Gov. Pence vows to fight Obama's plan to cut carbon emissions

WASHINGTON — Indiana Gov. Mike Pence vowed Monday to fight a national plan to combat global warming, joining the state's business leaders in arguing that coal-dependent Indiana would face higher electric rates and lost jobs if power plants have to reduce carbon emissions.

The reaction was swift as the Obama administration announced proposed restrictions on carbon pollution, which it says are achievable and affordable even in coal-dependent states. Indiana would have to figure out how to put 20 percent less carbon pollution into the air when generating the same amount of electricity.

Pence and the state's business leaders called the draft environmental rules too difficult for the state to meet, given its reliance on coal-fired power plants which generate the most greenhouse gases.

Indiana gets more than 80 percent of its energy from coal-fired plants — about twice the national average.

"(The proposed regulations) will cost us in higher electricity rates, in lost jobs, and in lost business growth due to a lack of affordable, reliable electricity," Pence said in a statement. "Indiana will oppose these regulations using every means available."

Federal officials said the reductions are doable because the Environmental Protection Agency took into account each state's current mix of fuel, and because states have choices in how to comply.

"This plan is all about flexibility," said EPA Administrator Gina McCarthy. "That's what makes it ambitious, but achievable."

Nationally, the proposal is intended to reduce carbon dioxide emissions from power plants 30 percent from 2005 levels by 2030, an amount the EPA says is the equivalent of taking two-thirds of the nation's cars and trucks off the road.

Indiana's power plants produce more carbon dioxide than plants in all but three other states. But emissions have already declined 19 percent in Indiana since 2005, largely because of the retirement of coal-fired units, or by burning somewhat cleaner natural gas instead of coal in the units.

The EPA doesn't say how much lower Indiana's emissions have to be by 2030. Instead, its proposal sets a target for how much carbon can be generated for the amount of electricity produced.

Indiana plants, which produced 1,923 pounds of carbon pollution per megawatt hour of electricity in 2012, could only produce 1,531 pounds of carbon per megawatt hour by 2030.

A spokeswoman for Duke Energy, the state's largest electric supplier, said it's too soon to tell what impact the proposal will have on its operations.

"We want to keep electric rates as low as possible, so we'll be taking a careful look at the potential costs our customers will ultimately bear from the proposed rule," said spokeswoman Angeline Protogere.

A spokeswoman for American Electric Power, which owns a plant near Rockport that ranked 10th in carbon dioxide emissions among power plants across the country last year, said the company is still evaluating the proposal.

AEP spokeswoman Melissa McHenry noted the proposal is just the beginning of a multi-year implementation process. But, McHenry said, it appears that some states where AEP has plants could have to cut emissions much more than the overall 30 percent national reduction.

"Climate change is a global issue, and some states should not bear a disproportionate share of the cost of U.S. action to cut emissions," McHenry said.

A senior EPA official who spoke to reporters Monday on condition that she not be named, said the targets took into account whether a state was coal dependent, and what reductions were achievable by increasing renewable fuels, reducing energy consumption or other methods. Another factor was how easily a state could switch from coal to natural gas.

"If a state has more excess natural gas generation capacity, the EPA is going to give that state a relatively more stringent target," said Kyle Aarons, a senior fellow at the Center for Climate and Energy Solutions.

Instead of the federal government setting emissions levels for each power plant to meet, the proposed rule would give states until June 2016 to decide how to cut pollution.

Supporters of limits on power plant emissions argue that states like Indiana that have lagged behind other states in addressing greenhouse gases still have some of the easier steps at their disposal.

"Some states that have been overly reliant on coal will likely diversify to a wider range of cleaner energy resources and they'll have time to come up with a plan and do that," said Dan Bakal, director of electric power at Ceres, a sustainability advocacy group.

For example, Indiana is not among the 30 states that require utilities to generate a certain share of power from renewable sources like solar and wind. Instead, Indiana offers financial incentives to utilities for using what the state defines as clean energy sources. That includes sources not traditionally considered renewable, such as replacing coal with natural gas.

Indiana generates about 3 percent of its electricity from renewable sources. Nationally, about 12 percent of electricity comes from renewable sources. The EPA estimates Indiana could hit 7 percent by 2030.

About half of states also have energy efficiency programs.

But Indiana state lawmakers voted this year to stop a two-year-old program designed to cut energy consumption in Indiana homes, schools and businesses. The Energizing Indiana program, which will shut down in December, is funded by a fee on electricity bills. The funds pay for energy audits and weatherization programs, and provide energy-saving light bulbs and other energy-saving measures.

The program was intended to reduce statewide consumption by 2 percent a year through 2019, but utilities and manufacturers said it was too expensive and the benefits questionable.

Indiana, home to many energy-intensive manufacturers such as steelmakers and metal foundries, ranks 9th in per capita energy consumption.

The Indiana Chamber of Commerce and the Indiana Manufacturers Association are part of a national coalition of business interests trying to stop the proposed regulations.

Indiana Department of Environmental Management (IDEM) Commissioner Tom Easterly has been meeting with officials from other states to strategize on fighting the rules.

Jesse Kharbanda, executive director of the Hoosier Environmental Council, said Pence's claim that the rules will dramatically raise electricity rates is untrue.

"We're troubled that the governor, rather than embracing the opportunity to accelerate positive change in Indiana's electricity market, has resorted to fear mongering," he said.

The EPA estimates the rule would lead to about a 3 percent increase in electricity rates nationwide by 2030. But consumers' monthly bills could be unchanged, or even lower, through energy efficiency programs.

A federal advisory committee said in a report released last month that global warming is already damaging every region of the country and problems will increase.

Effects in the Midwest include more intense heat waves, more humidity and worse air quality. More extreme rainfalls will cause erosion and affect water quality, according to the National Climate Assessment report. The Great Lakes will see more invasive species, more algae blooms, and the quality of beaches will be degraded.

Pence's Office of State-Based Initiatives said in a report this year that the federal government is overestimating the cost of extreme weather events and underestimates the benefits of higher carbon dioxide levels, such as greater crop yields.

The National Climate Assessment report said climate change will bring longer growing seasons that will increase the yields of some crops. But those benefits will be largely offset by extreme weather, causing agriculture production to decrease in the long term.

"Strong carbon standards are a necessary part of the fight to stop runaway climate change," said Wendy Bredhold, Indiana field organizer for Moms Clean Air Force, an advocacy group. "I am worried sick for my daughter's future and the planet she will inherit. Every parent should be."

The draft environmental rule, a top domestic goal of the administration, is the centerpiece of Obama's climate change initiative. Power plants are the single largest source of greenhouse gas emissions in the U.S., generating about 38 percent of heat-trapping gases.

The House passed a bill in 2009 to limit carbon dioxide emissions —- which won the backing of only two of Indiana's federal lawmakers — but it died in the Senate.

Obama is now taking executive action. He's backed by a 2007 Supreme Court ruling that the EPA has the authority to regulate greenhouse gases under the Clean Air Act, as it does other pollutants, if it determines they're a threat to public health and welfare.

The EPA did that in 2009. Since then, it has limited carbon pollution from new vehicles by increasing fuel efficiency requirements. And it is in the process of finalizing emissions rules for future power plants. Those rules would essentially prevent the building of new coal-fired power plants unless they use carbon capture and storage, a technology still in its infancy.

The EPA is taking a more flexible approach for the nation's existing power plants.

But the rules are still likely to be challenged in court after they become final. That's expected to happen by next June, after the EPA takes public comments and makes any revisions.

Even if the rules are enacted, critics say the emissions reductions will have little effect on global carbon pollution. Supporters say other countries — particularly China, the top emitter — are waiting to see what the United States does before taking action.

Some in Indiana also question whether human activities like driving cars and burning fossil fuels for power are harming the climate.

Pence said on MSNBC in February that he doesn't know if science has resolved the issue of whether climate change is manmade.

"We'll leave the scientific debates for the future," Pence said.

Keith Baugues, the IDEM assistant commissioner in charge of cleaning up the state's air, said earlier this year that he's a "skeptic on global warming."

GOP Rep. Larry Bucshon, who sits on the House science committee and represents southwestern Indiana, where most of the state's coal has come from, has said climate changes have been minimally affected by human activities.

The National Academy of Sciences found that at least 97 percent of climate researchers who actively publish in the field agree that climate-warming trends over the past century are very likely due to human activities.

Polls show that Americans favor restricting carbon dioxide emissions from power plants, but dealing with global warming has not ranked high on the issues the public wants Washington to address.

Contact Maureen Groppe at mgroppe@gannett.com or on Twitter: @mgroppe.