By Jeff Plungis & Mark Drajem
via Bloomberg Business
The benefits of cheap oil may come at a steep price for President Barack Obama’s climate-change initiatives.
Some of Obama’s most cherished achievements — cars on the road that burn less gasoline, reductions in greenhouse gases and a plan to cut emissions from power plants — are at risk as plummeting energy prices thwart policies meant to force the nation to think greener.
Last year’s 33 percent drop in gasoline prices already has automakers laying the groundwork to challenge more stringent fuel economy targets for new cars. The oil industry says a decline in its oil revenue means it can’t afford new climate regulations. Even solar-equipment makers are seeing share prices fall on fears inexpensive natural gas will erode demand.
“We are awash in cheap fossil fuels in a way that was unimaginable five years ago,” said Michael Greenstone, an economics professor at the University of Chicago who was once the chief economist for Obama’s Council of Economic Advisers. “That’s going to make the president’s climate plan — and anyone’s climate plan — more difficult to achieve.”
Data show consumers gravitating back to the pickup trucks, minivans and sport utility vehicles they shunned when gasoline was $3 or more a gallon. Automakers had been counting on sustained demand for fuel-efficient cars such as hybrid and electric models to meet Obama’s mandate for a nationwide average fuel economy of 54.5 miles per gallon.