MINING ASSOC. HEAD: GHG PERFORMANCE STANDARDS ‘BAD POLICY’

Tamar Hallerman
GHG Monitor
2/1/13

The Environmental Protection Agency’s proposed greenhouse gas emission performance standards are “bad public policy” because they dismiss advanced coal technologies like integrated gasification combined cycle (IGCC), the head of one of Washington’s most influential coal lobbying groups said this week. National Mining Association CEO Hal Quinn told reporters Jan. 28 that EPA’s New Source Performance Standards (NSPS), as proposed last March, are a poor way to reform the coal industry because they drive electricity generators to natural gas instead of providing a path forward for coal technologies with lower emissions, he said. It’s “another classic example of bad public policy that shows little ambition in terms of technology development,” he said.

NSPS, which tops NMA’s list of issues to watch in 2013, is illegal because it sets a standard that only a natural gas combined cycle unit can meet, Quinn said. “It is unprecedented and in our view unlawful,” he said, echoing remarks he made in a speech last month. According to Quinn, enacting the rulemaking as is would force U.S. electricity generators to forgo coal technologies like IGCC, which he said are up to 40 percent more efficient than most coal plants in the country’s current fleet. Those utilities would then lose that operational leadership to companies in nations like China that have embraced the technology. “We’re losing the opportunity to get the operational experience and excellence to develop and operate that technology that we can later use to ship overseas,” he said. “It would also be the platform for newer and cleaner technologies including carbon capture and utilization.”

Quinn touted the IGCC technologies being used in projects currently under development by Duke and Mississippi Power. “It’s really a failure in ambition by saying ‘let’s just write off the current technologies that could come online and pay both economic and environmental dividends and also serve as a platform for testing future technologies,” he added.

EPA Expected to Finalize NSPS Soon

In response to a settlement agreement, EPA proposed the standards in March 2012 and is expected to finalize the rulemaking this spring. NSPS as proposed would limit emissions from new fossil fuel-fired power plants to 1,000 lbs per MWh, roughly on par with the emissions level of a natural gas combined cycle unit. In order to comply with the rulemaking, electricity generators could switch to zero-emissions fuels or efficient natural gas generation, according to EPA. Unit operators could also install carbon capture and storage technology to comply, according to EPA. In order to incentivize CCS, EPA said operators could choose to average the emissions of a unit over a 30-year period. Under that pathway, operators could build a new unmitigated coal unit during the first decade of operation and later add CCS and emit less for the remaining 20 years.

At the time of the rule’s release, EPA Administrator Lisa Jackson said the averaging pathway would allow for CCS technology to be commercialized so that utilities could install it as a cost-effective way to comply with the standard. “CCS is on the path to being viable,” Jackson said at the time. “It is being permitted and built and demonstrated today, and it will become increasingly used.”

But most coal industry officials have argued that the regulations will do the opposite and instead drive electricity generators to natural gas since CCS is not yet economic, even with the 30-year averaging provision in place. “In effect, what EPA’s rule does is eliminate any new coal for years to come because EPA is requiring new coal-fueled power plants to meet a natural gas equivalent CO2 standard before CCS is commercially available,” CONSOL Energy Vice President Steve Winberg, who is also chairman of the board of the FutureGen Alliance, told House members at a June hearing.