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The Final Word by Chuck Swann
The big news on the energy front this week was the US Supreme Court's issuance of a temporary stay on President Obama's effort to combat global warning by regulating carbon emissions from coal-fired power plants. This was the first time ever that the court has blocked a regulation before it was reviewed by an appeals court. The five-to-four vote by the justices is a hint that the whole quinella could face a skeptical hearing by the conservative majority (five to four) on the court when it wends its way through the appeals process and finally comes before them for a live-or-die decision.

What does it mean to the pulp and paper industry? If the president's plan stands, those mills that purchase lots of power from electrical utilities--probably most mills--could face an uncertain future both in terms of price and availability, as power companies scramble to replace coal with natural gas, solar and wind generation. Mills that locally burn coal for their own energy needs will inevitably experience a trickle-down effect from regulation of coal burning. Regulation will crunch the big guys first, and then the little fellows. Count on it. Mills will also step up their burning of biomass--bark and forest residuals--which the American Forest & Paper Association and its American Wood Council are lobbying for Environmental Protection Agency approval.

To sum up, the federal regulation being challenged requires states to make big-time cuts in the greenhouse gases resulting from coal burning by electric power plants. The administration's plan would transform the entire nation's electricity system by cutting power plant emissions by one-third by 2030 from a 2005 baseline. Hundreds of coal-fired electricity plants would have to be closed or converted to natural gas and many electricity companies will have to go big-time into solar and wind power. The first deadline for emissions reductions is in 2022, with full compliance by 2030.

The White House said in a statement that it fully expects to prevail in the long run and in the short run will continue to take steps to make progress in reducing carbon emissions. Stay tuned.

Chuck Swann is the senior editor of Paperitalo Publications. He can be reached by email at chuck.swann@taii.com.

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