The U.S. Supreme Court’s order this week halting implementation of the Obama administration’s Clean Power Plan (CPP), quickly sent news outlets scrambling to gauge potential impacts. The New York Times:

Here’s Bloomberg:

And InsideClimate News:

The consensus: Putting the CPP on ice could put a dent in the administration’s strategy to combat warming – with other nations worried that America  could fall short of its obligations under last fall’s climate agreement in Paris. As concerning:  U.S. emissions policy is hitting a brick wall. The Times:

“[T]he Supreme Court’s decision ensures that climate policy will not be set on Mr. Obama’s watch. A Federal District Court will hear oral arguments on the climate rule June 2 and is expected to issue its decision later this year, but an appeal to the Supreme Court is all but certain. If the justices agree to hear the case, a ruling is unlikely before June 2017.”

But wait. What if we had a market-based approach for reducing carbon dioxide emissions – gifted to the United States because of its unique combination of abundant energy resources, technological advances and know-how – that not only would yield CO2 reductions at world-leading levels but also would strengthen our economy and security? And at potentially less cost than the mandates under the CPP?

OK, it wasn’t an altogether serious question, because that approach and the progress it has generated actually exist. Progress on emissions and energy has come from America’s ongoing energy revolution, a renaissance fueled by vast shale reserves and driven by safe hydraulic fracturing and advanced horizontal drilling.

We’ve discussed the energy revolution’s impacts on domestic oil and natural gas production, which has pushed the United States into the world lead in oil and gas production. This has made the U.S. stronger economically, more energy self-sufficient and more secure in the world.

Meanwhile, increased use of natural gas domestically – in addition to lowering energy costs for consumers – has played a significant role in reducing emissions of energy-related CO2:

Above, using U.S. Energy Information Administration (EIA) data, we see a decline in emissions after 2007, indicated by the blue line. The orange line climbing higher shows where EIA’s 2006 forecast projected emissions would go. The area between the two is U.S. emissions progress. It’s substantial, it’s growing and it should command more attention from those in the U.S. and the world leading climate efforts. Marty Durbin, API executive director for market development, during a recent briefing with reporters:

“If you actually want the outcome of reducing emissions across the board, doing it in a way that doesn’t harm the economy and does it in concert with other options like renewables … there’s a pretty good answer here.”

It’s natural gas: cleaner-burning, abundant and reliable. Thanks largely to surging domestic production and use – the United States is positioned to be an exporter of liquefied natural gas instead of needing to import it – America leads the top economies of the world in reducing carbon emissions from energy:

We’re second to none in reducing emissions – not because of a government program or mandates, but because the marketplace is leading the way. Durbin told reporters that when more realistic assumptions about the abundance of natural gas supply are used, modeling shows a market-based approach with gas achieves a 30 percent reduction below 2005 emissions levels in 2030. This compares to EPA assertions, using the agency’s assumptions about gas supply, that when the CPP is fully in place in 2030, “carbon pollution from the power sector will be 32 percent below 2005 levels …” Amy Farrell, API senior director for market development:

“We did a lot of modeling (looking at) compliance options under EPA’s Clean Power Plan … [I]t did give us a snapshot and an insight that if you have a plan, what are the relative costs (of letting) the market dictate (compliance) versus if you impose mandates. … When you look at the different pathways … if you were to compare the cost under each of those now-hypothetical compliance pathways … letting (the market) solve for the lowest-cost compliance, the system costs every single time were lower versus when you tried to mandate energy efficiency or where you tried to mandate renewables.”

The good news here is that this market-based approach is doable – it’s already working. Durbin said 2016 might see the first full year in which natural gas produces more U.S. electricity than coal. There’s resource abundance and excess capacity. Durbin:

“There’s a lot of room here for being able to bring more gas into the system, to continue to see emission reductions, and to do so in a way that isn’t going to see prices rise appreciably, either. The abundance of gas is – we don’t know how much we have. … Almost any demand that we see coming online … industry has shown they’re going to be able to meet that demand.”

Unfortunately, our emissions progress could be at risk in policy and regulatory approaches that hinder safe development – additional, unnecessary federal regulatory layers, restricted access to reserves on federal lands, government red tape or policies and politics that inhibit infrastructure development. Durbin:

“If you’re going to start putting more and more obstacles in front of continued production of natural gas, you’re not going to be able to meet the emission reductions targets. There are some extreme elements that want to stop all fossil fuels, but you can’t get there – on your environmental goals – if you don’t allow for continued robust production of natural gas here in the U.S.”

As the headlines and stories above suggest, there’s a lot of conversation going on about what comes next after the Supreme Court’s CPP stay. That conversation should include the progress the United States already has realized thanks to its energy revolution and increased use of the natural gas produced by that revolution. Farrell:

“If you want emissions reductions, the best thing you can do is not get in the way of gas production.”

By Mark Green 

Originally posted February 12, 2016

Energy Tomorrow is brought to you by the American Petroleum Institute (API), which is the only national trade association that represents all aspects of America’s oil and natural gas industry. Our more than 500 corporate members, from the largest major oil company to the smallest of independents, come from all segments of the industry. They are producers, refiners, suppliers, pipeline operators and marine transporters, as well as service and supply companies that support all segments of the industry.