On June 25th, Obama outlined a national climate change policy – and the first comprehensive framework discussed by any president – for the United States. His first term largely focused on transport; now he’s intent to target the power sector. Will his policy goals limit or endorse fracking?
Short answer: Unless individual states dictate otherwise, Obama’s new policy will likely encourage more fracking.
Natural gas – a policy imperative?
Targets were emphatically introduced during the speech, such as reducing emissions by 17% from their 2005 levels, the federal government’s plan to consume 20% of its electricity using renewable energy resources over the next 7 years, and the installation of 3 gigawatts of renewable power units on defense bases that would otherwise burn millions of tons of coal. The significance? Obama intends to accomplish these feats in part by explicitly embracing the U.S shale gas boom. He even characterized U.S domestic natural gas reserves as the “transition fuel”. Citing job creation and his own confidence in making drilling safer and cleaner, Obama aims to see gas production increase to tackle expensive heating and power bills paid by American households. These applications will be combined with raised efficiency standards for vehicles and appliances.
Perhaps the most poignant aspect of climate policy speech was when Obama confirmed his intent to bypass Congress and use the EPA to roll out executive actions to address carbon emissions and pollution. In other words, if Congress remains addled by legislative deadlock on the matter, Obama will issue an executive memo to create rules to curb emissions from power plants and compel coal-burning facilities to use natural gas instead. Substantial cuts in emissions and rules for coal-burning plants will not likely be put in effect until Obama leaves office – but they are to be proposed by June 2014 and finalized the following summer. It seems logical that an increase in U.S natural gas production, made feasible by hydraulic fracturing technology, is what will surely buoy this strategy – and a considerable chunk of Obama’s climate change policy initiatives. Cuts in coal and other fossil fuels will necessarily require ample revenue support from natural gas production and export.
Environmentalists and anti-frack groups may be disappointed. While Obama is sternly leaving it to oil & gas to develop the shale reserves without federal government subsidies (in fact, Obama intends to extinguish all remaining tax benefits for the industry), and while he does seem serious about greater U.S cooperation in international climate change talks, on the other hand he looks likely to approve the Keystone Pipeline project – an issue nearly if not more contentious than fracking. But the take-away in terms of future regulations, endorsement, or restrictions on hydraulic fracturing is this: Obama is down with the shale gas revolution. By corollary, he’s probably down with fracking too.