EPA to propose cutting carbon dioxide emissions from coal plants up to 30 percent
The Environmental Protection Agency will propose a regulation today that will cut carbon dioxide emissions from existing coal plants by up to 30 percent, compared with 2005 levels, by 2030, according to individuals who have been briefed on the plan and asked for anonymity because it has not been formally announced.
The draft rule would give states and utilities four options of how to meet the new standard, with different emphases on energy efficiency, shifting from coal to natural gas, investing in renewable energy and discounts to encourage consumers to move to off-peak hours.
The rule represents one of the most significant steps the federal government has ever taken to curb the nation’s greenhouse gas emissions, which are linked to climate change, and the draft is sure to spark a major political and legal battle. Conscious of that, President Obama called a group of Senate and House Democrats yesterday afternoon to thank them for their support in advance of the proposed rule, according to a White House official who asked for anonymity in order to discuss private conversations with lawmakers.
Ever since a climate bill stalled in the Senate four years ago, environmental and public health activists have been pressing Obama to use his executive authority to impose carbon limits on the power sector, which accounts for 38 percent of the nation’s carbon dioxide emissions. Opponents, including coal producers, some utilities and many Republicans, argue that the EPA is using a novel legal approach to demand stringent greenhouse gas cuts that are not achievable given current technology.
It is unclear whether the proposal ranks as Obama’s most sweeping climate policy, because the plan would cut 500 million metric tons of carbon dioxide by 2030. Previous measures to strengthen fuel efficiency standards for cars and light trucks will cut 2.9 billion metric tons by 2050.
“This momentous development raises the bar for controlling carbon emissions in the United States,” said Andrew Steer, president of the World Resources Institute. Steer said that “many states are well-positioned to meet or exceed the proposed carbon reductions through existing infrastructure and policies that are already in place.” And he said that “the proposed standards give states flexibility to implement plans according to their needs.”
The Wall Street Journal first reported details of the rule yesterday afternoon.
Much of the electricity sector’s carbon pollution stems from aging, coal-fired power plants. The average U.S. coal plant is 42 years old, according to the EPA, meaning that most of them aren’t nearly as efficient as new ones, though many have been updated. Some were built when Dwight D. Eisenhower was president, according to Exelon chief executive Christopher Crane.
The regulations could also affect natural-gas-fired power plants, which emit about half as many greenhouse gases as coal plants. The EPA said that natural-gas-fired combined cycle plants in the United States are 14 years old on average.
The EPA plan resembles proposals made by the Natural Resources Defense Council, which would allow states and companies to employ a variety of measures – including new renewable energy and energy efficiency projects “outside the fence,” or away from the power plant site – to meet their carbon reduction target. This approach aims to keep consumer electricity prices from rising too sharply as a result.
Usually when the EPA regulates pollutants under the Clean Air Act, the agency sets an emissions limit for each facility. By contrast, under a “mass-based system,” states would have to meet an overall target for greenhouse-gas emissions and ensure that power plants either make those reductions at their facilities or finance efforts to achieve them in other ways, such as by reducing consumer energy demand or investing in carbon-free electricity generation.
Meeting the EPA targets might not be difficult for states that have cut carbon-dioxide emissions in the electricity sector or that have been meeting their own renewable energy standards. Since the EPA proposed baseline year of 2005, 13 states and the District of Columbia have cut carbon emissions by about 30 percent or more, according to a Sierra Club compilation of Energy Information Administration data.
Daniel Fiorino, who directs American University’s Center for Environmental Policy, said in an interview that using this approach is “a really nice example of smarter regulation” because it gives firms and state regulators greater leeway in how they would meet a federal standard.
But Fiorino, who worked at the EPA for 31 years and served as associate director of the agency’s office of policy analysis, added, “When you have flexibility, there’s potentially more room for a legal challenge.”
Several coal industry and business officials have questioned the administration’s approach, saying it will cost coal miners their jobs and could lead to electricity shortages. The Electric Reliability Coordinating Council, a lobbying group that represents energy companies with major investments in coal-fired power plants, has prepared an analysis that cites a study estimating that a phase-out of coal plants could cost consumers $13 billion to $17 billion a year between 2018 and 2033.
“There are no off-the-shelf technologies to address carbon, only fuel-switching regardless of expense or energy rationing,” the group wrote.
Scott Segal, a government relations and communications specialist at the Washington-based law firm Bracewell & Giuliani, who has been working with the council, said the proposed rule “is likely to be expensive, controversial and intrusive for households and small businesses.”
The U.S. Chamber of Commerce has commissioned a separate study, projecting that the proposed rule could cost the U.S. economy an average of $50 billion a year during the next 16 years.
Supporters of the administration’s proposal, meanwhile, argue that it will save Americans money because of the public-health benefits that result from cutting power plants’ soot and smog-forming pollutants. Moreover, they say, renewable energy has become increasingly competitive with fossil fuels.
A joint study by the Harvard School of Public Health and Syracuse University Center for Health and the Global Environment found that a carbon limit on existing plants would reduce these facilities’ sulfur dioxide and mercury by up to 27 percent and their nitrogen oxides by up to 22 percent by 2020. These conventional pollutants contribute to asthma, other lung diseases and heart attacks.
Michael Brune, executive director of the environmental advocacy group Sierra Club, noted in an interview that a spokesman for the Colorado-based utility Xcel Energy explained that his company was expanding its investments in solar and wind power because they are the “most cost-effective and most reliable.”
The American Wind Energy Association, which also supports a federal carbon cap on existing plants, recently published a study that found that rates declined over the past five years in the 11 states that use the most wind, while rates increased collectively in all the other states during that same time period.
Rhone Resch, president and chief executive of the Solar Energy Industries Association, said the rule will have an enormous impact because it is so different from previous air quality regulations in which power plants installed pollution controls to curb the emissions coming out of their stacks.
“This is renewable energy as a compliance technology, and that’s a huge change from what it’s been in the past,” he said. “We think that solar will be an option, one of the technologies of choice for both the utilities and the air directors of these states.”
The proposed regulations will provide new impetus for energy efficiency measures to flatten out or even lower electricity consumption. A March report by the American Council for an Energy Efficient Economy looked at efficiency programs in 20 states from 2009 to 2012 and found an average cost of 2.8 cents per kilowatt hour – about one-half to one-third the cost of alternative new electricity resource options, the group said.
A significant number of lawmakers, Republicans and some Democrats from coal-dependent states, have indicated that they will try to fight any attempt by the EPA to crack down on existing plants. Several state attorneys general have vowed to fight the proposed regulations in court.
Just last month, the House passed language in the Defense Authorization Act that would bar the Pentagon from analyzing how climate change will affect national security.
While White House officials have indicated that Obama would veto any attempt to override his proposal to regulate these facilities, Democrats will still have to defend this policy on the campaign trail in conservative states this fall. Last week Republicans began pressuring Kentucky Democratic Senate candidate Alison Lundergan Grimes to return campaign donations from Frances Beinecke, president of the NRDC, and her husband.
Democratic officials are trying to rally the president’s supporters around the EPA proposed rule. Business Forward, a group affiliated with the White House, has scheduled a call this afternoon with White House counselor John Podesta so he can explain the plan to corporate allies.
And Organizing For Action Chairman Jim Messina sent out a pitch Saturday to his group with the tagline, “This is huge,” urging members to sign an online petition backing the proposal before it was unveiled.
“As I write this, powerful interests on the other side are lining up their dirty budgets to try to tear this down. They have plenty of allies in Congress that will try to stop us,” Messina wrote. “I’m asking everyone who cares about this fight to stand up and say so today – stand with President Obama and new carbon pollution standards.”