EPA UNVEILS RETOOLED CARBON STANDARDS FOR NEW PLANTS

Sets Separate Rules for Coal and Gas; Lists CCS as ‘Best System of Emission Reduction’

Tamar Hallerman
GHG Monitor
9/20/13

The Environmental Protection Agency unveiled a retooled carbon pollution rule for new power plants today that, as expected, sets separate CO2 emissions standards for coal and gas units and provides incentives for plant developers to install carbon capture and storage technology. The highly-anticipated proposal establishes four different emissions limits for power plants depending on the type of unit:

• Coal-fired units – 1,100 lbs CO2/MWh over a 12-month operating period;
• Coal-fired units that choose to average their emissions over a seven-year period – 1,000 to 1,050 lbs CO2/MWh over that 84-month operating period;
• Gas-fired turbines larger than 850 mmBtu/hr – 1,000 lbs CO2/MWh; and
• Gas-fired turbines smaller than 850 mmBtu/hr  – 1,100 lbs/MWh

EPA retooled the standards after receiving what it said were more than 2.5 million public comments on its initial April 2012 proposal, which set a technology-neutral emissions performance standard of 1,000 lbs CO2/MWh. EPA rescinded that old proposal today in light of the new standards, announced in June as part of President Obama’s climate action plan. “We are very confident that the carbon pollution standards that we are proposing today for new power plants are both flexible and achievable. They pave a path forward for the next generation of power plants in this country,” EPA Administrator Gina McCarthy told reporters during a Sept. 20 press conference.

‘Best System of Emission Reduction’

EPA lists CCS as the “best system of emission reduction” in the text of the proposed rule, citing four power-generation CCS projects it says are currently under construction (Kemper County, Boundary Dam, Texas Clean Energy Project and Hydrogen Energy California) as evidence that the technology as readily available and commercially feasible. The rulemaking states that power plant operators would only need to install “partial” carbon capture in order to achieve the emissions standards. “Among other things, partial capture provides meaningful emission reductions, it has been adequately demonstrated to be technically feasible, it can be implemented at a reasonable cost, and it promotes deployment and further development of the technology,” the rule states. An EPA official said that most coal units need only apply 30 to 50 percent capture in order to meet the standards.

In order to incentivize developers to install CCS technology, EPA said it would allow plant operators the option of a seven-year emissions averaging period. “What we recognized is that CCS may present a challenge out of the gate in terms of whether or not you understand how to operate it effectively … so we gave [operators the] flexibility to go to a slightly lower standard for the opportunity to have seven years to make the system right for you,” McCarthy said. “That should be plenty of time given that CCS is already technically feasible, it’s already available and it’s being constructed today.” The seven year time frame is shorter than an initial 30-year averaging period included as part of EPA’s original April 2012 proposal.

The agency will be accepting public comments on the new proposal for 60 days after it is published in the Federal Register. A senior EPA official told reporters today that EPA also plans on holding a public meeting on the rule in the near future.

Opponents Line Up Against Proposal

EPA’s new proposal quickly drew criticism from business and fossil fuel industry groups, who argued that the standards, if finalized, would have little impact on climate change while hurting the economy. “The only impact that today’s announced rule will have is on the pocketbooks of American consumers who will pay skyrocketing electricity costs while the White House follows a failed German model to direct the U.S. economy away from our affordable and abundant coal and natural gas resources to expensive and unreliable renewables,” said Thomas Pyle, president of the Institute for Energy Research, which is funded by fossil fuel groups. American Coalition for Clean Coal Electricity President Mike Duncan said EPA’s proposal is “misguided” because it would “halt the development of CCS technologies.” “The EPA’s proposal confirms the administration is talking out of both sides of its mouth when it comes to meaningful, long-term energy policy. Despite their talk about an ‘all of the above’ approach to energy, the EPA is banning the construction of modern coal plants resulting in fewer fuel choices in the market,” he said in a statement. 

National Mining Association President Hal Quinn said the standards were “arbitrary” and based on “unproven” technologies. “The more responsible course for the administration is to base standards on the best-in-class technology available today,” he added. “This would ensure the reliability of electricity supply by allowing power companies to replace older, less efficient plants with newer, more efficient ones.” Pyle also questioned whether CCS is commercially available. “The power plants EPA cites to prove its point have received millions of dollars in federal subsidies. To use federally-funded pilot programs as the basis for a universal standard for America’s baseload electricity supply is not only foolish, it is possibly illegal,” Pyle said.

Supporters Tout Public Health Benefits

Environmental and public health groups, though, were quick to voice their support of the measure, despite portions being scaled back from the EPA’s original proposal. “The EPA’s proposed carbon pollution protections today show that President Obama is serious about fighting climate disruption,” Executive Director of the Sierra Club Michael Brune said in a statement. “By proposing standards for carbon pollution from plants that will be built in the future, the EPA is setting the stage for the next generation of America’s power plants to be the least toxic and most modern in the world,” said Harold Wimmer, president of the American Lung Association. “It makes no sense to allow power plants to emit unlimited amounts of carbon pollution into the air.”

Others expressed measured optimism that the proposal could help further drive developments and cost reductions for CCS technologies. “This could provide an important regulatory incentive for scaling up the carbon capture and storage technologies that will allow continued use of coal in a carbon-constrained world. In evaluating the proposal, we will carefully consider how effectively it can help advance CCS, and whether other incentives are needed,” Eileen Claussen, president of the Center for Climate and Energy Solutions, said in a statement. Sen. Jay Rockefeller (D-W.Va.), who generated headlines last year for a notable floor speech in which he slammed his state’s coal industry for failing to modernize and invest in clean coal technologies, said EPA’s proposed standards should be a “call to action” for West Virginia. “These rules will only work if we act now to strengthen our investment in clean coal technology and to advance public-private partnerships more seriously than ever. We need everyone with a stake in clean coal to come together for these solutions to become a reality,” Rockefeller said in a statement.

Killing Coal?

During her speech today, McCarthy questioned the idea floated by coal industry groups that the proposal, if finalized, would act as a defacto ban on coal-fired power. “Clearly not. CCS is a technology that’s feasible and available today. We know that because it’s been demonstrated and it’s being constructed on real facilities today. Not just unconventional facilities, but coal facilities,” McCarthy said. “I think the coal industry and their investors have known that there needs to be a certain pathway forward for coal to be successful now and into the future. I believe that this proposal, rather than killing future coal, actually sets out a certain pathway forward for coal to continue to be part of the diverse mix in this country.”