EPA Putting the Lid on Coal-Fired Power Plants

The Environmental Protection Agency (EPA) announced new greenhouse-gas standards for power plants, following through with the authority conferred by a 2007 Supreme Court ruling declaring carbon dioxide a pollutant under the Clean Air Act.  The new regulation effectively bans new coal-fired power plants unless they capture and sequester carbon dioxide.  Advanced natural-gas plants would meet the standard without mitigation, while existing power plants would be grandfathered in.  The regulation would require new power plants to emit no more than 1,000 pounds of CO₂ per megawatt‐hour of electricity generated.

What are the implications?  It is clear that the short-term impact will be minimal: cheap natural gas derived from plentiful shale deposits is already overtaking coal as a source of power.

An average coal-fired plant generates more than 1,700 pounds of carbon dioxide per megawatt. The majority of natural-gas fired plants – and the bulk of power plants currently under construction – emit less than the new standard, approximately 800 pounds per megawatt.

Environmentalists praised the proposed restrictions, while the coal industry warned that the change would lead to higher electricity prices.  “Today we’re taking a common-sense step to reduce pollution in our air, protect the planet for our children, and move us into a new era of American energy,” said EPA Administrator Lisa Jackson.  “We’re putting in place a standard that relies on the use of clean, American-made technology to tackle a challenge that we can’t leave to our kids and grandkids.”  Currently, there is no consistent national limit on the amount of carbon emissions that new power plants can release.  According to an EPA fact sheet, the agency was obliged by the landmark 2007 Supreme Court ruling “to determine if (the emissions) threaten public health and welfare.”  In December of 2009, the EPA formally confirmed that greenhouse gases “endanger the public health and welfare of current and future generations.”

Older coal plants have already been going offline, thanks to low natural gas prices and weaker demand for electricity. Nevertheless, some accused the Obama administration of clamping down on low-priced, domestic energy sources and said the regulation raises questions about the seriousness of the president’s pledge for an “all-of-the-above” energy policy.  “This rule is part of the Obama administration’s aggressive plan to change America’s energy portfolio and eliminate coal as a source of affordable, reliable electricity generation,” said Representative Fred Upton, (R-MI), chairman of the House Energy and Commerce Committee.  “EPA continues to overstep its authority and ram through a series of overreaching regulations in its attacks on America’s power sector.”

“There are areas where they could have made it a lot worse,” said Scott Segal, director of the Electric Reliability Coordinating Council, a coalition of power companies.  Nevertheless, “the numerical limit allows progress for natural gas and places compliance out of reach for coal-fired plants” not planning to capture carbon dioxide.  Steve Miller, CEO and President of the American Coalition for Clean Coal Electricity, a group of coal-burning electricity producers, was more negative about the proposal.  “The latest rule will make it impossible to build any new coal-fueled power plants and could cause the premature closure of many more coal-fueled power plants operating today,” Miller said.

Writing for Reuters, John Kemp, Senior Market Analyst, Commodities and Energy notes that “Because natural gas is currently so much cheaper than coal, the agency projects gas-fired units will be the facilities of choice until at least 2020.  ‘Energy industry model ling forecasts uniformly predict that few, if any, new coal-fired power plants will be built in the foreseeable future,’ according to the proposed rule.  The key word is ‘foreseeable’.  No one can predict the economics of natural gas as far ahead as 2020, let alone 2030.  Recent development of abundant gas reserves through fracking may have caused prices to plunge, leading to a ‘golden age of gas’, but just seven years ago the industry was gripped by panic about gas production peaking and thought America stood on the brink of needing to import increasing quantities of expensive gas.”

Jeff Goodell of Rolling Stone writes “So this new rule is, at best, a baby step in the right direction.  As always with the climate crisis, physics is moving much faster than politics.  Just yesterday top scientists warned that global warming is close to irreversible now. In the biggest sense, we’re still doing next to nothing to confront this crisis.  Global carbon pollution is rising faster than ever, and the weather – to say nothing of future our future climate – is getting wilder.  The urgency of our situation just underscores the need for an economy-wide price on carbon, or cap-and-trade system, which would impact all major emissions sources and actually limit the amount of carbon we dump into the atmosphere, rather than just speeding the shift from coal to gas.  Still, this is an important moment, a small sign of progress.  Goodbye, Mr. Coal.  Don’t let the door hit you on the way out.”