Industries Push Back on EPA Power Plant Rule
The rumblings began in 2012, when the Environmental Protection Agency (EPA) set in motion a plan to reduce greenhouse gas (GHG) emissions from existing power plants, in keeping with the Clean Air Act, by proposing a new source performance standard (NSPS) for carbon dioxide (CO2) emissions for fossil fuel-fired electric utility generating units.
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They intensified in January 2014, when EPA announced revised standards, separate from those for integrated gasification combined cycle, based on partial implementation of carbon capture and storage/sequestration (CCS) as the best system of emission reduction (BSER). EPA based this action on its conclusion that natural gas technology is cleaner and more efficient than—and thus superior to—coal-burning technology.
The sound grew to a roar on June 2, 2014, after EPA released its Clean Power Plan Proposed Rule. In it, EPA proposes emission guidelines and state-specific rate-based goals for CO2 emissions from the power sector. The proposal intends to reduce CO2 emissions from power plants by 30% from 2005 levels by 2030, an amount EPA says is the equivalent of taking two-thirds of the nation’s cars and trucks off the road.
The standards set a limit on the amount of CO2 equivalent per megawatt hour a new coal-fired power plant can emit (about 800 pounds per megawatt hour less than the amount an average plant currently produces). To meet the new regulations, most companies building or operating new coal-fired plants would have to equip them with costly CCS systems of questionable scalability.
Stakeholders anticipate the fallout
Not surprisingly, the proposed standards have generated a megaton of interest and sparked varying reactions from stakeholders in the energy, mining, manufacturing, farming and related industries. Speaking out in support of EPA’s proposal are such entities as The House Sustainable Energy and Environment Coalition, the Business Council for Sustainable Energy, the Biomass Power Association, the American Wind Energy Association, and the Alliance to Save Energy. Opposing the proposed standards are the American Farm Bureau Federation (AFBF), The American Iron and Steel Institute (AISI), the American Coalition for Clean Coal Electricity, The American Public Power Association, and the 150+ members of the Partnership for a Better Energy Future (PBEF).
The National Mining Association (NMA) found “serious deficiencies” with the proposal and said it fails to comply with Clean Air Act strictures that allow EPA to establish performance standards for new sources of energy but stipulate that those standards be “achievable” through a system of control that “has been adequately demonstrated.” NMA asserted that “EPA has failed entirely to show CCS technology is either achievable or adequately demonstrated.”
Further, NMA claimed that EPA provides no rational or legally-supportable basis for the disparate treatment of coal and gas units, and that the utility sector can achieve significant CO2 reductions from building advanced, efficient coal technologies that are technically feasible and commercially available. NMA urged EPA to adopt a different BSER standard that allows such new, higher efficiency coal units to be built.
The American Iron and Steel Institute (AISI) said that the power plant regulations “could severely harm the international competitiveness of energy-intensive, trade-exposed U.S. industries like steel” and that “additional regulation of the electric utility sector will result in increased electricity costs for industrial consumers, who ultimately have the compliance costs and risks passed on to them.”
Thomas J. Gibson, AISI president and CEO, noted that electricity is one of the most significant cost drivers for steel production and warned, “This proposal may adversely impact the affordability and reliability of the electricity
supply to major industrial consumers, which will harm workers and jobs and further impede the post-recession growth of American manufacturing.”
“Efforts to address climate change can be effective only when undertaken on a global basis,” Gibson added. He explained that, if the U.S. institutes stringent CO2 regulations, but other major steel-producing nations, such as China, don’t follow suit, steel production and manufacturing jobs will shift to other nations that allow higher GHG emission rates.
National Association of Manufacturers (NAM) President and CEO Jay Timmons responded to EPA’s proposed standard for existing power plants by noting that manufacturers have already led the way in reducing emissions through advances in technology and innovation. He predicted that EPA’s new regulations will impede future development of these technologies by limiting the domestic market and discouraging future investment.
“We need a more balanced approach,” said Timmons, “one that allows our nation’s manufacturers to do what they do best: find solutions and innovate. With the right policies that give us access to affordable and reliable energy, U.S. manufacturers will continue to develop sustainable solutions that power our economy, drive growth and, most importantly, create jobs here at home.”
Lawmakers weigh in
Indiana Governor Mike Pence vowed to fight against EPA’s plan to combat global warming by requiring power plants to reduce carbon emissions, claiming that the rules will lead to higher electric rates and lost jobs in his coal-dependent state. He said Indiana would have to find a way to put 20% less carbon pollution into the air while generating the same amount of electricity it currently produces.
Indiana gets more than 80% of its energy from coal-fired plants—about twice the national average—and those plants produce more CO2 than those in all but three other states. It has already reduced its emissions by 19% since 2005 by retiring aging coal-fired units and burning somewhat cleaner natural gas instead. Since the Clean Power Plan sets a target for the ratio of carbon generated to the amount of electricity produced, Indiana plants, which produced 1,923 pounds of carbon pollution per megawatt hour of electricity in 2012, could produce only 1,531 pounds of carbon per megawatt hour by 2030.
Nebraska U.S. Senator Mike Johanns fears that new EPA regulations regarding power plants will cause a number of problems, including for cascades and for the local and national economy. Johanns says the rules target states like Nebraska where the ratepayers would shoulder the burden of compliance because the new regulations apply especially to coal plants, from which Nebraska derives much of its electricity. He thinks manufacturers will begin to weigh the costs of the new regulations and, ultimately, of doing business in Nebraska and in the United States or moving elsewhere. He said he is joining with 40 other senators to try to block the new EPA rules.
Voters favor coal over EPA
On the heels of EPA’s Clean Power Plan announcement comes news that fewer voters than ever believe the federal agency’s actions help the economy. A new Rasmussen Reports national telephone survey found that 36% of likely U.S. voters have a favorable opinion of EPA, while 39% view it unfavorably. Another 25% are undecided.
Just 21% think the agency’s regulations and actions help the economy. That’s down from 29% last October and down from 35% in June 2011. Twice as many (41%) still believe EPA’s actions hurt the economy instead, unchanged from earlier surveys. Twenty-two percent (22%) think the agency’s regulations and actions have no economic impact, while 16% are not sure.
In September 2013, just over half (53%) of voters favored regulations to curb power plants’ CO2 emissions, although just as many (54%) agreed they will increase energy costs. Only 28% are personally willing to pay higher utility costs to reduce America’s use of coal to generate electricity.
The coal industry also remains more popular than EPA, with favorable ratings of 48%.