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WASHINGTON, Aug 31 (Reuters Point Carbon) - President Barack Obama issued an executive order on Thursday that would increase the number of cogeneration plants in the U.S. by 50 percent by 2020, a move that would boost U.S. industrial energy efficiency and slash carbon emissions by 150 million tons per year.
The order is the administration's latest effort to deploy cleaner and more efficient energy production in the country by working around political resistance to climate change and "green" energy legislation on Capitol Hill.
The measure aims to accelerate investments to help manufacturers expand their use of combined heat and power (CHP) facilities, which generate thermal and generating power in a single process.
The White House said increased investments in the industrial sector, which accounts for over 30 percent of energy consumed in the U.S., would improve its competitiveness, lower energy costs and reduce heat trapping emissions.
"The Federal Government has limited but important authorities to overcome … barriers, and our efforts to support investment in industrial energy efficiency and CHP should involve coordinated engagement with a broad set of stakeholders," the order says.
The U.S. currently has an installed capacity of 82 gigawatts of CHP, with 87 percent of those in manufacturing plants, according to the Environmental Protection Agency (EPA).
Installing the administration's goal of an additional 40 gigawatts would save one Quadrillion Btus of energy and reduce over 150 million metric tons of carbon dioxide emissions annually, the agency said.
The addition of the new capacity would save energy users $10 billion a year compared to their existing energy sources and would also result in $40-80 billion in new capital investment in manufacturing.
The order directs the Departments of Energy, Commerce, and Agriculture, and the Environmental Protection Agency, in coordination with a number of White House advisory groups, to coordinate their policies to encourage investment in industrial efficiency.
The order also directs the federal agencies to help states to use CHP to achieve their national ambient air quality standards, and provide incentives through their regulations to help boost the technology.
The Obama administration has been unable to get Congress to pass comprehensive energy and climate legislation that would set a price on carbon pollution and stimulate investment in renewable energy and CHP.
The administration has focused instead on devising direct regulations through cabinet agencies to help the U.S. meet the president's goal to cut greenhouse gas emissions 17 percent below 2005 levels by 2020.
Thursday's executive order came just two days after the White House finalized a rule - developed with U.S. automakers - that would double fuel efficiency standards for automobiles and light trucks to 54.5 miles per gallon by 2025.
The EPA said the car efficiency standards will be the most effective domestic policy in place to curb greenhouse gas emissions, cutting as much as 6 billion metric tons of carbon dioxide equivalent by 2025.
Meanwhile, a boom in the production of shale gas has accelerated a shift in the electric sector to natural gas-fired generation away from coal-fired generation.
The shift caused carbon dioxide emissions from energy use in the first quarter of this year to fall their lowest level in the U.S. in 20 years.
"Encouraging investments in CHP offers the opportunity for increasing the efficiency of energy-intensive manufacturing, while simultaneously meeting the need for new electric power generation capacity," said Neal Elliott, associate director at the American Council for an Energy-Efficient Economy.
"CHP projects will make the most efficient use of our gas resource and the capital investment required to generate electricity from gas."
Reporting by Valerie Volcovici