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COGA Participants Urged to Join Climate Change Debate

The natural gas industry can play a key role in solving the world's climate change puzzle, but time is running out for the industry to step into the breech, according to Tim Wirth, president of the United Nations Foundation and a former U.S. senator from Colorado.

"The time has come for the natural gas industry to get organized, take the gloves off, and get thoroughly engaged in helping our country advance rapidly toward a low-carbon economy," Wirth said at a Colorado Oil & Gas Association (COGA) conference in Denver last week.

"You have huge supply, you have low demand; good government policy will go a long way to putting a sound base under the industry. You can help form that policy, or you can stay in the wilderness...I would argue with anyone at any time that this industry has more to gain, and a greater contribution to make, than any other industry in America or, for that matter, in the world."

The industry missed a golden opportunity to help shape climate change policy and protect its own interests during debate of the House climate change and energy bill (HR 2454), he said.

The 1,200-page bill, which cleared the House by 219-212 last month, seeks to cap heat-trapping greenhouse gas (GHG) emissions that contribute to global warming (see NGI, June 29). The legislation would substantially change the direction of the energy industry from conventional oil and natural gas to renewable fuels.

"Every industry was deeply engaged except one -- yours," Wirth said. "The natural gas industry -- the industry with the most to gain and the most to offer -- was largely not at the bargaining table."

Coal, utilities, agriculture, solar, wind and the auto industry could all benefit from the energy policies, tax incentives, regulatory requirements and national standards included in the legislation. Natural gas was overlooked because the industry was absent from the debate, Wirth said.

"A senior committee staffer told me that 'no coherent argument came together. The industry seemed atomized.' The natural gas industry missed the biggest national commitment to generate a host of new energy jobs, to move toward a low-carbon economy, to sharply grow the industry and become a major player in the future of energy policy."

The House measure, which calls for GHG emissions to be cut by 83% by 2050, is backed by President Obama. The vote was a setback for Republicans and the oil and natural gas industry. There is more support for climate change from the electric power sector. It establishes a renewable energy standard that would require 20% of an electric supplier's electricity to be generated from renewable fuels by 2020, and it calls for significant investment in renewable energy.

The centerpiece of the climate change legislation is a system that would set a cap on carbon emissions and allow polluting industries to purchase and trade emission credits to comply with the cap. The bill would allocate approximately 85% of emission credit allowances for free to affected industries -- natural gas distributors, electricity distributors, energy-intensive manufacturers (i.e. steel, aluminum, paper and chemicals), automakers and refiners -- to offset the costs during a transition to a lower carbon environment (see NGI, May 25).

The natural gas industry still has a chance to recoup its losses as the debate moves to the Senate, Wirth said.

"A cadre of Senate champions must be recruited to carry the banner for cleaner fuels and this domestic industry," he said. "Not just traditional supporters but additional states with new discoveries of unconventional gas have significant interests that must be heard."

The industry must also decide on its two or three biggest legislative priorities and "get its regulatory house in order, from the Federal Energy Regulatory Commission to Treasury to the Department of Energy," according to Wirth.

Wirth was a member of the House from 1975 to 1987 and was elected to the Senate in 1986. He was Under Secretary of State for Global Affairs during the Clinton administration and has served as head of the United Nations Foundation since 1998.

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