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Obama Speech Falls Short of Industry Expectations

President Obama's speech to the nation's top business leaders last Wednesday fell short of expectations that it would unveil incentives to encourage coal-burning power generation facilities to switch to natural gas.

In fact, the president's address to the Business Roundtable in Washington, DC, which includes the CEOs of many oil and gas producers and electricity companies, was devoid of any mention of the words "natural gas." Energy analysts, some industry members and reporters had expected natural gas incentives to be a central part of the speech.

Immediately following Obama's remarks, three major natural gas producer and pipeline associations called on the Obama administration and Congress to make room for gas in a "clean energy standard" proposal. A "clean energy" mandate proposed by Sen. Lindsey Graham (R-SC) in late February included nuclear energy and clean coal, but not natural gas.

"Leaving natural gas out of any clean energy standard is like sending the U.S. hockey team to the Olympics without their skates," said R. Skip Horvath, president of the Natural Gas Supply Association.

"It's time for policymakers to recognize the new domestic supply reality for natural gas," agreed Donald F. Santa, president of the Interstate Natural Gas Association of America. "To get an idea of just how significantly natural gas could contribute to meeting clean energy goals in the near term, the Congressional Research Services calculated that carbon emissions could be reduced by 20% simply by making full use of existing natural gas [generation] plants that are currently under used," he noted.

"Expanded use of natural gas plants to make electricity would not only cut emissions, but also would create thousands of new jobs in the businesses that produce and supply the nation's natural gas," said Barry Russell, president of the Independent Petroleum Association of America (IPAA).

IPAA leaders are expected to descend on Washington this week to meet with Congress and administration officials to "bring natural gas into the debate," said IPAA spokesman Jeff Eshelman.

In his address to business leaders, Obama called for a price on carbon pollution to "truly transition" to a clean energy economy. "Many businesses have embraced this approach -- including some here today. Still I am sympathetic to those companies that face significant transition costs, and I want to work with organizations like this to help with those costs and get our policies right.

"What we can't do is stand still. The only certainty of the status quo is that the price and supply of oil will become increasingly volatile; that the use of fossil fuels will wreak havoc on weather patterns and air quality. But if we decide now that we're putting a price on this pollution in a few years, it will give businesses the certainty of knowing they have time to plan and transition," the president said.

"This country has to move towards a clean energy economy. That's where the world is going. And that's how America will remain competitive and strong in the 21st century."

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