Released April 26, 2024 | SUGAR LAND
en
Written by John Egan for Industrial Info Resources (Sugar Land, Texas)--The U.S. Environmental Protection Agency (EPA) (Washington, D.C.) released four finalized rules Thursday that could fundamentally revamp U.S. electricity generation by sharply reducing allowable emissions from existing coal-fired power plants as well as future gas-fired generators. A separate rule, covering emissions from existing gas-fired generators, is expected later this year.
The new suite of rules come as utilities have raised concerns about their ability to keep the lights on in the face of surging electric demand created by data centers, cryptocurrency mining and artificial intelligence. For more on that, see April 25, 2024, article - Data Centers, Oil & Gas Industry to Drive Surge in Texas Electricity Demand; April 24, 2024, article - Georgia Power Gets OK for New Resources to Meet Demand; April 23, 2024, article - Data Center Activity Propels Virginia to $12.7 Billion of Projects Under Construction; and April 16, 2024, article - Data Center Construction Propels Electric Load Growth and Utility Capex.
The EPA's four finalized rules were blasted by energy groups and Republican elected officials. Weeks before the rules were released, the Republican attorney general of West Virginia promised to file a lawsuit to block the implementation of the rules.
But a variety of Democratic lawmakers, environmental groups and public health officials welcomed the rules.
The four rules that were finalized Thursday were issued under various federal statutes, including the Clean Air Act, Clean Water Act and Resource Conservation and Recovery Act, the EPA said. If they withstand court challenges, the agency said the rules would "significantly reduce climate, air, water and land pollution from the power sector, delivering on the Biden-Harris Administration's commitment to protect public health, advance environmental justice, and confront the climate crisis."
In a statement, EPA described the four finalized rules this way:
Under the CO2 rule, coal-fired power plants that are scheduled to operate through or beyond 2039 must reduce their greenhouse emissions 90% by 2032. Plants that are scheduled to close by 2039 would have to reduce their emissions 16% by 2030. Coal-fired generators that retire before 2032 would not be subject to the CO2 rule.
Existing coal plants and future gas plants can continue operating past 2039 if they install carbon capture, sequestration and usage (CCUS) technology, the agency said. That technology is expensive and not widely used at commercial scale in power plants.
Regarding CCUS, the agency wrote in its Federal Register filing that it was the Best System of Emissions Reduction (BESR): CCUS "is an adequately demonstrated technology that achieves significant emissions reduction and is cost-reasonable, taking into account the declining costs of the technology and a substantial tax credit available to sources."
The agency estimated that the rule would cost industries $19 billion to comply between now and 2047 but said the economic benefits during the same time period would be far greater. By stopping pollution from reaching the atmosphere, the regulation would help prevent $270 billion in damage to the economy from floods, wildfires, droughts, supply-chain disruptions and increased commodity costs linked to climate change, the EPA estimated.
It added that the first rule also would prevent other pollutants, such as soot, from escaping into the air, resulting in $120 billion in public health benefits between now and 2047. In 2035 alone, the EPA projects that the rule will prevent up to 1,200 premature deaths, 870 hospital and emergency room visits, 360,000 asthma attacks, 48,000 school absence days and 57,000 lost workdays.
In a statement, EPA Administrator Michael Regan said: "Today, EPA is proud to make good on the Biden-Harris Administration's vision to tackle climate change and to protect all communities from pollution in our air, water, and in our neighborhoods. By developing these standards in a clear, transparent, inclusive manner, EPA is cutting pollution while ensuring that power companies can make smart investments and continue to deliver reliable electricity for all Americans."
The American Petroleum Institute (API) (Washington, D.C.) was one of several energy trade groups that blasted the new rules. API Senior Vice President of Policy, Economics and Regulatory Affairs Dustin Meyer said, "At a time of rapid energy demand growth, we need policies that harness all of America's resources, including natural gas and renewables, to power our future economy and help ensure energy is affordable for families and businesses."
"We remain concerned that EPA's final rule fails to properly consider grid reliability and the need for new natural gas plants to maintain that reliability. The administration should instead focus on removing barriers to building new generation capacity and fixing our broken permitting process to allow for the development of critical infrastructure--including carbon capture and hydrogen technologies--to keep the lights on for the American people."
A more measured response came from the Edison Electric Institute (EEI) (Washington, D.C.), which represents investor-owned electric utilities. The group highlighted concerns over electric reliability and the availability of CCUS technology.
In a statement, EEI President and Chief Executive Dan Brouillette noted that "affordable, reliable, and resilient clean energy is essential for America's economic security." He thanked the EPA for "developing a clear, continued path for the transition to cleaner resources," and added he supported the agency's efforts. He said the group appreciated EPA's efforts to "align compliance deadlines to help companies make informed resource planning decisions that minimize customer costs."
But Brouillette said the electric trade group was "disappointed that the agency did not address the concerns we raised about CCUS, which "is not yet ready for full-scale, economy-wide deployment, nor is there sufficient time to permit, finance, and build the CCUS infrastructure needed for compliance by 2032."
He added that carbon emissions from the U.S. electric power sector are now as low as they were nearly 50 years ago, while electricity use has more than doubled. The EEI chief said his members were "committed to building on this progress, while maintaining customer reliability and assuring affordability, and we must have durable regulatory frameworks in place to do so."
Republican elected officials also criticized the rules package. U.S. Senator Shelley Moore Capito (W.Va.) said she plans to introduce a resolution to repeal the greenhouse gas standards. "The administration has chosen to press ahead with its unrealistic climate agenda that threatens access to affordable, reliable energy for households and employers across the country," she said in a statement.
Democratic elected officials, many environmental organizations and public health experts praised the new suite of rules.
"The new rules to clean up air pollution from power plants are good news for everyone, especially if there is a power plant near where you work, live or study," said Harold Wimmer, President and chief executive officer of the American Lung Association (Chicago, Illinois). "Burning fossil fuels in power plants harms people's lungs, makes kids sick and accelerates the climate crisis. The stronger clean air and climate protections will save lives."
U.S. Senator Tom Carper (D-Del.), chair of the Senate Environment and Public Works Committee, praised the agency's work. "Today, EPA is taking historic steps forward to reduce harmful pollution from power plants in our air, land and water. I applaud EPA for setting achievable standards with reasonable compliance deadlines to reduce carbon pollution from existing coal-fired plants and newly built natural gas-fired plants. And the updates to the standards for Mercury and other air toxics will enable the agency to further reduce emissions of heavy metals from power plants, which are particularly harmful to children's health.
The New York Times quoted Jody Freeman, who directs the Environmental and Energy Law Program at Harvard Law School, as saying she thinks the rule is on solid legal ground because EPA lawyers crafted it to comply with the U.S. Supreme Court's 2022 decision and the Clean Air Act. But it is difficult to predict what the conservative justices will decide, she said, adding "The Supreme Court will do what it wants, and it's shown a particular hostility to EPA rules."
The nation currently has no CO2 emission standard for power plants, despite nearly a decade of effort by Democratic presidents Barack Obama and Joe Biden. Obama's first attempt was blocked by the U.S. Supreme Court in 2016. A successor plan was offered by then-President Donald Trump in 2019, but a federal appeals court vacated that rule on the last day of Trump's presidency. In 2022, the Biden administration's first effort to enact a CO2 emissions rule was shot down by the U.S. Supreme Court.
Using various rationales, the Supreme Court has been skeptical of the EPA's regulatory authority to police CO2 emissions. In its 6-3 ruling in 2022 in West Virginia v. EPA, the court said the rule, as proposed by Biden's EPA, ran afoul of the "major questions" doctrine, which held that in the absence of an explicit grant of authority from Congress, regulatory agencies lacked the authority to issue rules that would significantly affect the economy. For more on that, see July 1, 2022, article - Supreme Court Kicks Clean Air Case Back to EPA.
But Congress may have found a way around the court's "major questions" objection: Several weeks after the court's 2022 decision, Congress passed, and the president signed into law, the Inflation Reduction Act, which for the first time defined CO2 as an air pollutant that can be regulated under the federal Clean Air Act. This definition would seem to directly address, and potentially overcome, the U.S. Supreme Court "major questions" objection, contained in its decision in West Virginia v. EPA.
Donald Trump, the presumptive Republican nominee for president, said he would repeal this suite of finalized regulations.
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) platform 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).
The new suite of rules come as utilities have raised concerns about their ability to keep the lights on in the face of surging electric demand created by data centers, cryptocurrency mining and artificial intelligence. For more on that, see April 25, 2024, article - Data Centers, Oil & Gas Industry to Drive Surge in Texas Electricity Demand; April 24, 2024, article - Georgia Power Gets OK for New Resources to Meet Demand; April 23, 2024, article - Data Center Activity Propels Virginia to $12.7 Billion of Projects Under Construction; and April 16, 2024, article - Data Center Construction Propels Electric Load Growth and Utility Capex.
The EPA's four finalized rules were blasted by energy groups and Republican elected officials. Weeks before the rules were released, the Republican attorney general of West Virginia promised to file a lawsuit to block the implementation of the rules.
But a variety of Democratic lawmakers, environmental groups and public health officials welcomed the rules.
The four rules that were finalized Thursday were issued under various federal statutes, including the Clean Air Act, Clean Water Act and Resource Conservation and Recovery Act, the EPA said. If they withstand court challenges, the agency said the rules would "significantly reduce climate, air, water and land pollution from the power sector, delivering on the Biden-Harris Administration's commitment to protect public health, advance environmental justice, and confront the climate crisis."
In a statement, EPA described the four finalized rules this way:
- Baseload existing coal-fired and future natural gas-fired power plants will have to reduce their carbon dioxide (CO2) emissions 90%.
- The Mercury and Air Toxics Standards (MATS) for coal-fired power plants was strengthened and updated in a second rule that lowered the emissions standard for toxic metals by 67%. Mercury emissions from lignite-fired power plants would be cut by 70%.
- The third rule would reduce pollutants discharged through wastewater from coal-fired power plants by more than 660 million pounds per year.
- The fourth rule would require the safe management of coal ash that is placed in areas that were unregulated at the federal level until now, including at previously used disposal areas that may leak and contaminate groundwater.
Under the CO2 rule, coal-fired power plants that are scheduled to operate through or beyond 2039 must reduce their greenhouse emissions 90% by 2032. Plants that are scheduled to close by 2039 would have to reduce their emissions 16% by 2030. Coal-fired generators that retire before 2032 would not be subject to the CO2 rule.
Existing coal plants and future gas plants can continue operating past 2039 if they install carbon capture, sequestration and usage (CCUS) technology, the agency said. That technology is expensive and not widely used at commercial scale in power plants.
Regarding CCUS, the agency wrote in its Federal Register filing that it was the Best System of Emissions Reduction (BESR): CCUS "is an adequately demonstrated technology that achieves significant emissions reduction and is cost-reasonable, taking into account the declining costs of the technology and a substantial tax credit available to sources."
The agency estimated that the rule would cost industries $19 billion to comply between now and 2047 but said the economic benefits during the same time period would be far greater. By stopping pollution from reaching the atmosphere, the regulation would help prevent $270 billion in damage to the economy from floods, wildfires, droughts, supply-chain disruptions and increased commodity costs linked to climate change, the EPA estimated.
It added that the first rule also would prevent other pollutants, such as soot, from escaping into the air, resulting in $120 billion in public health benefits between now and 2047. In 2035 alone, the EPA projects that the rule will prevent up to 1,200 premature deaths, 870 hospital and emergency room visits, 360,000 asthma attacks, 48,000 school absence days and 57,000 lost workdays.
In a statement, EPA Administrator Michael Regan said: "Today, EPA is proud to make good on the Biden-Harris Administration's vision to tackle climate change and to protect all communities from pollution in our air, water, and in our neighborhoods. By developing these standards in a clear, transparent, inclusive manner, EPA is cutting pollution while ensuring that power companies can make smart investments and continue to deliver reliable electricity for all Americans."
The American Petroleum Institute (API) (Washington, D.C.) was one of several energy trade groups that blasted the new rules. API Senior Vice President of Policy, Economics and Regulatory Affairs Dustin Meyer said, "At a time of rapid energy demand growth, we need policies that harness all of America's resources, including natural gas and renewables, to power our future economy and help ensure energy is affordable for families and businesses."
"We remain concerned that EPA's final rule fails to properly consider grid reliability and the need for new natural gas plants to maintain that reliability. The administration should instead focus on removing barriers to building new generation capacity and fixing our broken permitting process to allow for the development of critical infrastructure--including carbon capture and hydrogen technologies--to keep the lights on for the American people."
A more measured response came from the Edison Electric Institute (EEI) (Washington, D.C.), which represents investor-owned electric utilities. The group highlighted concerns over electric reliability and the availability of CCUS technology.
In a statement, EEI President and Chief Executive Dan Brouillette noted that "affordable, reliable, and resilient clean energy is essential for America's economic security." He thanked the EPA for "developing a clear, continued path for the transition to cleaner resources," and added he supported the agency's efforts. He said the group appreciated EPA's efforts to "align compliance deadlines to help companies make informed resource planning decisions that minimize customer costs."
But Brouillette said the electric trade group was "disappointed that the agency did not address the concerns we raised about CCUS, which "is not yet ready for full-scale, economy-wide deployment, nor is there sufficient time to permit, finance, and build the CCUS infrastructure needed for compliance by 2032."
He added that carbon emissions from the U.S. electric power sector are now as low as they were nearly 50 years ago, while electricity use has more than doubled. The EEI chief said his members were "committed to building on this progress, while maintaining customer reliability and assuring affordability, and we must have durable regulatory frameworks in place to do so."
Republican elected officials also criticized the rules package. U.S. Senator Shelley Moore Capito (W.Va.) said she plans to introduce a resolution to repeal the greenhouse gas standards. "The administration has chosen to press ahead with its unrealistic climate agenda that threatens access to affordable, reliable energy for households and employers across the country," she said in a statement.
Democratic elected officials, many environmental organizations and public health experts praised the new suite of rules.
"The new rules to clean up air pollution from power plants are good news for everyone, especially if there is a power plant near where you work, live or study," said Harold Wimmer, President and chief executive officer of the American Lung Association (Chicago, Illinois). "Burning fossil fuels in power plants harms people's lungs, makes kids sick and accelerates the climate crisis. The stronger clean air and climate protections will save lives."
U.S. Senator Tom Carper (D-Del.), chair of the Senate Environment and Public Works Committee, praised the agency's work. "Today, EPA is taking historic steps forward to reduce harmful pollution from power plants in our air, land and water. I applaud EPA for setting achievable standards with reasonable compliance deadlines to reduce carbon pollution from existing coal-fired plants and newly built natural gas-fired plants. And the updates to the standards for Mercury and other air toxics will enable the agency to further reduce emissions of heavy metals from power plants, which are particularly harmful to children's health.
The New York Times quoted Jody Freeman, who directs the Environmental and Energy Law Program at Harvard Law School, as saying she thinks the rule is on solid legal ground because EPA lawyers crafted it to comply with the U.S. Supreme Court's 2022 decision and the Clean Air Act. But it is difficult to predict what the conservative justices will decide, she said, adding "The Supreme Court will do what it wants, and it's shown a particular hostility to EPA rules."
The nation currently has no CO2 emission standard for power plants, despite nearly a decade of effort by Democratic presidents Barack Obama and Joe Biden. Obama's first attempt was blocked by the U.S. Supreme Court in 2016. A successor plan was offered by then-President Donald Trump in 2019, but a federal appeals court vacated that rule on the last day of Trump's presidency. In 2022, the Biden administration's first effort to enact a CO2 emissions rule was shot down by the U.S. Supreme Court.
Using various rationales, the Supreme Court has been skeptical of the EPA's regulatory authority to police CO2 emissions. In its 6-3 ruling in 2022 in West Virginia v. EPA, the court said the rule, as proposed by Biden's EPA, ran afoul of the "major questions" doctrine, which held that in the absence of an explicit grant of authority from Congress, regulatory agencies lacked the authority to issue rules that would significantly affect the economy. For more on that, see July 1, 2022, article - Supreme Court Kicks Clean Air Case Back to EPA.
But Congress may have found a way around the court's "major questions" objection: Several weeks after the court's 2022 decision, Congress passed, and the president signed into law, the Inflation Reduction Act, which for the first time defined CO2 as an air pollutant that can be regulated under the federal Clean Air Act. This definition would seem to directly address, and potentially overcome, the U.S. Supreme Court "major questions" objection, contained in its decision in West Virginia v. EPA.
Donald Trump, the presumptive Republican nominee for president, said he would repeal this suite of finalized regulations.
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) platform 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).
