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Paris Accord Pullout May Have Muted Effect in Arkansas

4 min read

President Donald J. Trump’s decision to withdraw from the Paris climate accord on Thursday drew support and criticism from predictable quarters, with Arkansas’ Republican congressional delegation and governor expressing support for the president while Democrats and many national business leaders vented disappointment.

But the bottom line for Arkansas businesses may be that the decision changes little here, as power companies continue their shift away from coal generation and remain on a path toward renewable energy goals. 

Oil and gas production in the state is governed far more by market realities and a vast amount of natural gas waiting to be tapped if prices rise. All this points to continued problems for the coal industry, regardless of the administration’s wishes.

Trump rejected the Paris agreement, in which nearly 200 nations promised to meet emissions goals and other cleaner energy standards, as a bad deal for the United States, one likely to cost the nation jobs and billions of dollars in economic activity. He also indicated that America would work to make a better deal, a suggestion dismissed as unlikely by international leaders.

“We’re getting out,” Trump said from the White House Rose Garden on Thursday afternoon, “but we will start to negotiate and we will see if we can make a deal that’s fair. If we can, that’s great. If we can’t, that’s fine.”

While national CEOs like Elon Musk of Tesla and Robert Iger of Disney resigned from presidential councils in protest of the decision, others like General Electric’s Jeff Immelt said that the die has been cast, and corporate America considers the issue of cleaner energy essentially settled. 

“Disappointed with today’s decision on the Paris Agreement,” Immelt wrote on Twitter. “Climate change is real. Industry must now lead and not depend on government.” 

Energy titans like T. Boone Pickens backed the president, but environmentalists were livid.

Glen Hooks, director of the Arkansas Sierra Club, said that the president had “utterly abdicated his responsibility to care for the world” and suggested that instead of protecting American jobs, Trump’s withdrawal would put them at risk.

“Right here in Arkansas, we are experiencing a clean energy boom as more and more Arkansas solar energy facilities come online while we also invest in enormous amounts of wind energy,” Hooks said in a statement. “Communities like Benton, North Little Rock, Camden, Stuttgart and others know that clean energy makes economic and environmental sense.”

Hooks said that even the state’s largest coal-burning utilities, including Entergy Arkansas and the Arkansas Electric Cooperatives, “are relying more upon clean energy and less upon dirty fossil fuels. President Trump should embrace the clean energy boom, not be an obstacle.”

The Arkansas Electric Cooperative Corp. said that the Paris agreement is in the realm of international politics and outside its area of expertise, but it affirmed its mission “to provide reliable, affordable electricity to our members, and to help improve the quality of life in our rural communities.”

Sandra Byrd, AECC’s vice president of public affairs and a former chair of the Arkansas Public Service Commission, said in a statement that the electric cooperatives have found that mix of energy resources is the recipe for success. 

“Our members have been leaders in providing a diverse energy supply that includes natural gas, coal, hydro, wind, solar and biomass,” she said. “That commitment to low-cost, reliable and diverse resources will continue, including a focus on energy efficiency programs.”

Entergy Arkansas, which has coal-burning plants at Redfield and near Newark, also remains focused on long-term plans unaffected by the international agreement, it said in a statement.

Those plans include “enhancing our generation assets and working closely with our regulators to improve reliability and efficiency.” Entergy has been a leader in “responsible energy efficiency and generation for more than 15 years,” the statement said. “We have taken steps to remain under our voluntary carbon cap, by investing in a diversified portfolio of utility-scale solar investments, low-emitting modern natural gas units, and zero-emissions nuclear assets, and we will continue to do so as a long-term commitment of our company.”

At Entergy’s stockholders meeting last month in Little Rock, CEO Leo Denault said that despite the Trump administration’s vocal support for the coal energy, no new coal plants are in Entergy’s future

“If you look at our capital plan, it calls for natural gas and renewables,” he said. “With the price of natural gas being what it is, it’s significantly more economical than coal to begin with.”

Lawrence E. Bengal, director of the Arkansas Oil & Gas Commission, agreed that oil and gas production within Arkansas will be driven more by market prices than international policy. 

“Natural gas use has contributed to an overall reduction in U.S. CO2 emissions which will likely continue, regardless of global agreements, as part of the switch by utilities to a more efficient fuel source,” he told Arkansas Business. “Consequently, U.S. oil and gas development will primarily be driven by the U.S. economy” and domestic energy policies.

On Friday, Little Rock Mayor Mark Stodola joined other mayors signing a statement affirming their commitment to the goals of the Paris climate accord. Stodola, the first vice president of the National League of Cities and a member of the advisory board to the U.S. Conference of Mayors, also condemned Trump’s decision as political and contrary. He said that mayors understand the challenges that climate change present to cities, and that city leaders also know the expanded market for clean technologies. The mayors “stand united in our resolve to fulfill the promise that this global effort toward a global challenge represents.”

Saying that the political decision stands against the public will and the judgment of the global science and business communities, Stodola said cities “will not let this stand in the way of us tackling this environmental, economic and national security issue for our children and grandchildren. We will continue to take action.”

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