Why EPA’s new carbon rules won’t have much impact — for now

at 10:44 AM ET, 03/27/2012

On Tuesday, the Environmental Protection Agency unveiled its first-ever rules on carbon-dioxide emissions from new power plants. These rules are part of the EPA’s program to tackle global-warming pollution. But what sort of impact will they actually have? Not a whole lot — at least for the foreseeable future.


Don’t expect any more of these. (Michael S. Williamson/Washington Post)
First, a quick refresher: These latest carbon rules are the third step in the EPA’s ongoing effort to regulate greenhouse gases under the Clean Air Act. The first two phases involved setting stricter fuel-economy standards for cars and light trucks. Today’s rule, which falls under the New Source Performance Standard portion of the law, sets rules for power plants that haven’t been built yet.

The rule, in short, is this: Any new plant built in the United States will have to emit no more than1,000 pounds of carbon-dioxide per megawatt-hour. The vast majority of modern natural-gas plants meet that standard, so they should be fine. Conventional coal plants, however, average upward of 1,800 pounds per megawatt-hour. They’re not so fine.

This effectively means, analysts agree, that it will be impossible to build any new coal-fired power plant in the United States that can’t capture and store its own carbon emissions. Right now, there are two carbon-capture projects in development, one out in West Virginia and one in Texas, but the technology is still costly and unproven. For the time being, then, this is a moratorium on all new coal plants.

Practically, though, that might not have a huge impact in the short term. The rule won’t affect existing power plants, and it won’t affect any coal-fired plants that are already permitted or set to begin construction within a year. According to a Department of Energy report (pdf), there are 24 such plants in the works. This rule would affect any future coal-fired plants — but right now there are hardly any such plants being planned in the United States. In recent years, utilities have been shifting away from coal on their own, largely due to other pollution regulations and the influx of cheap natural gas. The Energy Information Adminstration was already projecting that no coal plants would come online between 2017 and 2035.

So this latest rule might be mostly symbolic — a way of recognizing that global warming is a problem but not taking dramatic steps to cut emissions further. Conventional coal-fired plants were looking increasingly uneconomical anyway, and the EPA’s rules mostly codify that trend. (On the other hand, as Grist’s Dave Roberts notes in his excellent primer, these rules might matter if natural gas prices were to ever spike again. In that case, these EPA rules would require utilities to seek out either renewables, nuclear power, or coal with carbon-capture as alternatives.)

Meanwhile, this rule is only a first step. The EPA is still mulling over how to deal with existing power plants under a different section of the New Source Performance Standards program, section 111(d), that governs otherwise-unregulated pollutants.

Details on these latter regulations are still murky, and it’s not clear when they’ll emerge.* In theory, the EPA has a lot of flexibility under section 111(d) and could even give states the authority to set up a cap-and-trade system for existing plants. Yet many analysts think that option is unlikely. “The EPA has had a series of listening sessions on this topic,” said William Bumpers, a lawyer with Baker Botts, in a recent interview. “But it’s still struggling to develop these rules.”

Beyond that, the EPA is also crafting carbon regulations for oil refineries and other stationary pollution sources. All of these future rules could matter a lot: A 2010 report from the World Resources Institute found that the EPA’s carbon rules, when fully deployed, could cover about three-quarters of the country’s greenhouse-gas sources and reduce U.S. carbon emissions anywhere from 5 percent to 12 percent below 2005 levels by 2020. For reference, the Obama administration pledged a 17 percent cut at the Copenhagen climate change conference.

But that’s only if the rules are used to their fullest extent. For the time being, the EPA is just a little bit of the way there.

*Update: In a conference call this afternoon, EPA administrator Lisa Jackson said, “We have no plans to address existing plants and in the future if we were to propose a standard, it would be informed by an extensive public process with all the stakeholders involved.” So, for now, the agency is holding off on further carbon cuts.

 
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