The current high cost of energy, particularly natural gas, andthe continuing energy crisis in California prompted President BushMonday to retract an earlier promise to press for restrictions incarbon dioxide (CO2) emissions from power generation. Curbing CO2emissions would boost demand for natural gas at the expense ofother dirtier fuels, particularly coal and oil.

CO2 reductions were one of Bush’s campaign promises and had beenpromoted recently by Environmental Protection Agency AdministratorChristine Todd Whitman. In recent testimony before a Senatesubcommittee and in other recent statements, Whitman advocated theregulation of carbon dioxide under the Clean Air Act. In hertestimony, she called for “putting [carbon dioxide] into theprocess and recognizing that we have to deal with it, which wouldbe to put a cap of some sort, a target anyway.”

That opinion prompted a letter to Bush last week from Sens.Chuck Hagel (R-NE), Jesse Helms (R-NC), Larry Craig (R-ID), and PatRoberts (R-KS). The senators urged the president to consider theopinions of some prominent scientists who say CO2 emissions areless harmful than other gases and particulates.

But Bush focused on the current energy situation in his responseto the senators this week. He said he intends to work with Congresson a multipollutant strategy to “require power plants to reduceemissions of sulfur dioxide, nitrogen oxides and mercury. Any suchstrategy would include phasing in reductions over a reasonableperiod of time, providing regulatory certainty and offeringmarket-based incentives to help industry meet the targets. I do notbelieve, however, that the government should impose on power plantsmandatory emissions reductions for carbon dioxide, which is not a’pollutant’ under the Clean Air Act,” said Bush.

He cited recent analysis from the Department of Energyindicating that greater restrictions on CO2 would lead to “an evenmore dramatic shift from coal to natural gas for electric powergeneration and significantly higher electricity prices compared toscenarios in which only sulfur dioxide and nitrogen oxides werereduced. This is important new information that warrants areevaluation, especially at a time of rising energy prices and aserious energy shortage.”

Bush added that while California and other western states areconcerned about price volatility and energy shortages this summer”we must be very careful not to take action that could harmconsumers,” particularly when there is incomplete scientific proofthat such restrictions would improve climate conditions.

His apparent reversal on CO2 was sharply criticized by Democratsand environmentalists, and the president was accused to caving intodemands from special interests. However, John Sharp of the NaturalGas Supply Association said the decision was a rational one giventhe current energy market.

“We encourage fuel diversity especially given some kind ofshort-term energy crisis,” said Sharp. I think President Bush’smeasure is a rational one given the fact that there is a strongdemand for natural gas. The facts have changed in the market sincethe debates during the campaign,” said Sharp, noting the Californiaenergy crisis has worsened. “As a consequence, I think he is morethan entitled to change his position on it. I think he is doing itto respond to current market needs.”

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