STAKEHOLDERS DEBATE NSPS’ ROLE IN PROMOTING CCS DURING EPA PUBLIC HEARING

Tamar Hallerman
GHG Monitor
05/25/12

The Environmental Protection Agency should tighten its emissions performance standards to mandate that all new fossil fuel-fired power plants incorporate carbon capture and storage technology, environmental groups argued this week, while industry representatives countered that the technology is not developed enough to be required via regulations. The dueling arguments were amplified this week during a pair of public hearings held by EPA regarding its recently-proposed New Source Performance Standards (NSPS) for fossil fuel-fired power generation.

Introduced in late March, the standards were part of a settlement agreement between EPA and a coalition of states and environmental groups that sued the agency for not regulating greenhouse gas emissions from power plants. NSPS requires all new fossil units above 25 MW to cap CO2 emissions below 1,000 pounds per megawatt-hour, roughly on par with the emissions rate of an unmitigated natural gas combined cycle unit. In order to comply, project operators must either install CCS technology, which is still considered prohibitively expensive, or opt towards gas. In order to incorporate flexibilities and promote CCS, EPA said it plans on averaging unit emissions over a 30-year period, allowing some coal units to remain unmitigated for 10 years if they then promise to install and run CCS technology for the next two decades. Despite the averaging provision, critics of NSPS have said that it will likely lead to a ‘dash for gas’ and effectively end traditional coal-fired power generation.

Groups Push for Tighter Emissions Standard

In simultaneous all-day public hearings in Chicago and Washington, D.C., EPA officials heard hundreds of testimonies from stakeholder groups and private citizens over NSPS. Environmental groups praised the standards but suggested that the Agency opt for stricter emissions standards beyond what was proposed—instead requiring all coal and gas- fired generation to be mitigated with CCS technology. “NRDC supports setting the new source standard below 1000 lbs/MWh because modern new NGCC plants can meet a tighter level at no additional cost,” said David Doniger, policy director and senior attorney for the Climate and Clean Air Program at the Natural Resources Defense Council, in his testimony. “New coal-fired electric generating units equipped with carbon capture and storage technology can also meet a tighter level, especially in light of the 30-year averaging provisions that EPA has proposed.”

Darin Schroeder, a legal fellow at the Clean Air Task Force, said CCS falls under EPA’s definition of a technology that is the ‘best system of emissions reduction.’ “CCS is adequately demonstrated and emission limits based on this technology are achievable, especially when looking out over the 30 years an electric generating unit would have to comply,” he said. “The NSPS program is meant to pave the way toward improved air quality—including decreased climate pollutant emissions—and is to be based on the best system of emission reduction. As such, the courts have said that the NSPS program should look ‘toward what may fairly be projected for the regulated future, rather than the state of the art at present’ in order to stimulate and augment the innovative character of industry.”

Industry Says NSPS Could Spell End for Coal

Meanwhile, opponents of the regulation criticized EPA for advocating for CCS technology, arguing that it is a “backdoor” way of ending coal-fired power generation given that CCS has not yet been demonstrated at full commercial scale. “Since CCS technology is not commercially available at this time, requiring the use of this technology would function as a complete ban on the development of new coal-fired generation,” said Scott Segal, director of the Electric Reliability Coordinating Council and lawyer at Bracewell & Giuliani. Alex Bond, director of Air Quality at the National Mining Association, offered a similar conclusion in his testimony. “EPA’s proposed ‘30-year average’ option coupled with a non-commercially viable CCS process for coal-fired electric generating units is also an unprecedented sleight of hand by the Agency, and serves to effectively discourage any future construction of coal-fired units,” he said. “The planning process for constructing a new coal plant is time intensive, and no utility company will build new plants on the hope that CCS may become viable in 10 years.”

The National Rural Electric Cooperative Association’s Carol Whitman argued that EPA should withdraw the NSPS in its current. She said EPA’s assumption that the rule will spur the development of CCS technology is “misguided.” “The proposed NSPS as applied to coal requires up front commitment to meet sequestration standards years in advance of knowing the full costs and viability of [geologic sequestration] well technology. Few if any electric utilities can afford to take that kind of a financial risk,” she said. “Thus, this rulemaking will destroy any reasonable opportunity to develop CCS technology in this country for domestic application or for exportation.”

Looking Beyond CCS

Other environmental groups said that while EPA’s NSPS was well intentioned, it should move beyond fossil fuels. Rachel Cleetus, senior climate economist at the Union of Concerned Scientists, said in her testimony EPA should consider alternative methods for compliance beyond CCS and fuel switching to natural gas. “We do not see a reason for special treatment for CCS,” she said in her testimony. “EPA should explore the possibility of alternative compliance mechanisms that utilize other measures that help reduce emissions, such as energy efficiency and renewable energy. These options are already readily available and affordable and therefore far less risky than banking on CCS.”