Power Execs Foresee Carbon Emission Caps
Saturday, October 21, 2006; 10:24 PM
-- When Duke Energy Corp. CEO James E. Rogers considers global warming, he sees more than a costly quagmire for the U.S. power industry; he sees grand monuments. Notre Dame in Paris, St. Peter's Basilica in Rome.
Rogers has adopted what he calls "cathedral thinking," a view that tackling climate change is a chance for the industry to leave a proud environmental legacy for future generations.
This philosophy may not deliver results as quickly as environmentalists would like, or sit well with all his counterparts, but it does aptly describe an approach toward reducing greenhouse gases that a small but growing number of power executives are embracing.
"The science says we need to act," said Rogers. Of course, shifting political winds are an equally persuasive force in an industry that accounts for almost 40 percent of U.S. carbon dioxide emissions.
Rogers and many other executives are convinced the United States is likely to join Europe in placing limits on carbon dioxide emissions _ believed by scientists to cause global warming _ perhaps as early as next decade. This rising expectation of mandatory carbon caps is reviving interest in nuclear power, accelerating the use cleaner coal-burning technologies and spurring investment in alternative fuels such as wind and biomass.
Some of the country's biggest power producers are even setting voluntary greenhouse-gas reduction goals now in hopes of gaining a competitive edge down the road.
"The first movers now kind of realize... there will be a carbon regime in this country," said Peter Fusaro, chairman of Global Change Associates and a longtime proponent of clean energy. "This is not just talk," he added.
Despite good intentions, however, it will likely be several decades before any meaningful progress is made on reducing carbon emissions, according to experts on energy and the environment. That is because half the country's electricity comes from burning coal _ by far the largest industrial source of carbon dioxide _ and the most promising technology for capturing these emissions and sequestering them underground is still in the experimental phase.
Meantime, the Edison Electric Institute, the industry's main trade association, is lobbying to prevent mandatory carbon caps, calling them an unnecessary financial burden at a time when the power industry needs to invest billions just to meet anticipated demand.
Rogers, who is the chairman of EEI through next June and welcomes economy-wide carbon caps, is at odds with the association's official position: it favors voluntary measures, a stance also advocated by the Bush administration.
U.S. electricity demand is expected to rise by about 1.5 percent a year, resulting in a 50 percent increase from current levels by 2030. Factor in the anticipated industrialization of China, India and other developing nations, and the global rate of growth for electricity demand is even higher.
The Electric Power Research Institute forecasts that, with today's technology, global carbon dioxide emissions will more than double by 2050 to 80 billion metric tons a year. The U.S. already accounts for more than 7 billion tons a year.