Dealing with carbon dioxide (CO2) and other greenhouse gas (GHG) emissions and their part in global climate change is one of the great challenges facing the world order, said Exelon CEO John W. Rowe.
"Mark Twain observed over a century ago that everybody talks about the weather and nobody ever does anything about it," Rowe said. "Well, I think it's time we all accepted responsibility for doing something about the weather because we're doing something about it whether we like it or not."
Speaking at the Brookings Institution in Washington, DC Feb. 12, Rowe said that regardless of who wins the presidential election in November, "climate legislation should be an imperative in the first hundred days of any new administration." ConocoPhillips CEO Jim Mulva made similar remarks last week (see related story).
"We think bipartisan legislation is possible and could be done soon," Rowe said, pointing to congressional attempts to reduce U.S. GHG emissions, including a bill sponsored by Sens. John Warner (R-VA) and Joseph Lieberman (I-CT) (see NGI, Dec. 10, 2007), and a previous iteration by Sens. Jeff Bingaman (D-NM) and Arlen Specter (R-PA) as examples of across-the-aisle efforts to meet growing energy needs in an environmentally responsible manner. An energy bill signed into law by President Bush in December focused on conserving energy and the production of renewable fuels as opposed to the development of traditional oil and natural gas resources -- but dropped a $21.8 billion tax package and a renewable fuels electricity mandate which had been included in previous versions (see NGI, Dec. 24, 2007).
"They should move because time is not our friend," Rowe said. "It is going to take a very long journey to deal with carbon...the usual Washington approach, doing too much too late, simply won't work. We have to start soon and decisively.
"It also won't work to adopt extravagant 30-year goals and then do nothing in the early years to achieve them. We must actually do something."
Rowe said dealing with the challenge will require a comprehensive government policy -- such as the cap-and-trade system included in the Warner/Lieberman bill -- including an allowance system to protect consumers against economic windfalls, more stringent energy efficiency standards and investments in research and development related to renewables and carbon sequestration, tax incentives, loan guarantees for nuclear plants and a repository for spent nuclear fuel; effective and highly competitive market places; and a proactive approach by the energy industry.
"Natural gas remains the principal bridge to a lower carbon future" for the electricity sector, Rowe said. "But the domestic supplies have plateaued; prices are volatile; keeping prices within a realm of reason requires more liquid natural gas that needs new facilities and means that the U.S. gas market will ever more be dependent on world prices."
Businesses "need not and should not wait for a new president" to address carbon emissions, Rowe said. Exelon's own plans could reduce its effective carbon footprint by 12-15 million tons of GHG emissions at an incremental cost of 2.2 cents/kWh in a competitive market; a less broad definition of the ways in which businesses may reduce carbon emissions or the abandonment of competitive markets could drive the cost up to 6.7 cents/kWh, Rowe said.
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