“Today we’re taking a common-sense step to reduce pollution in our air, protect the planet for our children, and move us into a new era of American energy,” EPA Administrator Lisa Jackson said in a press release on March 27, announcing the first carbon pollution standard.
The “carbon pollution standard” will reduce carbon emissions to 1,000 pounds per megawatt of electricity for all future coal power plants, but will not apply to existing plants or those that start construction within the next year. The average coal plant emits 1,768 pounds. The proposed rule is currently in a 60-day comment period before it will be finalized and published in the Federal Registrar.
The coal industry, meanwhile, contends it will drive electricity prices up, as coal currently makes up 45 percent of American electricity production.
“I think anybody who’s being honest can say that these [regulations] effectively make it so it’s nearly impossible to build a new coal-fired power plant in the United States,” said Evan Tracey, senior vice president for communications at the American Coalition for Clean Coal Electricity (ACCCE).
Tracey said the latest EPA rule, along with last year’s Hazardous Air Pollution MACT rule – which will require coal plants to limit their emissions of mercury and other hazardous air pollutants by January 2015 – are a big reason why Americans may soon feel “pain at the plug.”
“Americans are suffering, certainly, a lot of pain at the pump,” he said. “They’re going to start to learn what ‘pain at the plug’ means.”
The ACCCE says EPA regulations are already responsible for the announced closure of more than 140 electricity-generating units in 19 states.
“If some of this existing power is taken offline, as it’s been in some of the cases, with some of the new compliance rules, some of these plants are going to find themselves having to close prematurely, and that could be a real issue with supply not being able to keep up with demand,” Tracey said.
He also argued that the states with the most electricity production from coal traditionally have the lowest energy costs, but with no new coal power plants that may no longer be the case.
Kenneth Green, resident scholar at the American Enterprise Institute, agreed the regulation will ensure that no new coal-burning plants will be built.
But Green sees the move as merely a “symbolic gesture” in a market that has been trending away from coal towards natural gas.
While other EPA regulations, like hazardous air pollutant rules and tighter ozone standards, will increase the cost of coal-generated electricity, Green said energy producers are almost exclusively looking at new natural gas generation, making the greenhouse emission regulation irrelevant to future coal prices.
“They know that nobody is planning to build new coal power plants,” Green said of the EPA. “They ruled out enforcing the regulation on existing coal plants. So this is a completely symbolic gesture for their environmental base, which is the bragging rights are, ‘We passed the first greenhouse gas controls over coal power plants,’ knowing full well that the problem is already solved by the market and this is their way of claiming credit for something that really they don’t deserve any credit for.”
Green explained the economics of natural gas are much better than coal, which must comply with the National Ambient Air Quality Standards under the Clean Air Act, in place since 1990.
“A few years ago it would have been easy to explain that you would have said by imposing green house gas restrictions on new coal plants you essentially force their costs up so high they become non-competitive or unprofitable and therefore you’re de facto pushing them out of existence,” Green said.
But if the shale gas “revolution” should peter out, he said, and the market shifts back to coal, consumers will be hurting.