Your Move on Keystone, Mr. President

 | Mar 04, 2013 | 2:00 PM EST
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Lots of energy news to tackle at the start of this week, so let's get into it and see if it will affect our investments.

The Keystone XL pipeline, which was proposed to bring more tar sands from the Canadian Athabasca down to the Gulf Coast, got a boost on Friday as the State Department released its revised impact report, concluding that the environmental and climate change impacts are in fact manageable. This twice-delayed report now will make it very difficult for President Obama to deny approval of the pipeline when his decision is due, near the end of this month.

One option the president has is to further kick the decision down the calendar, calling for more study, but that would be a difficult dodge to justify. Much more likely is that the president will approve Keystone and give his environmental supporters some other concessions to ease the blow. He might accelerate more stringent Corporate Average Fuel Economy (CAFÉ) requirements, move to apply new plant emissions standards more quickly to existing plants or even significantly slow drilling permits in the newly opened Arctic. If he embraces further stiffening of plant emission standards, look for coal stocks to plummet further.

Two new nominees for Secretary of Energy and for Commissioner of the Environmental Protection Agency were released this morning, and both represent a "same old, same old" posture in Washington. Ernest Moniz from MIT is not a Nobel Prize winner like outgoing Secretary Steven Chu, but he's damn close -- brilliant, world-renowned and profusely published. He'll likely deliver the same kind of "all of the above" energy policy talking points as his predecessor, including a stronger advocacy of fracking for natural gas, even though the Energy Department is more closely engaged in nuclear energy and the safety of our nuclear arsenal than in anything consumer based.

For that, we have Gina McCarthy taking over for Lisa Jackson at the head of the EPA. McCarthy is again a very close substitute for the outgoing Jackson, and the oil and gas industry and particularly the coal industry will get very few breaks in the writing of national fracking regulations and emission standards for both new and currently operating power plants.

The BP (BP) trial is beginning, and it will test the line of how much money can ever compensate for incompetence, the death of workers and the risk of environmental Armageddon. It will also test the line where legitimate compensation morphs into vindictive retaliation -- BP has paid out close to $18 billion already and could be on the line in this trial for another possible $20 billion. Is the possible financial destruction of the company the proper punishment for Deepwater Horizon?

Finally, a real carbon tax bill is floating around in the Senate. It is an awful bill, and I could write a better one. It has no chance of passage. But it is also the first salvo in what is an inevitable step toward a renewable and sustainable energy profile here in the U.S., and it bears watching.

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