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New UserObama prepares to take on Big Coal
16 Sep 2013
This week will bring a major gut check for President Barack Obama’s climate agenda — specifically, his appetite to take on coal.
The Environmental Protection Agency is due to release a White House-vetted proposal by Friday that would impose the first-ever limits on greenhouse gases produced by future power plants. It would especially squeeze plants that burn coal, the nation’s cheapest, most abundant and dirtiest fuel source.
The rule coming this week wouldn’t apply to existing power plants — EPA will tackle those in a second rule due to be proposed next June and finished a year later. But EPA’s proposal is the first major step toward fulfilling Obama’s call this summer for his agencies to tackle climate change without waiting for help from a gridlocked Congress.
Coal supporters call it the latest salvo in the president’s war on affordable energy.
Expect to hear a lot about the rule during the next year, especially as Republicans use it as a weapon against coal-state Democrats like Virginia gubernatorial candidate Terry McAuliffe, West Virginia Rep. Nick Rahall and Kentucky Senate challenger Alison Lundergan Grimes. Meanwhile, environmental groups are expected to mount a major effort to champion the rule, offering both public and legal support while praising Obama for taking on the fight.
“I fully expect that the environmental and public health communities are going to come out cheering,” said Clean Air Watch President Frank O’Donnell.
Coal industry groups are already alarmed by what they’ve seen of the proposal.
“If reports are true, the EPA is set to issue a rule that will completely halt the development of new coal-fueled plants by requiring they meet unachievable carbon standards,” said Mike Duncan, CEO of the American Coalition for Clean Coal Electricity.
EPA’s rule wouldn’t ban coal-burning power plants, but it would require that any new plants be built with expensive, still uncommon technology to capture and store carbon dioxide emissions, according to sources who have seen the proposal. It would make several changes from a previous version the agency released in March 2012, for example by no longer requiring coal plants to meet the same emissions limits as cleaner-burning natural gas plants.
“The outcome of this is not … very different from the previous proposal,” said a source who had obtained a copy of the proposed rule that EPA sent for White House review and declined to be identified. “What they have done is gone in and made it much more legally defensible.”
Nevertheless, opponents are gearing up for a court battle, and the coal industry — troubled by competition from natural gas, stringent environmental regulations and a string of bad luck — is already crying foul.
Much of the fight will focus on whether advanced coal technology is ready for prime time.
Several sources have said EPA’s rule will set the carbon emissions standards for coal-fired plants at around 1,000 pounds per megawatt hour, meaning they would have to capture about 50 percent to 60 percent of their carbon dioxide emissions. Industry and environmental sources involved in the rulemaking say that they’ve heard conflicting numbers — but all expect to see a standard that would require a major change in how future coal plants do business.
Duncan and other coal industry leaders argue that if EPA’s intent is to drive the development of “clean coal,” those strict limits would backfire.
Setting such tight standards would “destroy, not encourage, the development of new carbon capture and storage (CCS) technology,” Duncan wrote.
“If the coal limit does call for some level of carbon capture, we firmly believe CCS is not a demonstrated technology that meets the requirements of the Clean Air Act as a basis for [the new power plant] limit at this time,” said Melissa McHenry, a spokeswoman for the coal-heavy power producer American Electric Power.
In the “foreseeable future, CCS is a show stopper” for coal power, said Jeff Holmstead, an attorney and former EPA air chief under the George W. Bush administration who represents clients opposed to the greenhouse gas standards.
But greens call that argument a red herring.
”What new coal plants?” asked Natural Resources Defense Council attorney David Doniger. “The market for new coal plants isn’t there as it is.”
Rather than concede that coal is already uncompetitive, the coal industry would rather “blame EPA and the Obama administration,” Doniger said.
O’Donnell said he doubted that EPA’s rule will mean much for coal’s future, especially given natural gas’s ascendancy.
“Coal is no longer the fuel of choice,” he said. “The economics have really come into play and knocked coal out of the winner’s circle, and I don’t see that changing any time soon.”
In EPA’s first-round proposal from 2012, the agency identified 15 possible “transitional” coal-fired power plants that had already received preliminary permits but wouldn’t meet the proposed standards. Those plants could get a pass from meeting the new limits, EPA said, but only if construction started in the year before the rule became final.
But more than a year has passed, and most of those planned coal plants have already gone down the tubes anyway. Many of them were plagued by financial problems or gave up in the face of unrelenting environmentalist lawsuits.
In EPA’s new version of the rule proposal, just two coal-fired power plants are on the “transitional” list, according to the source who saw the draft. Those two plants may have just four months to prove to the agency that they should be allowed to go forward.
One coal-fired power plant will be front and center of EPA’s proposal: Southern Co.’s Kemper County Energy Facility, which is under construction in Mississippi and will be the first commercial-scale major coal-fired power plant to employ carbon capture in the U.S.
The 582-megawatt plant, which the Energy Department says is 75 percent complete, will take low-grade lignite coal, mined on site, and gasify it for power. Then it will capture more than 65 percent of the carbon dioxide emissions and pipe them to nearby oil fields where the CO2 will be injected underground, forcing hard-to-reach oil to the surface. DOE calls the combination a technological first.
Southern Co. is excited about the plant, spokesman Tim Leljedal said. “But by itself, it cannot be used as a standard for all new power plants nationwide,” he said.
EPA will also point to a wide body of literature, as well as a variety of other types of carbon capture projects, and argue that the technology really is ready for prime time, sources say.
Nevertheless, it’s widely agreed that carbon capture technology is still hugely expensive. Building a coal plant that cuts its greenhouse gas emissions costs billions of dollars, while a similarly sized state-of-the-art natural gas plant would cost hundreds of millions. That undercuts the cheap-fuel market advantage that coal has enjoyed for decades.
Supporters of EPA regulations argue that there’s not much reason for industry to build commercial-scale carbon capture coal plants without regulations. And experts say the price won’t drop until the technology becomes more commonly used.
Manik Roy, vice president at the Center for Climate and Energy Solutions, said it’s only through repeated commercial-scale deployments that carbon capture technology will become cost efficient. And that will happen, he argues.
“Everything we have has gone through that cost curve,” Roy said, noting how much it cost to get the iPhone off the ground. “The technology that we have in our cars now you used to find in Saturn V rocketships,” Roy said. “One of the surest bets you can make is that there’ll be a cost curve.”
The International Energy Agency has said carbon capture at power plants could account for 15 percent of needed greenhouse gas emissions reductions globally by 2050. But that would require about 100 commercial-scale projects. The world has only nine active commercial-scale projects, with 60 in development, according to the Global CCS Institute.
But that’s a long way off. Greens want action now — and they see this week’s rule rollout as a prelude to a long-awaited effort to start cutting emissions from the nation’s existing power plants.
“The real critical element of this will be setting some kind of starting point for EPA to develop guidelines for existing sources,” O’Donnell said, characterizing those as “clearly the bigger … long-term issue.”
Most in the environmental community “are largely just looking at this as the starting point for the broader cleanup effort,” he added. “I think folks are very anxious to get going.”