By Valerie Volcovici
WASHINGTON (Reuters) - The Obama administration is likely to rely mostly on existing rules and on flexing executive power to execute its second-term environmental agenda, sidestepping Congress as it sets about radically reducing greenhouse gases generated by major polluters.
Just a day after President Barack Obama said in his inaugural address that for the United States not to respond to the threat of climate change would "betray our children and future generations," White House spokesman Jay Carney tamped down expectations for bold new moves.
Carney declined to define specific policies, suggesting the White House will expand its current strategy to regulate and reduce carbon emissions.
"The president will build on, when it comes to climate change, the progress that was achieved in his first term," Carney said at a press briefing.
More details on climate initiatives could come out of the president's State of the Union address on February 12.
Environmentalists have judged Obama as too timid in his first term, especially after a congressional stalemate ended legislative efforts.
The White House has pointed to its drafting of emissions standards for the construction of new power plants and, along with the auto industry, setting stringent fuel efficiency standards for new cars.
The United States is undergoing a boom in domestic energy production, from the oilfields of North Dakota to hydraulic fracturing, or fracking, that has unlocked massive gas reserves in several states. Taking strong environmental steps while still supporting aggressive drilling and exploration will be a balancing act.
Fracking is a mixed blessing, prompting local protests over concerns about possible water pollution but also lowering emissions by displacing coal at power plants.
CLEAN AIR CLOUT
Obama is expected to name an entirely new energy policy team in the next few weeks. Environmental Protection Agency administrator Lisa Jackson and Interior Secretary Ken Salazar are departing. Secretary of Energy Steven Chu is widely expected to leave soon.
Carol Browner, Obama's former White House climate and energy czar, said whoever steps in for Jackson and the others would be following a "path has already been charted by the president.
"I think it's an agenda that has been set under presidential leadership and I think that will continue," Browner said.
Climate analysts guess that the EPA could soon announce a move to use its authority under the federal Clean Air Act to regulate heat-trapping greenhouse gases.
By April the agency is expected to complete carbon emission standards for building new power plants that would effectively prevent any new coal-fired facilities from being built. Next would come a more controversial effort, setting standards for existing coal-fired plants, which account for 40 percent of U.S. greenhouse gases. The measure is sure to provoke industry lawsuits.
"The most likely area for the administration to pursue, in light of what the president said, would be using the New Source Performance Standard (NSPS) for existing power plants under the Clean Air Act," said Dina Kruger, a former director of the Climate Change Division at the EPA.
The NSPS is a program under the Clean Air Act that sets a limit on the rate at which a facility can emit using the best available emission controls.
The EPA is required to produce greenhouse gas standards for existing sources following a 2010 settlement with environmental groups and some states. It has not yet set a deadline.
Ed Whitfield, chair of the House subcommittee on energy and environment, told reporters that Republicans would not be able to curb legislatively any rules the EPA proposes.
"The reality is, I doubt the Senate would pass anything we would pass to repeal them," said the Kentucky representative. "I know there have been court challenges already and I expect that there will be more."
Recent court decisions that have touched on the legal basis for the EPA to regulate carbon have mostly come down in its favor.
David Doniger, policy director of the Natural Resources Defense Council's Climate and Clean Air Program, said this could embolden the EPA as it tackles rules that may be more aggressive than those rolled out under Jackson.
"The agency has a very good batting record on the clean air side. Carbon and climate (regulations) have come through completely unscathed," he said.
Green groups and certain states may sue the EPA to force it to regulate carbon and other greenhouse gas emissions from other unregulated sources such as oil refineries and methane released by fracking.
While the agency is used to being sued by both green and industry groups, the number of cases is apt to increase.
"This is shaping up to be four years of litigation," Christopher Guith, vice president for policy at the U.S. Chamber of Commerce's Energy Institute, told Reuters this month.
Kruger said the EPA would be wise to prioritize just a handful of new rules to tackle as it faces a constrained budget in the coming years.
EXECUTIVE ORDERS AHEAD?
Browner, who was Clinton's EPA administrator, said Obama could use executive orders to direct vast federal agencies to adopt measures that could limit their own energy use, a significant reduction of emissions.
A 2009 executive order required federal agencies to develop and implement sustainable energy plans and review them annually to reduce greenhouse gas emissions, energy, water and waste.
The Department of Energy has issued 16 new or updated energy efficiency standards for home appliances, commercial buildings and industrial facilities that would reduce carbon dioxide emissions by 6.5 billion tons - the equivalent of taking 1.4 billion cars off the road for a year - by 2030.
Agencies with heavy carbon footprints, such as the Department of Defense, have launched a number of initiatives, such as buying a fleet of electric vehicles and investing in renewable energy.
But market forces more than regulations could have the biggest impact on carbon emissions in the coming years, with cleaner natural gas from fracking continuing to displace coal as a source of electricity.
"When it comes to carbon, the market has actually done a lot of things that you would hope policy would do. I don't think you need a whole lot of policy to increase gas use (to replace coal) in power generation," said Nikos Tsafos, analyst at PFC Energy in Washington.
(Additional reporting by Tim Gardner, Ayesha Rascoe; editing by Ros Krasny and Prudence Crowther)