The Future of Energy Part One -- Emissions Regulation: A New Era Dawns

IndustryWeek (Alpern) - Whether by the hands of Congress or the EPA, regulations on carbon emissions loom in the near future. Here's how U.S. industry is mobilizing.

Not all corporations have the resources to create entire departments in charge of overseeing emissions regulation compliance. For some medium-sized companies that emit enough greenhouse gases to qualify for oversight, new regulations pose a significant threat. "Manufacturers are always concerned about the nature of regulation because it can fundamentally alter the way they do business," says Ethan Cohen, a senior manager in application services at Hewlett-Packard. "But on the opposite side of the coin is that altering the way you do business can often produce real benefits."


One of the first significant steps toward emissions regulations arrived on Jan. 1, when the Environmental Protection Agency began a national registry that requires large emitters of heat-trapping gases to collect their greenhouse-gas data. The information from those reports will be released in 2011 publicly. Businesses that emit at least 25,000 metric tons of greenhouse gases per year would have to participate, which is expected to encompass about 10,000 facilities.

Emissions registry has been anticipated for some time, and some of the largest emitters in the United States have been tracking their energy usage for years, including such corporations as Hewlett-Packard, Boeing and Duke Energy. IBM has emissions data dating back to 1990 and has been publishing reports on it for the last 15 years with the Energy Department. "The registry shouldn't be hugely onerous at all," says Victor Flatt, professor of environmental law at the University of North Carolina Chapel Hill School of Law. "These facilities are already regulated, they already have to do reports (for other regulations), and the calculation of carbon dioxide release is not very complicated."

One of the primary points of contention within industry is that dealing with climate change will almost certainly hurt some industries, while enriching others. Billions of dollars are at stake. Depending on how regulations are implemented, electricity bills in some states could rise significantly, as well as the price for gasoline. For energy-intensive industries, such as chemical production and metal processing, those cost spikes could prove devastating. Petroleum and natural gas, as a feedstock, represents a significant proportion of the chemical industry's costs. Feedstock accounted for 70% of the chemical industry's $85.1 billion in total energy costs in 2008, according to the American Chemistry Council.