By Ernest Scheyder
HOUSTON, March 6 (Reuters) - Carbon regulations can becrafted to help offset climate change without "shutting downbusiness in its tracks," U.S. Environmental Protection AgencyAdministrator Gina McCarthy said at a major energy conference onThursday.
"We don't have to choose between a healthy environment and ahealthy economy," McCarthy, who has run the EPA for nearly ayear, said about new rules she said would be proposed by June.
McCarthy's speech to IHS CERAWeek, the largest meeting ofenergy executives in the world, was the first by an EPAadministrator since the conference began 33 years ago.
Her presence was seen as an acknowledgement by the Obamaadministration that the onshore U.S. energy boom over the pastfive years has been one of the economy's bright spots.
"We know conventional fuels like coal and natural gas aregoing to continue to play a critical role in a diverse U.S.energy mix," McCarthy said.
The Houston visit came about a week after McCarthy touredNorth Dakota, trying to convince the state's coal, oil andethanol producers that her agency was not trying to burden theirindustries with onerous regulations.
The fuels, McCarthy said in North Dakota, should be part ofan "all-of-the-above strategy" that runs from solar to coal. Shereiterated that theme to CERAWeek's more than 2,000 attendees.
It was a marked shift from McCarthy's predecessor, LisaJackson, viewed warily by energy companies that perceived her asindifferent to how regulations affected their operations.
"Administrator McCarthy understands the EPA has to protectthe environment while doing all it can to protect jobs," saidLarry Nettles, an environmental lawyer at Vinson & Elkins LLP, aprominent law firm in the energy sector.
REGULATION AND INNOVATION
Energy and environmental issues are "two sides of the samecoin" that can be accomplished in tandem, McCarthy said.
For instance, she credited new fuel efficiency standards forautomobiles with encouraging automakers to build cars that getmore miles per gallon, boosting appeal to consumers.
"Go figure: an environmental rule helped fuel a resurgentAmerican auto industry," McCarthy said.
Energy executives said they were encouraged by the EPA's newtone but are eager to see it reflected in concrete regulation.
Utilities are awaiting final rules on new and existing coalplants. Some say rules that are too restrictive could endcoal-powered electricity generation in the United States.
"In order not to impact the economy or the reliability ofthe grid, we need to ensure this is done in a responsible way,"Nick Akins, CEO of American Electric Power, said atCERAWeek.
McCarthy said she will work to recognize each state's uniqueenergy and regulatory needs. Texas, for instance, has the mostoil refineries, and may have different concerns than Maine,which produces a large amount of pellet fuel for wood stoves.
McCarthy said her first priority is stopping climate change,which she said would cost U.S. businesses more in total than theexpense of complying with regulations.
"The real, scary cost we need to worry about is the cost ofclimate inaction," she said.
Lynn Good, chief executive officer of Duke Energy,the largest American utility, said she is "encouraged" byMcCarthy's new approach but has already decided building newcoal plants are not worth the regulatory risk.
"I don't see new coal in the mix for Duke," Lynn said.
She said she believes opponents of EPA regulations haveoften been wrong before and may be again when they cry "the skyis falling" when new rules are enacted.
"We've heard this tired argument again and again before,"she said. "And every single time, it's fallen flat on its face."
