EPA says CO2 standard won’t hurt much; but coal power sector begs to differ

While the U.S. Environmental Protection Agency just proposed a Carbon Pollution Standard for new power plants on March 27, the massive blowback has been immediate from the coal and coal-fired power sector.

“This common‐sense step under the Clean Air Act would, for the first time, set national limits on the amount of carbon pollution power plants, built in the future, can emit,” said EPA in a rule fact sheet. “EPA’s proposed standard reflects the ongoing trend in the power sector to build cleaner plants that take advantage of American‐made technologies. The agency’s proposal, which does not apply to plants currently operating or new permitted plants that begin construction over the next 12 months, is flexible and would help minimize carbon pollution through the deployment of the same types of modern technologies and steps that power companies are already taking to build the next generation of power plants.”

In 2009, EPA determined that greenhouse gas pollution threatens Americans’ health and welfare by leading to long lasting changes in the earth’s climate.

The proposed rule would apply only to new fossil‐fuel‐fired electric utility generating units (EGUs). For purposes of this rule, fossil‐fuel‐fired EGUs include fossil‐fuel‐fired boilers, integrated gasification combined cycle (IGCC) units and stationary combined cycle turbine units that generate electricity for sale and are larger than 25 MW.

New plants can choose to burn any fossil fuel to generate electricity, including natural gas as well as coal with the help of technologies that reduce carbon emissions, EPA noted. Also exempt from the rule would be units looking to renew permits that are part of a U.S. Department of Energy demonstration project, provided that these units start construction within 12 months of this proposal. These units are called “transitional” units. The new rule also doesn’t apply to new units located in non‐continental areas, which include Hawaii and the territories. Also exempt are new units that only biomass rather than fossil fuels.

EPA is proposing that new fossil plants meet an output‐based standard of 1,000 pounds of CO2 per megawatt‐hour (lb CO2/MWh gross). New natural gas combined cycle (NGCC) power plant units should be able to meet the proposed standard without add‐on controls, EPA said. In fact, based on available data, EPA believes that nearly all (95%) of the NGCC units built since 2005 would meet the standard. New power plants that are designed to use coal or petroleum coke would be able to incorporate technology to reduce CO2 emissions to meet the standard, such as carbon capture and storage (CCS).

Some states, including Washington, Oregon and California, currently limit greenhouse gas (GHG) pollution. Other states, including Montana and Illinois, currently require CCS for new coal generation, EPA said.

New power plants that use CCS would have the option to use a 30‐year average of CO2 emissions to meet the proposed standard, rather than meeting the annual standard each year. Plants that install and operate CCS right away would have the flexibility to emit more CO2 in the early years as they learn how to best optimize the controls. A company could build a coal‐fired plant and add CCS later. For example, a new power plant could emit more CO2 for the first 10 years and then emit less for the next 20 years, as long as the average of those emissions met the standard.

EPA, DOE and industry projections indicate that, due to the economics of coal and natural gas among other factors, new power plants that are built over the next decade or more would be expected to meet this proposed standard even in the absence of the rule, EPA pointed out. Because this standard is in line with current industry investment patterns, it is not expected to have notable costs and is not projected to impact electricity prices or reliability.

In April 2007, in a landmark decision in Massachusetts v. EPA, the U.S. Supreme Court determined that greenhouse gases, including CO2, are air pollutants under the Clean Air Act and EPA must determine if they threaten public health and welfare. In December 2009, the EPA administrator found that the current and projected concentrations of greenhouse gases endanger the public health and welfare of current and future generations. In December 2010, EPA announced a proposed settlement agreement to issue rules that would address GHG pollution from certain fossil fuel‐fired EGUs. This agreement addressed, in part, EPA’s September 2007 remand of its February 2006 final decision not to set standards for boilers.

In early 2011, EPA held several listening sessions to gain important information and feedback from key stakeholders and the public before initiating the rulemaking process to set Carbon Pollution Standard for new power plants. EPA also solicited written comments. EPA said it considered these comments when drafting this proposal. The EPA will accept comment on this proposed rule for 60 days following publication in the Federal Register and will hold public hearings. The dates, times, and locations of the public hearings will be available soon.

The coal empire strikes back

Industry wasn’t buying the EPA’s ‘this won’t hurt much’ message on this proposal.

National Mining Association President and CEO Hal Quinn said in a March 27 statement: “EPA’s proposal for controlling greenhouse gas emissions from about half the nation’s electric power supply is a poorly disguised cap-and-tax scheme that represents energy and economic policy at its worst. Higher utility bills and fewer jobs are the only certain outcomes from this reckless attempt to override Congress’s repeated refusal to enact punitive caps on carbon dioxide emissions.”

Top Republicans on the U.S. House Committee on Energy and Commerce said in a March 27 statement that the proposal would add to the “tangle of regulatory red tape” already imposed by other new rules affecting electric utilities, effectively forming a “backdoor energy tax” on families and businesses.

American Coalition for Clean Coal Electricity President and CEO Steve Miller said in a March 27 statement: “Unfortunately, the EPA continues to ignore the real impact their rules will have on American families and businesses by driving up energy prices and destroying jobs. This is another, in a series of new regulations, written by EPA to prevent the U.S. from taking advantage of our vast coal resources that are responsible for providing affordable electricity for America’s families and businesses. This 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.”

The coalition said that last month, 221 Democrat and Republican members of the U.S. House signed a letter to the White House Office of Management and Budget explaining that new GHG standards for coal-fueled power plants would force a transition to undeveloped technologies and send thousands of U.S. jobs overseas.

The coalition is a non-profit, non-partisan partnership of companies involved in producing electricity from coal. It also advocates for the development and deployment of advanced clean coal technologies that will produce electricity with near-zero emissions.

National Rural Electric Cooperative Association CEO Glenn English said in a March 27 statement: “NRECA and its member electric cooperatives are extremely disappointed to learn that the Obama Administration, in a New Source Performance Standard issued today by the EPA, has jettisoned American coal from the President’s all-of-the-above energy strategy. Because commercially viable carbon capture and storage technology is still years away, the rules issued today by EPA have the practical effect of outlawing coal as a fuel source for the next generation of power plants. Alternatively, America’s electric cooperatives support an energy policy that maximizes energy efficiency and truly embraces all domestic fuels: nuclear, natural gas, renewable and coal.”

NRECA is the national service organization that represents the nation’s more than 900 private, not-for-profit, consumer-owned electric cooperatives, which provide service to 42 million people in 47 states.

About Barry Cassell 20414 Articles
Barry Cassell is Chief Analyst for GenerationHub covering coal and emission controls issues, projects and policy. He has covered the coal and power generation industry for more than 24 years, beginning in November 2011 at GenerationHub and prior to that as editor of SNL Energy’s Coal Report. He was formerly with Coal Outlook for 15 years as the publication’s editor and contributing writer, and prior to that he was editor of Coal & Synfuels Technology and associate editor of The Energy Report. He has a bachelor’s degree from Central Michigan University.