The effects of President Obama's climate change agenda on rising energy prices are expected to be front-and-center as the federal government's premier analytical arm begins its annual conference in Washington on Monday.
The Energy Information Administration's annual energy conference is used to underscore the release of its Annual Energy Outlook, detailing the federal government's projections from now until mid-century. It also brings together leaders from the energy industry and the administration to discuss the changing energy landscape.
This year's conference comes amid a major climate change battle making its way through the courts over whether the Environmental Protection Agency has the authority to force states to regulate carbon dioxide from power plants to combat climate change.
The EIA has not been sympathetic to the EPA's Clean Power Plan, especially when it comes to the cost of the rules. The EIA is an independent agency and seeks to be impartial when it comes to analyzing the impact of any policy or regulation. Its latest energy outlook provides the first federal analysis of the EPA climate plan since it was finalized last year.
The Clean Power Plan places states on the hook to reduce greenhouse gas emission a third by 2030. EIA says in addition to a major restructuring of power resources, primarily from the closing of coal plants, the Clean Power Plan may cause electricity costs to rise 1-5 percent, according to its annual outlook. The full outlook is slated to be released July 21.
"Retail electricity prices are higher when the [power plan] is in place than when it is not, as the fuel and capital costs of complying with the rule by shifting to natural gas-fired generation, or by building new renewable capacity, are passed through to retail prices," the EIA analysis, updated last month, said.
The agency also said electricity prices continue to be 3 percent higher on average in two case scenarios after 2030 compared to no plan being implemented. However, a reference case scenario does show electric prices dropping by 2030, pegged to the lower price of natural gas.
More than two dozen states are suing EPA over the Clean Power Plan. Some observers say EIA's analysis of the climate plan hasn't done EPA any favors, as states use the cost analysis to justify their arguments against the regulation.
Others have differing views.
Consultants with the group Synapse said earlier this year that the percentage increases in electricity prices detailed by the EIA analysis are limited to electricity. But the EIA also assumes electricity providers purchase emissions allowances in some scenarios and use them as a rebate to ratepayers. "As a result, the full effect on out-of-pocket spending on electricity by ratepayers is lower than 3 percent, or even zero" after 2030, it said.
The Supreme Court in February halted the climate plan until litigation has made it through the courts. Oral arguments on the climate plan are slated to proceed in federal appeals court on Sept. 27.
The first day of the EIA conference, held July 11-12, will address the court fight, with a panel discussion called the "Clean Power Plan: EIA, EPA and state and regional perspectives." The agenda refers to the Supreme Court stay in describing the list of issues affecting the climate rule. The agency will discuss its analysis of the Clean Power Plan as well as several alternatives to the rule.
The panel will hear from EPA chief counsel Joseph Goffman and EIA's senior analyst Thaddeus Huetteman. Michael Tubman from the group Center for Climate and Energy Solutions also will be on the panel.
The energy conference's other core theme will be the impact of low petroleum prices on U.S. oil and gas production. While cheap gasoline has been a boon for consumers, the industry has suffered major job losses due to the ongoing oil supply glut.
The shale oil boom has turned the U.S. into an energy powerhouse in just a few years. But with that boom came a gusher of increased supply that pushed more oil onto the market than it could absorb, driving down prices.
It didn't help that the Saudis kept their production high in an effort to snuff out the U.S. shale-oil upstarts. Oil prices are struggling to rise, but many analysts believe it will be some time before they rise high enough to justify hiring back the hundreds of thousands of workers who have been let go.
The energy conference will devote a significant portion of the conference to addressing demand for U.S. fossil fuels in the wake of low oil prices.
One session on oil supply factors "will focus on the role of technological advances in dramatically lowering development costs in shale plays," EIA said. "Lower oil prices are affecting investment and production decisions across the industry, which could create capacity constraints in the midterm. Geopolitical forces further complicate the timing of investment decisions and market prices."
It also will feature a discussion on the role of U.S. liquefied natural gas exports in the global market.
Underscoring the increased role of oil and natural gas, the conference will be opened with a keynote address by Gregory Goff, president and CEO of independent refiner Tesoro. The company is one of the nation's top refiners focused on selling a range of fuel products primarily in the western U.S., including the regulation-heavy state of California.
California Attorney General Kamala Harris is investigating Tesoro and other refiners that supply the Golden State over alleged market manipulation. California has some of the highest fuel prices in the country. Harris issued subpoenas to Tesoro, Exxon Mobil and Chevron in late May, directing them to hand over all documents related to trading, maintenance and repairs performed by the companies since 2014.
Harris is also part of a group of Democratic attorneys general targeting Exxon over its climate change data. A number of the AGs involved in the investigation have subpoenaed the company directly, asking it to turn over years of documents related to climate change.
The AGs' investigation is based on a series of news articles that reported that Exxon covered up data from its own scientists showing the company faced significant risks from global warming.
Many scientists blame greenhouse gas emissions from the burning of fossil fuels for warming the Earth, causing more severe weather, flooding and drought.