The official confirmation of Scott Pruitt to lead the Environmental Protection Agency has implications across the business board, with the fossil fuel companies generally favoring his ideas while the hi-tech giants are opposing them.
Generally speaking, President Trump believes in more unfettered access to the nation’s natural resources while both Trump and Pruitt are skeptical of prevailing climate science that concludes it is human induced. Business can therefore expect to see an abundance of domestically produced coal, natural gas and oil eventually come to market.
And while that may typically mean lower prices and more competitive operations, in this case, it won’t have that effect right away. That’s because the country is awash in oil and natural gas and it is just now recovering slumping prices that dealt a huge blow to each sector. Now that supply and demand are beginning to line up, it would make little sense for developers to saturate the market and depress prices, again.
“The wheels to change policy take time,” says Rob Barnett, analyst with Bloomberg Intelligence. “Reversing direction is a different matter altogether.”
The coal sector, meanwhile, may see a reprieve given that utilities have been retiring their older units to conform to carbon regulations. But under the Trump and Pruitt regimes, some of those older coal plants have more life in them — and many could have decades longer, if they invested in some tools to cut down their toxic emissions. That would certainly mean lower electric prices for commercial and industrial enterprises. But it would also mean much more carbon releases.
To that end, Environmental Leader has previously reported that Trump now plans to introduce more executive orders, and some of which are designed to keep older coal plants alive. And Pruitt, as it known by now, has sued the EPA 14 times and had been the lead attorney to knock down the carbon-cutting Clean Power Plan.
As the head of EPA, he now says that these decisions are best left to the states that are closer to the issues-at-hand than is the federal regulator. The problem there, however, is that the states that are heavily dependent on coal, natural gas and oil are often extensions of the industry that they are supposed to regulate. Moreover, industrial emissions drift outside of state boundaries.
So what it comes down to is whether business benefits more from lower prices or a better climate? And that is not a fair question, given that commercial and industrials have benefited from the coal-to-gas exchange that has both cut carbon emissions while keeping electricity prices low.
To that end, 365 brand name companies are on board with carbon rules designed to mitigate the effects of climate change. The businesses include General Mills, DuPont Loreal, Nike, Hewlett Packard and Kellogg.
Even Lakshmi Mittal, who is the chief executive of ArcelorMittal, the world’s biggest steelmaker, is in favor of a carbon tax, the Economist reports. The steel industry is a major contributor of carbon and is responsible for 5% of the world’s global emissions.
And the oil industry, which is so central to the Oklahoma economy that Pruitt had represented as his state’s attorney general, has given its tacit approval to pricing carbon as a way to cut emissions. BP, ExxonMobil, Royal Dutch Shell and StatOil have said that they don’t generally advocate for taxes but they think that such a measure would be more efficient than a patchwork of international laws. Moreover, they have major investments in natural gas, which is expected to continue to be the fastest growing fuel in the United States.
Furthermore, Microsoft Founder Bill Gates has developed the so-called Breakthrough Energy Venture that is designed to meet those longer term technical challenges. And according to its board, if the technologies to which they invest can reduce emissions, the financial returns will follow.
It’s a $1 billion fund that will look out 20 years. It has a lofty goal of reducing greenhouse gas emissions by a half-gigaton a year.
One of the aims of that fund is to invest a few million on promising technologies to essentially test the waters. As Gates says, this is more doable when it comes to things like energy storage but it is less feasible when it comes to more complex undertakings such as nuclear fission and fusion.
“We are more limited by the number of companies there are than the funds we have available,” says Gates. “We feel good that if we have the ideas available, we can get the money.”
Meantime, America’s Internet dynamos have pledged to consume nearly all of their electricity from sustainable sources. Apple, Amazon, Google Intel and Microsoft are committed to the cause and each has expressed its views to the current White House. Collectively, they own more than 50 data centers in 12 states.
To top it off, carbon emissions in the United States are generally falling. The EPA reports they dropped 2.2% between 2014 and 2015. More broadly, the nation’s greenhouse gas emissions are roughly 9% below 2005 levels.
The federal government is thus in a position to either facilitate the progress or to block it. The good news is that the country is cutting its carbon emissions while it is also realizing an economic expansion. And that’s in the best interest of everyone and notably big business.