline on climate would be critical in determining whether it will proceed. Emissions from Canadian oil-sands crude are 17% higher than conventional oil produced in the US, but the SEIS projected the net emissions from Canadian heavy oil are comparable to existing grades of imported heavy crude refined in the Gulf of Mexico.

Obama added his proposed energy policy is “about more than just building one pipeline. This does not mean that we’re going to suddenly stop producing fossil fuels. Our economy wouldn’t run very well if it did.”

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