For the administration, the revised rule is the first major domestic initiative since President Obama laid out his climate action plan in June. Ahead is the EPA’s decision on limiting emissions from existing power plants, which Administrator Gina McCarthy said Thursday will be made in June 2014.
“We’re providing at least some certainty here that [coal plants] have an opportunity to be around in a carbon-constrained world,” McCarthy said in an interview. “The president wants every fuel to be able to compete in a clean environment.”
But McCarthy made clear that the administration views greenhouse gases the way it sees other air pollutants and will regulate them accordingly, even if it forces the industry to spend more money to comply. “We are treating carbon the same way we’ve treated every other pollutant under the Clean Air Act,” she said.
Proposal vs. utilities
Utility companies with large coal fleets already are preparing to challenge the rule, if it is finalized, on the grounds that the agency is requiring pollution controls that have not yet been “adequately demonstrated” in the marketplace.
Joseph Stanko, head of government relations for the law firm Hunton & Williams, said the EPA’s reliance on “federally funded demonstration projects” as the base for its new standard “is illegal, it doesn’t ‘adequately demonstrate’ technology for normal use.”
“NASA sent men to the moon with federal funds. That doesn’t mean municipalities and companies can do it,” Stanko said.
Dan Lashof, director of the climate and clean air program at the Natural Resources Defense Council, said the Clean Air Act requires pollution controls to be adequately demonstrated, but “there’s nothing in the statute that says it’s the cheapest way to make electricity.”
McCarthy said: “Clearly the technology is available. It’s been fully demonstrated.” The Energy Department has a $6 billion loan fund to help finance development of clean energy technologies, she said.
“We’re not trying to deny that there is a cost associated with these, but any first-generation technology is going to have that,” she said.
New restrictions for coal
The standard, which would be finalized in a year, would require new coal plants to emit no more than 1,100 pounds of carbon dioxide per megawatt-hour. New, large gas-fired plants — those with a heat input rating of 850 million British Thermal Units per hour — would be restricted to 1,000 pounds of carbon dioxide per megawatt-hour, and smaller gas turbines would be limited to 1,100 pounds.
The average U.S. coal plant emits 1,768 pounds of carbon dioxide per megawatt-hour. Natural gas plants emit 800 to 850 pounds.
To meet the new limit, coal plants would have to capture and store 20 to 40 percent of the carbon they produce, McCarthy said. Power plants are responsible for about a third of the greenhouse gases produced in the United States. McCarthy said there are no pending applications for new coal plants.
Coal prices and the value of energy companies with large numbers of coal-fired power plants have declined as cheaper natural gas has become more widely used in power plants. Still, coal was responsible for about 37 percent of all power generation in 2012, according to the U.S. Energy Information Administration’s Web site.
The EPA originally proposed the rule in March 2012, but withdrew it out of concern that it was vulnerable to a challenge in court.
Hal Quinn, president and chief executive of the National Mining Association, said the new standard “effectively bans coal from America’s power portfolio, leaving new power plants equipped with even the most efficient and environmentally advanced technologies out in the cold.” He accused the EPA of “recklessly gambling with the nation’s energy and economic future.”
But John Thompson, who directs the Fossil Transition Project for the Clean Air Task Force, an advocacy group, said his group has estimated that under a worst-case scenario, partly capturing CO2 from coal plants would increase the cost of electricity by 13 percent over 30 years.
With China and India building dozens of new coal plants, Thompson said, encouraging the development of carbon capture technology will serve the world’s interest.
“When you look at the future, in order to have any realistic possibility of addressing climate change, we will need to have carbon capture and storage on the power and industrial sectors,” he said.