Impact of EPA CO2 rule, $2 gas debated by industry officials

Despite the industry outcry over the U.S. EPA’s recently-published CO2 standard for new coal plants, the rule won’t have much impact on the nation’s generation mix, a couple of industry officials told a Las Vegas gathering April 2.

Vince Hahn, a senior vice president at SAIC Energy, Environment and Infrastructure, likened it to the tree falling in the woods where nobody can hear it. The truth is no more new coal plants are expected to be built soon anyway, aside from a handful already in advanced development, Hahn and other panelists said of emissions rules. The economics of $2/mmBtu natural gas have already done what the rule is designed to do, Hahn said.

The comments came during the Platts Global Power Markets Conference. Hahn and Joseph Dominguez, a senior vice president of government affairs with an Exelon (NYSE: EXC) subsidiary, agreed. Of much greater concern is what EPA will propose one day on CO2 standards for existing coal plants, they said.

Other speakers agreed that few if any utilities will invest major capital in developing carbon controls while they can comply with EPA mandates by merely switching to cheap natural gas.

Another important issue to keep an eye on is EPA’s 316(b) cooling water rule that should come out in July, officials said. Unlike the CO2 standard, this one will hit not only coal but potentially some natural gas and nuclear power plants.

The rule could force some existing power plants to close unless they install expensive cooling towers as a means to prevent fish kills. Like many other EPA rules it is an outgrowth of federal litigation.

Dominguez said that Exelon has already decided to close down one of its Northeastern nuclear power plants, Oyster Creek, by the end of the decade rather than install the expensive cooling towers.

About Wayne Barber 4201 Articles
Wayne Barber, Chief Analyst for the GenerationHub, has been covering power generation, energy and natural resources issues at national publications for more than 20 years. Prior to joining PennWell he was editor of Generation Markets Week at SNL Financial for nine years. He has also worked as a business journalist at both McGraw-Hill and Financial Times Energy. Wayne also worked as a newspaper reporter for several years. During his career has visited nuclear reactors and coal mines as well as coal and natural gas power plants. Wayne can be reached at wayneb@pennwell.com.