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Obama touts N.D., regional energy industry; says 'cap-and-trade' program is 'nothing to be afraid' of

WASHINGTON, D.C. -- North Dakotans worried about the state's robust coal mining and power generation industries shouldn't fear its being crippled by a federal "cap-and-trade" program to regulate greenhouse gases, President Obama said Monday during a meeting with Forum Communications and other newspaper representatives.

"I don't think this is something to be afraid about," he said.

Obama said the state has an important role in a proposed national "smart grid."

The grid would transmit electric power from the state's power plants and wind farms to urban markets and said the federal stimulus package passed recently should help bring more broadband infrastructure to rural areas.

And he's optimistic about reaching an accord with Congress on his proposed federal budget, despite disagreements with lawmakers that include Sen. Kent Conrad, D-N.D., who is the Senate Budget Committee chairman and a sharp critic of the president's budget, saying it will create much bigger deficits than the White House predicts.

Forum Communications' North Dakota Capitol Bureau was one of six newspaper representatives invited Monday to the White House for a roundtable discussion with the president. The event in the West Wing's Roosevelt Room was the third in recent weeks, Obama's press aides said.

In addressing Forum Communications' question about how cap-and-trade may affect the state, Obama brought up on his own that he is aware of the flooding emergency unfolding in the last couple of days and warned that global warming could lead to similar disasters.

North Dakota Gov. John Hoeven said Monday that he's asked for an expedited presidential disaster declaration because of the rapidly developing flood emergency in the state.

Obama said, "In terms of cap and trade, it would be great if climate change wasn't actually going on and we could just pretty much burn any fossil fuel we wanted for as long as we wanted and not have to worry about the consequences of it. It'd certainly make my life easier. I've got enough on my plate."

He continued: "I actually think the science around climate change is real. It is potentially devastating. The flooding in North Dakota that could result if you start seeing severely changing weather -- which is going on -- I can't ascribe that in particular to climate change. If you look at the flooding that's going on right now in North Dakota, and you say to yourself, 'If you see an increase of 2 degrees, what does that do, in terms of the situation there,' that indicates the degree to which we have to take this seriously."

He said there are many ways that cap-and-trade can be organized, but the idea is to give industry incentives to switch from dirty energy to clean energy, "or ways to make dirty energy clean energy."

Cap and trade is a system in which companies would cap their emissions of greenhouse gases such as carbon dioxide, and then trade emissions rights with each other.

North Dakota's lignite industry, Public Service Commission and others have said cap-and-trade schemes could devastate the economy.

The Lignite Energy Council, which represents the state's coal producing companies, said a study of the carbon dioxide reductions anticipated by last year's Lieberman-Warner cap-and-trade bill in Congress showed the state would lose 2,732 to 4,110 jobs by 2020 and that it would lead to higher energy prices, reducing North Dakota's household income $840 to $2,722 per year by 2020. In Minnesota, the study showed the state losing 22,426 to 33,735 jobs by 2020 and higher energy prices reducing Minnesota's household income $1,066 to $3,455 per year by 2020, the council said.

But Obama, noting that he comes from a coal producing state, Illinois, said, said there are many different ways to do cap and trade.

He said, "I'm a big believer in pursuing carbon sequestration technologies that would allow us to use coal in a clean, nonpolluting fashion. But that's going to require some incentives" -- some from government and some from private sector.

"That's happened in dealing with acid rain," he said. "The technology caught up, it ended up being much cheaper than anybody expected."

He believes the outcome will be good.

"I don't think this is something to be afraid about. I think this is an opportunity. It goes hand in hand with the whole issue of energy independence," he said.

On transmission line siting, he said -- as North Dakota officials have noted for years -- the state produces, and can produce huge amounts of power, but needs to get it to urban market areas such as the Twin Cities and Chicago.

"You can't do that in the absence of a new electric grid," he said. "Almost everybody agrees that a smart grid will save us billions of dollars in greater efficiency, reduced leakage, that nobody benefits more than places like North Dakota."

The North Dakota Public Service Commission has warned in recent months that it is far better suited to pick sites for transmission lines than the federal government.

Obama said, "Our interest is cooperating as much as possible with state regulators on this."

The president said the stimulus package also contains millions of dollars, to come through the Department of Agriculture and the Department of Commerce, "to ensure that broadband lines are available everywhere."

He said, "That's not only the kind of spending that creates jobs right now, but also then creates the infrastructure for companies wanting to locate in some of these communities that have fallen behind."

He said the idea is "to make the private sector want to locate in areas that have great quality of life but oftentimes don't have the infrastructure to support what they need. Then, we want to have government filling some of that gap."