Obama: Government To Cut CO2 Emissions 28% By 2020

U.S. President Barack Obama on Friday ordered the federal government to reduce greenhouse-gas emissions by 28% by 2020, marking a new push toward energy efficiency and a greater reliance on low-carbon energy.

The federal government is the largest consumer of energy in the U.S. economy, accounting for nearly 1.5% of the nation's spending on fuel and electricity, and the mandate could help boost development of the renewable and clean energy sectors.

The executive order, "will spur clean energy investments, create new private sector jobs, drive long-term savings, build local market capacity and foster innovation and entrepreneurship in clean energy industries," said Nancy Sutley, chair of the White House Council on Environmental Quality, in a teleconference.

Under the mandate, federal departments and agencies will measure current energy and fuel use and then take steps to use more "clean energy" sources such as solar, wind, and geothermal power, the White House said in a statement.

Dorothy Robyn, deputy undersecretary of Defense for Installations and Environment, said the order wouldn't affect combat operations, excluding more than 60% of the DOD's greenhouse gas emissions such as jet fuel for planes and diesel for tanks. According to the Energy Information Agency, the DOD's energy consumption represents more than three-quarters of the federal government's total energy budget.

Still, replacing several hundred thousand vehicles in the government's fleet and providing renewable energy and new, energy-efficient windows throughout its 35 different agencies represents major contracting opportunities.

Take, for example, U.S. Army's National Training Center at Ft Irwin, Calif., where a $1.5 billion, 500-megawatt solar power project will be built, and ultimately expanded to 1 gigawatt. Clark Enterprises and Acciona, a Spanish renewable-energy developer, will construct the array, leasing the military's land in exchange for lower-cost electricity.

Although Sutley said the government may be able to save up to $10 billion over the next decade in energy costs, she couldn't say how it would cost taxpayers to implement. But, she noted that the nearly $800 billion economic stimulus bill included $4.5 billion for the General Services Administration for renewable energy and efficiency investments, $4.2 billion to modernize DOD facilities and $300 million to buy electric vehicles for the federal fleet.

-By Ian Talley and Siobhan Hughes, Dow Jones Newswires; 202-862-9285; ian.talley@dowjones.com