What Will the EPA’s New Carbon Rule Mean for U.S. Electrical Generation?
The United States Environmental Protection Agency (EPA) recently published a new rule severely limiting greenhouse gas emissions for electricity generation, effectively blocking the construction of future coal-fired power plants. The new standard spotlights the potential of natural gas as a cleaner bridge to a renewable world, as well as the bitter controversy over human-caused climate change.
On March 27, 2012, EPA released its proposed Clean Air Act (CAA) standard for greenhouse gas emissions (GHG) from new power plants. In an announcement from the agency, EPA Administrator Lisa P. Jackson called the new rule “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.”
Not everyone thinks the new standard is a good idea.
Scott Miller, CEO of the American Coalition for Clean Coal Electricity, said in a 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.
So far, other EPA regulations are responsible for the announced closure of more than 140 electricity generating units in 19 states. The regulation EPA proposed today could raise the number of closures even higher and put more workers out of jobs.
Kevin Knobloch, president of the Union of Concerned Scientists, acknowledged in a statement from the organization that the new rule “signals that more of our future energy needs will be met by clean, affordable, and reliable sources of energy.” However, he also expressed concern that it doesn’t go far enough: “EPA also must focus on the main source of power plant carbon emissions — existing coal-fired plants, many of them more than 50 years old, which are responsible for nearly 40 percent of U.S. carbon emissions.”
Up to now, the U.S. has had no uniform national limit on carbon emissions for new power plants. In a 2007 decision in the court case Massachusetts v. Environmental Protection Agency, the U.S. Supreme Court ruled in a 5-4 decision that the EPA must regulate carbon dioxide and other GHGs as pollutants under the Clean Air Act. In 2009, the agency released an endangerment finding stating that “the current and projected concentrations of the six key well-mixed greenhouse gases — carbon dioxide (CO2), methane (CH4), nitrous oxide (N2O), hydrofluorocarbons (HFCs), perfluorocarbons (PFCs), and sulfur hexafluoride (SF6) — in the atmosphere threaten the public health and welfare of current and future generations.”
The new rule proposes “new source performance standards for emissions of carbon dioxide (CO2) for new affected fossil fuel-fired electric utility generating units (EGUs).” The EPA says it is targeting fossil-fuel plants as “the country’s largest stationary source emitters of GHGs.”
The new requirements would apply only to new plants greater that 25 megawatts (MW). New plants will have to meet an output standard of a maximum 1,000 pounds of CO2 per megawatt-hour (MWh). The standard does not apply to existing plants, to those now under construction, or to plants that already have permits and are schedule to start within 12 months.
The 1,000 lb CO2/MWh standard exceeds the output performance of natural gas combined cycle (NGCC) plants, so it looks as if EPA’s intent is to nudge the market toward natural gas power generation and away from coal. The only way a coal-fired plant could meet the standard would be through employment of carbon capture and storage (CCS), still a relatively unproven technology.
The EPA rule states the agency’s rationale for focusing on power plants:
The EPA is proposing to control CO2 pollution from fossil fuel-fired power plants because they are responsible for approximately 40 percent of all U.S. anthropogenic CO2 emissions. Individual new coal fired power plants are among the largest individual new sources of GHGs. Furthermore, design and technology choices, such as NGCC, exist that can be readily and cost-effectively used to reduce GHG emissions from new fossil fuel-fired power plants. Thus, this proposed rule is a rational first step to control GHG emissions from the largest-emitting stationary sources under [Clean Air Act] section 111.
The agency asserts that human-caused climate change impacts are potentially “far-reaching and multidimensional” and are expected to include “more frequent and intense heat waves, more severe wildfires, degraded air quality, heavier and more frequent downpours and flooding, increased drought, greater sea level rise and storm surge, more intense storms, harm to water resources, continued ocean acidification, harm to agriculture, and harm to wildlife and ecosystems.” Those effects in turn present hazards to the health and welfare of U.S. citizens, including “premature deaths, illnesses, [and] damage to property and infrastructure.”
Carbon Regulation and the Global Warming Controversy
Government regulation of environmental pollutants is nothing new, and few people would argue that the world would be safer without any such regulation. However, efforts to limit emissions of carbon dioxide could result in drastic changes in the way energy is used in the United States and globally. Critics fear that such efforts will be expensive and damaging to the economy.
In a blog post on his campaign website, Republican presidential candidate Mitt Romney states:
Irresponsibly, the EPA declared carbon dioxide, the same carbon dioxide that humans exhale, to be a “pollutant” that poses risks to human health. As a result, the EPA is now issuing regulations under the Clean Air Act that will produce the same sort of economic devastation that Congress had wisely rejected.
These regulations are only one piece of an expansive and destructive regulatory agenda.
In Mississippi recently, presidential candidate Rick Santorum criticized the EPA’s plans to regulate carbon dioxide emissions thusly: “The dangers of carbon dioxide? Tell that to a plant, how dangerous carbon dioxide is.”
Human-caused global warming and carbon dioxide’s role in the phenomenon generate much rhetoric. Critics charge that global warming is “junk science” and a “hoax” and that its defenders are “alarmists.” Environmental advocates call their critics “deniers” and claim that they are “anti-science.”
However, I’ve argued before that the debate over global warming is not exactly about science. It’s more a social controversy than a scientific controversy. People tend to line up on one side or the other based on ideological and political leanings, rather than on what they think they know about the science.
And climate change is a high-stakes issue. On the one hand, a lot of money and the well-being of the human economy are at stake. On the other hand, the future of life on Earth is at stake. It might be an over-simplification, but you could look at this conflict over climate change as a battle between two extreme ideologies, market fundamentalism and eco-socialism:
- Market fundamentalism holds that unfettered markets can be trusted to find the best economic solution to any problem.
- Eco-socialism seeks to bring about global social justice while saving the earth and its life from the depredations of greed-fueled capitalism.
The number of extremists — that is, the truly ardent adherents to those ideologies — might be relatively few. But each side spins a narrative in the media that paints the other side with the extremist brush, and generates enough fear to draw in more moderate supporters.
Well, that’s more or less my take on this controversy, anyway. You can see what I’ve written about it previously in these articles:
The question whether carbon dioxide is a pollutant is an interesting one. Senator Santorum’s jibe sounds disingenuous to the thinking person. Obviously, carbon dioxide is a naturally occurring substance in our atmosphere and plants need it to survive and to create food through photosynthesis. But that doesn’t necessarily mean that more is better or that CO2 does no harm.
Nevertheless, I do sometimes hear people question how a gas that makes up fewer than 400 parts per million (ppm) in our atmosphere could really be harmful. Global warming critic Gregg D. Thompson has written:
CO2 is a harmless trace gas. It is necessary for life – just as oxygen and nitrogen are. It is a natural gas that is clear, tasteless and odorless. It is in no way a pollutant.
It does seem counter-intuitive. However, CO2′s role as a greenhouse gas is pretty well understood by atmospheric scientists. CO2 has an affinity for the infrared radiation emitted by the earth, and even at very small quantities the gas is able to absorb some of that radiation and slow down its escape into space, thus increasing the greenhouse effect and causing average temperatures to rise. (I’ve explained how that works in a previous article, Carbon Dioxide — How Can One Little Molecule Be Such a Big Troublemaker?)
Natural Gas: The Lower-Carbon Path Forward?
The new EPA rule gives a noteworthy signal to the energy and power industries: Natural gas is the good guy.
In a Bloomberg report on March 27, Mark Drajem writes:
The boom in American natural-gas production is doing what international negotiations and legislation couldn’t: reducing U.S. carbon-dioxide pollution.
With decade-low prices, natural gas is easing out coal in power generation, a change that cuts greenhouse gases by half at the smokestack. That shift, combined with state programs to encourage renewable energy and new rules from the Environmental Protection Agency …, has put the country on course to cut domestic greenhouse-gas emissions 12 percent by 2020, on par with what the failed cap-and-trade legislation aimed to achieve.
This move by the EPA under the Obama Administration confirms my expectation that policymakers will begin pushing natural gas as a cleaner energy source to make the transition from coal to renewables.
I recently wrote a series of articles about the environmental impacts of various sources of energy, both green and conventional. In researching my article about natural gas, The Damage Done, Part 4 — Natural Gas, Green or Dirty?, I found that gas compares quite favorably to coal. The lifecycle carbon footprint of natural gas is 443 CO2 equivalents per kilowatt hour (kWh), as opposed to 960-1,050 for coal, that is, less than half. That 443 is still much higher than nuclear (66), solar photovoltaic (32) or wind (9), but realistically in the shorter term, natural gas electrical generation can be brought into production more quickly and more economically than nuclear or renewables.
Natural gas also compares favorably in terms of health damages and other non-GHG damages from conventional pollutants. A study from the National Academy of Sciences (NAS) estimated mean damages from natural gas at $.0016 per kWh compared to $.032 per kWh for coal, an order of magnitude better.
Natural gas is not universally loved. The recently-developed hydraulic fracturing (fracking) extraction process has made U.S. gas production more affordable but has generated criticism on environmental grounds — see my article titled Is Fracking Environmentally Sound?
A recent report from McKinsey & Company predicts that 3 billion more middle-class consumers will join the world economy between now and 2030. To get some perspective on what that means, consider that the world today only has 1.8 billion in the middle class. Those new members of the middle class are going to demand energy for electricity and transportation. This will require an expanded supply of resources, says McKinsey, including the increasing extraction of shale gas.
Is This CO2 Rule Carved in Stone?
Just to note: The standard released by the EPA on March 27 is a “Proposed Rule,” meaning that it isn’t carved in stone. When federal agencies make rules like this, part of the process is to publish a Proposed Rule in the Federal Register, then allow a period for public comment, usually 60 days. In practice, most Proposed Rules do become Final Rules, with perhaps minor modifications based on comments from the public. (For more information on Federal rulemaking, the Federal Office of Information and Regulatory Affairs provides a Reg Map that outlines the process.)
The EPA’s new standard has encountered legal challenges, which are working their ways through the court system. Writing for InsideClimate News, Elizabeth McGowan says that a group of petitioners has challenged EPA’s 2009 endangerment finding and the agency’s authority to promulgate these new regulations under the Clean Air Act. Dozens of lawsuits by the petitioners have been consolidated under the name Coalition for Responsible Regulation v. EPA. McGowan writes that:
The list of petitioners includes coal-burning utilities, coal companies and affiliated trade associations, oil companies, trade groups for steel, cement and homebuilders, agribusiness interests, organizations that deny the science of climate change, and Republican politicians connected with the Tea Party.
Interestingly, a petition from Peabody Energy Company, one of the plaintiffs, references the controversy generated over the release of hacked e-mail and other information in 2009 from the University of East Anglia’s (UEA) Climate Research Unit, an incident that climate-change critics dubbed “Climategate.” The revelations, Peabody claims, call into question the validity of the findings of the Intergovernmental Panel on Climate Change (IPCC), which form the research basis for EPA’s analysis and rulemaking. Peabody asserts that “the analytical process in which EPA engaged in reaching its Endangerment Finding is so tainted by the flaws now revealed in the IPCC reports that the Agency must take the unusual step of convening full evidentiary hearings in order to provide an open and fair reconsideration process.”
Like everything having to do with climate change, the flap over the UEA emails has become hopelessly confused because of the bias of most people writing about it, so I included an overview of the controversy in my article The Climate Change Controversy – What’s It Really About?
McGowan interviewed Jeff Holmstead, an attorney with the Washington law office of Bracewell & Giuliani and a former EPA administrator. Holmstead told McGowan he is following Coalition for Responsible Regulation v. EPA closely. He thinks it is unlikely that the petitioners will be able to knock down the endangerment finding, but that they could “score some victories” on other issues. He tells McGowan, “This case is unlikely to be a complete win or a complete loss for either side.”