Mining Execs: EPA Rules on Coal-Fired Plants Endanger Public Health

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Written by John Egan for Industrial Info Resources (Sugar Land, Texas)--Tough proposed rules on coal-burning power plants from the U.S. Environmental Protection Agency (EPA) (Washington, D.C.) will endanger public health, make electricity more scarce, and force consumers to make gut-wrenching choices between energy, food and medicine, speakers told the 2nd Annual Colorado Energy Expo last week in Denver.

EPA's Mercury and Air Toxics Standards (MATS) and the forthcoming Clean Power Plan (CPP) are "crises engineered by environmental regulators," said Stuart Sanderson, president of the Colorado Mining Association (CMA) (Denver, Colorado). "Public health declines when coal-fired power plants are closed," he added.

Sanderson's message was echoed by Bruce Watzman, senior vice president of regulatory affairs for the National Mining Association (NMA) (Washington, D.C.). He said these new rules will drive up electricity prices and "force people to choose between energy, food and medicine." U.S. electricity prices have risen 53% since 2000, he said May 13, adding: "We need to keep regulations reasonable so electricity will remain affordable and reliable."

Watzman estimated there were 100 million people receiving public assistance in the U.S. The EPA rules, which will revamp the electricity and power-plant fuels markets, will impose "monumental costs" on those least able to afford them. The rules will "replace cheap, reliable power" generated from coal with electricity generated from natural gas, whose current low costs "are not sustainable," he said.

Coal-fired generation is what kept the lights on during last year's "Polar Vortex," he told attendees. Electric demand surged in January and February 2014, as the country was plunged into bitter cold. During that time, coal generated about 89% of incremental electricity provided by American Electric Power Company (NYSE:AEP) (Columbus, Ohio), the NMA executive said. He asked, "What will happen the next time there's a polar vortex" if tens of thousands of megawatts of coal-fired capacity are shuttered by EPA regulations. A polar vortex followed by a warmer-than-average summer will increase the nation's electric bill by $100 billion, he estimated, adding that a disproportionate share of that will fall on lower-income people who are less able to absorb higher energy bills.

The NMA executive showed a U.S. map where the states with the highest retail electric prices--including Hawaii, Alaska, Connecticut, Massachusetts, California and New York--had little or no coal-fired generation. And the states with the lowest-cost electricity--including Wyoming, Kentucky and West Virginia--also had the highest percentage of coal-fired electric generation. The data was drawn from the Energy Information Administration's (EIA) (Washington, D.C.) monthly electric power report.

CMA President Sanderson said, "We have not done as good a job as we could in educating the U.S. public about the benefits of coal and the consequences of environmental regulation." Environmental regulation has cut Colorado coal production 42% over the last decade, and the U.S. Chamber of Commerce has predicted that 26,500 coal-mining jobs will be lost in the Mountain West because of government regulation.

Despite years of extensive air-quality regulations, Sanderson said cities with the 10 worst air pollution problems are located in California, a state without a single coal-fired power plant.

The NMA's Watzman cast doubt on the EPA's estimates of the cost and impact of MATS and the CPP. The agency initially estimated MATS would close about 5,000 megawatts (MW) of coal-fired capacity, but most estimates show that rule, currently being litigated before the U.S. Supreme Court, as forcing the closure of 60,000 MW to 70,000 MW by 2020. The EPA also estimated MATS would cost about $10 billion (measured in 2010 dollars), more than the combined cost of all Clean Air Act rules issued in the four decades since Congress passed that law in 1970.

And whatever the cost of MATS, it will be dwarfed by the CPP, which consultants have estimated will cost somewhere north of $400 billion, Watzman said. He said technology exists to cost-effectively reduce power-plant emissions of carbon dioxide (CO2) by 25% to 30%, and up to 90% of criteria pollutants. But he decried the CPP's effective requirement that new coal-fired power plants install expensive carbon capture & sequestration (CCS) equipment.

"It will take 10 to 15 years to commercialize that technology," Watzman said, but the Department of Energy recently defunded the FutureGen project, which sought to test one type of carbon-capture technology at commercial scale. For more on that decision, see February 6, 2015, article - U.S. Department of Energy Abandons FutureGen Clean-Coal Power Project.

"While we're turning our backs to coal, overseas they can't get enough of it," he continued. "In China, they're bringing on a new coal plant each week. And it's clean coal." In East Asia, about 139,000 MW of coal-fired generation is under construction, and another 50,000 MW is permitted. In South Asia, roughly 69,000 MW of coal-fired generation is being built now, and another 76,000 MW are permitted. Both regions have a very hefty backlog of coal plants under development.

Sanderson and Watzman agreed that coal companies will be hard-pressed to offset lost sales in the U.S. with exports to coal-hungry countries like China and India. "Exports are a potential partial solution" to the woes of coal-mining companies, "but they're not a panacea," Sanderson told attendees May 13. "There will be export opportunities, but U.S. exports will be difficult because of transportation costs."

Watzman concluded his remarks by citing comments by Southern Christian Leadership Conference (SCLC) President Charles Steele regarding the EPA regulations: "The problem with the EPA's plan is that the power plants in question often provide the largest portion of our electricity, and usually at the most affordable rates... The only tangible result will be a significant jump in the cost of electricity for both homes and businesses."

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