Released May 12, 2023 | Sugar Land
en
May 12, 2023, 2023--Written by John Egan for Industrial Info Resources (Sugar Land, Texas)--Let the litigation begin! On Thursday, the U.S. Environmental Protection Agency (EPA) (Washington, D.C.), issued a long-awaited draft rule to lower power plant emissions that contribute to global warming as well as the damage the health of people living near those plants.
Thursday's effort marks the third time under three different presidents that the EPA has tried to enact a first-ever rule limiting carbon dioxide (CO2) emissions from the power industry, which is a major emitter. For more on the history of this heavily litigated issue, see July 1, 2022, article - Supreme Court Kicks Clean Air Case Back to EPA.
"Maybe the third time is the one that succeeds," commented Britt Burt, Industrial Info's vice president of research for the Global Power Industry. "The U.S. power industry has retired over 115 gigawatts (GW) of coal-fired capacity in the 21st century, driven largely by the requirements of the Mercury and Air Toxics Standards (MATS) rule, the low price of natural gas and the growing competitiveness of non-emitting, non-dispatchable renewable generation like solar and wind. The market, prodded by regulation, has been transforming the power sector for a generation."
In its 2022 decision in West Virginia v. EPA, the U.S. Supreme Court voted 6-3 to remand to the EPA its most recent effort to regulate CO2 emissions from power plants. The court's decision invoked the "major questions doctrine," which holds, in effect, that federal administrative agencies lack authority to issue regulations that would have broad and deep economic and political consequences unless they are granted "clear congressional authorization" to do so.
But this time, there is reason to believe this draft rule could survive the all-but-certain legal challenge from coal-state Republican interests: it builds on Congress' decision last year to grant EPA explicit authority to regulate carbon dioxide emissions. That authority was inserted into the Inflation Reduction Act of 2022. For more on that, see August 24, 2022, article - U.S. Congress Defines CO2 as Pollutant.
In Thursday's draft rule, on which the EPA will take public comment for 60 days after it is published in the Federal Register, the agency is using its authority under section 111 of the Clean Air Act to propose requiring existing coal- and gas-fired generators, as well as new gas-fired generators, to lower emissions either by installing carbon capture and sequestration (CCS) technology, co-firing coal boilers with natural gas or co-firing gas boilers with low-carbon hydrogen.
In a statement accompanying the draft rules, which run more than 600 pages, the agency said the draft rule would "protect public health, reduce harmful pollutants and deliver up to $85 billion in (net) climate and public health benefits over the next two decades." It did not break out compliance costs; rather it stressed the net (benefits minus costs) financial benefits. How to calculate those benefits has sparked bitter clashes between Democrats and Republicans.
The EPA estimated that the rules, if implemented as drafted, would prevent up to 617 million metric tons of total CO2 being emitted from coal- and gas-fired power plants through 2042. It added that the reduction was the equivalent to reducing the annual emissions of 137 million passenger vehicles, roughly half the cars in the United States.
The EPA said its proposed rule would "build on the momentum already underway in the power sector to move toward a cleaner future." Since 2005, it said, the power sector has reduced CO2 emissions 36% while continuing to keep pace with growing energy demand. It said the recently enacted Inflation Reduction Act provides "historic investments in pollution control technologies and clean energy" that will help usher in a power sector that is virtually carbon-free.
Falling power plant emissions of CO2 have resulted from coal units being retired or converted to burn natural gas, which emits about half the CO2 as coal, or replaced by non-emitting solar and wind generation. Still, the power sector accounts for about 25% of the economy's CO2 emissions, slightly behind the transportation sector.
The technology-based standards EPA is proposing include:
The EPA draft rule does not mandate a specific technology for power plant operators to meet the new standards, but it specifically indicated CCS and low-carbon hydrogen for gas-fired plants. Depending on the age, size, and use of a given power plant, the rules would be phased in starting in 2030. The rules provide different standards and compliance dates depending on whether a plant is baseload, intermediate or peak.
CCS has been rarely deployed at scale in North American power plants. At the few plants where it has been deployed, it has proven to be expensive, imposes a high parasitic load on the electric output of the plant, and is sometimes unreliable.
The proposal rule also would cut tens of thousands of tons of emissions of particulate matter (PM2.5), sulfur dioxide, and nitrogen oxides, which the EPA said are known to endanger people's health, "especially in communities that for too long have disproportionally shouldered the burden of high pollution and environmental injustice."
In 2030 alone, the agency estimated, the proposed standards would prevent:
"Alongside historic investment taking place across America in clean energy manufacturing and deployment, these proposals will help deliver tremendous benefits to the American people--cutting climate pollution and other harmful pollutants, protecting people's health, and driving American innovation."
Not surprisingly, many, though not all, Democratic officials welcomed the draft rule, as did environmental groups, some of which wanted it to go farther faster. Also not surprisingly, Republican elected officials on Capitol Hill blasted the measure.
"The Clean Power Plan 2.0 announced today is the Biden administration's most blatant attempt yet to close down power plants and kill American energy jobs," Sen. Shelley Moore Capito (R., W.Va.), ranking minority member of the Senate Environment and Public Works Committee, said in a statement. "Americans are well aware that the left continues to wage war on the energy sources that actually power this nation."
Her Senate counterpart from West Virginia, Senator Joe Manchin (Democrat), chair of the Senate Energy and Natural Resources Committee, was no fan either. The New York Times reported that the coal-state senator, who faces a potentially challenging re-election campaign next year, vowed to oppose all Biden administration nominees to the EPA unless the draft rule was scrapped. In a tightly divided Senate, and where Manchin chairs the committee with jurisdiction over the EPA, among other agencies, that threat could carry significant weight.
"This administration is determined to advance its radical climate agenda and has made it clear they are hellbent on doing everything in their power to regulate coal- and gas-fueled power plants out of existence, no matter the cost to energy security and reliability," said Manchin, who has interests in a coal business.
Utility-industry officials were more measured in their response. "We will assess EPA's proposed new regulations through the lens of whether they align with our priorities and support our ability to provide customers with the reliable clean energy they need at an affordable cost," said Tom Kuhn, president of the Edison Electric Institute (EEI) (Washington, D.C.), a trade organization based in Washington that represents investor-owned utilities.
However, the Times also quoted Jim Matheson, president of the National Rural Electric Cooperative Association (NRECA) (Arlington, Virginia), as blasting the plan: "This proposal will further strain America's electric grid and undermine decades of work to reliably keep the lights on across the nation."
Desmarie Waterhouse, senior vice president of advocacy and communications and general counsel for the American Public Power Association (APA) (Washington, D.C.), which represents over 2,000 community-owned electric utilities across the U.S., said this in a statement: "APPA is currently reviewing EPA's proposed rules and will confer with members before responding via the proper channels. It's important to note that public power continues its work to reduce greenhouse gas emissions through a variety of means, and as we review the proposed rules, we do so keeping in mind that any EPA action in this area must be cost-effective, flexible, practically/technologically achievable and conscious of market trends."
IIR's Britt Burt made this comment: "The rule, if it is finalized and survives court challenges, also could also be repealed if a Republican is elected president in 2024. Some lawyers and state attorneys general have been dining out on this issue for over a decade. We don't expect that to change any time soon, whatever the ultimate outcome."
Industrial Info Resources (IIR) is the leading provider of industrial market intelligence. Since 1983, IIR has provided comprehensive research, news and analysis on the industrial process, manufacturing and energy related industries. IIR's Global Market Intelligence (GMI) helps companies identify and pursue trends across multiple markets with access to real, qualified and validated plant and project opportunities. Across the world, IIR is tracking over 200,000 current and future projects worth $17.8 Trillion (USD).
Thursday's effort marks the third time under three different presidents that the EPA has tried to enact a first-ever rule limiting carbon dioxide (CO2) emissions from the power industry, which is a major emitter. For more on the history of this heavily litigated issue, see July 1, 2022, article - Supreme Court Kicks Clean Air Case Back to EPA.
"Maybe the third time is the one that succeeds," commented Britt Burt, Industrial Info's vice president of research for the Global Power Industry. "The U.S. power industry has retired over 115 gigawatts (GW) of coal-fired capacity in the 21st century, driven largely by the requirements of the Mercury and Air Toxics Standards (MATS) rule, the low price of natural gas and the growing competitiveness of non-emitting, non-dispatchable renewable generation like solar and wind. The market, prodded by regulation, has been transforming the power sector for a generation."
In its 2022 decision in West Virginia v. EPA, the U.S. Supreme Court voted 6-3 to remand to the EPA its most recent effort to regulate CO2 emissions from power plants. The court's decision invoked the "major questions doctrine," which holds, in effect, that federal administrative agencies lack authority to issue regulations that would have broad and deep economic and political consequences unless they are granted "clear congressional authorization" to do so.
But this time, there is reason to believe this draft rule could survive the all-but-certain legal challenge from coal-state Republican interests: it builds on Congress' decision last year to grant EPA explicit authority to regulate carbon dioxide emissions. That authority was inserted into the Inflation Reduction Act of 2022. For more on that, see August 24, 2022, article - U.S. Congress Defines CO2 as Pollutant.
In Thursday's draft rule, on which the EPA will take public comment for 60 days after it is published in the Federal Register, the agency is using its authority under section 111 of the Clean Air Act to propose requiring existing coal- and gas-fired generators, as well as new gas-fired generators, to lower emissions either by installing carbon capture and sequestration (CCS) technology, co-firing coal boilers with natural gas or co-firing gas boilers with low-carbon hydrogen.
In a statement accompanying the draft rules, which run more than 600 pages, the agency said the draft rule would "protect public health, reduce harmful pollutants and deliver up to $85 billion in (net) climate and public health benefits over the next two decades." It did not break out compliance costs; rather it stressed the net (benefits minus costs) financial benefits. How to calculate those benefits has sparked bitter clashes between Democrats and Republicans.
The EPA estimated that the rules, if implemented as drafted, would prevent up to 617 million metric tons of total CO2 being emitted from coal- and gas-fired power plants through 2042. It added that the reduction was the equivalent to reducing the annual emissions of 137 million passenger vehicles, roughly half the cars in the United States.
The EPA said its proposed rule would "build on the momentum already underway in the power sector to move toward a cleaner future." Since 2005, it said, the power sector has reduced CO2 emissions 36% while continuing to keep pace with growing energy demand. It said the recently enacted Inflation Reduction Act provides "historic investments in pollution control technologies and clean energy" that will help usher in a power sector that is virtually carbon-free.
Falling power plant emissions of CO2 have resulted from coal units being retired or converted to burn natural gas, which emits about half the CO2 as coal, or replaced by non-emitting solar and wind generation. Still, the power sector accounts for about 25% of the economy's CO2 emissions, slightly behind the transportation sector.
The technology-based standards EPA is proposing include:
- Strengthening the current New Source Performance Standards (NSPS) for newly built fossil fuel-fired stationary combustion turbines (generally natural gas-fired)
- Establishing emission guidelines for states to follow in limiting carbon pollution from existing fossil fuel-fired steam electric generating units (including coal, oil and natural gas-fired units)
- Establishing emission guidelines for large, frequently used existing fossil fuel-fired stationary combustion turbines (generally natural gas-fired)
The EPA draft rule does not mandate a specific technology for power plant operators to meet the new standards, but it specifically indicated CCS and low-carbon hydrogen for gas-fired plants. Depending on the age, size, and use of a given power plant, the rules would be phased in starting in 2030. The rules provide different standards and compliance dates depending on whether a plant is baseload, intermediate or peak.
CCS has been rarely deployed at scale in North American power plants. At the few plants where it has been deployed, it has proven to be expensive, imposes a high parasitic load on the electric output of the plant, and is sometimes unreliable.
The proposal rule also would cut tens of thousands of tons of emissions of particulate matter (PM2.5), sulfur dioxide, and nitrogen oxides, which the EPA said are known to endanger people's health, "especially in communities that for too long have disproportionally shouldered the burden of high pollution and environmental injustice."
In 2030 alone, the agency estimated, the proposed standards would prevent:
- approximately 1,300 premature deaths
- more than 800 hospital and emergency-room visits
- more than 300,000 cases of asthma attacks
- more than 38,000 school absence days
- approximately 66,000 lost workdays
"Alongside historic investment taking place across America in clean energy manufacturing and deployment, these proposals will help deliver tremendous benefits to the American people--cutting climate pollution and other harmful pollutants, protecting people's health, and driving American innovation."
Not surprisingly, many, though not all, Democratic officials welcomed the draft rule, as did environmental groups, some of which wanted it to go farther faster. Also not surprisingly, Republican elected officials on Capitol Hill blasted the measure.
"The Clean Power Plan 2.0 announced today is the Biden administration's most blatant attempt yet to close down power plants and kill American energy jobs," Sen. Shelley Moore Capito (R., W.Va.), ranking minority member of the Senate Environment and Public Works Committee, said in a statement. "Americans are well aware that the left continues to wage war on the energy sources that actually power this nation."
Her Senate counterpart from West Virginia, Senator Joe Manchin (Democrat), chair of the Senate Energy and Natural Resources Committee, was no fan either. The New York Times reported that the coal-state senator, who faces a potentially challenging re-election campaign next year, vowed to oppose all Biden administration nominees to the EPA unless the draft rule was scrapped. In a tightly divided Senate, and where Manchin chairs the committee with jurisdiction over the EPA, among other agencies, that threat could carry significant weight.
"This administration is determined to advance its radical climate agenda and has made it clear they are hellbent on doing everything in their power to regulate coal- and gas-fueled power plants out of existence, no matter the cost to energy security and reliability," said Manchin, who has interests in a coal business.
Utility-industry officials were more measured in their response. "We will assess EPA's proposed new regulations through the lens of whether they align with our priorities and support our ability to provide customers with the reliable clean energy they need at an affordable cost," said Tom Kuhn, president of the Edison Electric Institute (EEI) (Washington, D.C.), a trade organization based in Washington that represents investor-owned utilities.
However, the Times also quoted Jim Matheson, president of the National Rural Electric Cooperative Association (NRECA) (Arlington, Virginia), as blasting the plan: "This proposal will further strain America's electric grid and undermine decades of work to reliably keep the lights on across the nation."
Desmarie Waterhouse, senior vice president of advocacy and communications and general counsel for the American Public Power Association (APA) (Washington, D.C.), which represents over 2,000 community-owned electric utilities across the U.S., said this in a statement: "APPA is currently reviewing EPA's proposed rules and will confer with members before responding via the proper channels. It's important to note that public power continues its work to reduce greenhouse gas emissions through a variety of means, and as we review the proposed rules, we do so keeping in mind that any EPA action in this area must be cost-effective, flexible, practically/technologically achievable and conscious of market trends."
IIR's Britt Burt made this comment: "The rule, if it is finalized and survives court challenges, also could also be repealed if a Republican is elected president in 2024. Some lawyers and state attorneys general have been dining out on this issue for over a decade. We don't expect that to change any time soon, whatever the ultimate outcome."
Industrial Info Resources (IIR) is the leading provider of industrial market intelligence. Since 1983, IIR has provided comprehensive research, news and analysis on the industrial process, manufacturing and energy related industries. IIR's Global Market Intelligence (GMI) helps companies identify and pursue trends across multiple markets with access to real, qualified and validated plant and project opportunities. Across the world, IIR is tracking over 200,000 current and future projects worth $17.8 Trillion (USD).
