EPA Issues Proposed Greenhouse Gas Performance Standards for Power Plants
Posted on September 25, 2013
In 2007, the U.S. Supreme Court, in Massachusetts v. EPA, 549 U.S. 497 (2007), made environmental-law history by proclaiming that carbon dioxide and other “greenhouse gases” (GHGs)—the primary cause of climate change—are “air pollutants” subject to regulation under the Clean Air Act. Prior to the decision, the U.S. Environmental Protection Agency (EPA) simply had no regulations pertaining to GHGs, no limits on how much could be emitted. Massachusetts v. EPA set off a domino chain of regulatory actions by EPA, including establishing higher fuel economy standards for cars and light trucks for the first time in over 21 years, instituting the so-called “Tailoring Rule” regulating GHG emissions from stationary sources under the Clean Air Act’s PSD and Title V permit programs, and, most recently, promulgating a proposed new source performance standard specifically for GHGs emitted by power plants.
As this chart from EPA’s website demonstrates, power plants are responsible for a full 33 percent of U.S. GHG emissions, more than any other economic sector.
And while an increasing amount of our electricity comes from renewable sources (e.g., hydro, wind) and nuclear, a large majority is still generated by burning fossil fuels, including natural gas (25%) and coal (42%).
On September 20, 2013, EPA took a significant step to address GHG emissions from fossil-fuel burning power plants by issuing proposed GHG performance standards under the Clean Air Act for fossil fuel-fired utility boilers, integrated gasification combined cycle (IGCC) units, and certain natural gas-fired stationary combustion turbines.
The proposed standard of performance for new utility boilers (including coal-fired power plants) and for IGCC units is based on partial implementation of carbon capture and storage (CCS) as the “Best System of Emissions Reduction” (BSER). EPA’s proposed emission limit for these sources is 1,100 lbs of carbon dioxide per megawatt-hour (CO2/MWh). The agency’s proposed standard for natural gas-fired stationary combustion turbines, based on modern, efficient natural gas combined cycle technology as the BSER, is 1,000 lbs CO2/MWh for larger units and 1,100 lb. CO2/MWh for smaller units. EPA’s proposed regulations do not include standards of performance for modified or reconstructed sources, nor do they regulate existing sources; the rules only apply to future power plants. EPA proposed a prior version of the standards in March 2012, but, after receiving some 2.5 million comments, withdrew the proposed rule out of concern it could not withstand a legal challenge.
The revised proposed standards, if finally adopted, could constitute an effective moratorium on construction of new coal-fired power plants. (Yes, there WILL be litigation over these standards.) Consider that the average emission rate in the U.S. from coal-fired power generation is 2,249 lbs/MWh of carbon dioxide (www.epa.gov). Under the proposed standards, a new coal-fired plant would be required to have half the carbon emissions of existing coal-fired plants. And EPA’s proposed technology for achieving this drop in emissions, CCS, which involves capturing the carbon dioxide emitted by power plants and pumping it into underground formations, is costly and largely untested on a commercial scale.
So, will these standards result in higher electricity bills? Well, as Brad Plumer of the Washington Post nicely outlined in an article earlier this week, probably not. The proposed standards will only apply to future power plants. Because of the shale-gas fracking boom, natural gas is cheap enough that there is already no real economical incentive to build new coal plants. Utilities are tending to build wind- and natural-gas-based facilities instead, and natural-gas-fired power plants should have no trouble meeting the proposed standards without significantly increasing costs. If natural gas prices rise, thing could be different, but in the meantime both the cost of electricity, and the electricity sector’s overall GHG emissions, are likely to not be significantly affected by the new standards.
Importantly, however, the regulation of GHGs from new power plants sets the stage for anticipated EPA regulations limiting GHG emissions from existing fossil-fuel-fired power plants. And these rules could have a real impact…on both climate and pocketbook. More to come on this issue.