EPA’s Utility MACT Overreach Threatens To Turn out the Lights

by William Yeatman on May 18, 2011

in Blog, Features

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Three of the Congress’s most influential energy policymakers this week “urged” the Environmental Protection Agency to delay an ultra-costly regulation targeted at coal-fired power plants, the source of 50 percent of America’s electricity generation.  For the sake of keeping the lights on, all Americans should hope the Obama administration heeds these Congressmen’s request.

Senate Environment and Public Works Ranking Member James Inhofe (R-OK), House Energy and Commerce Chair Fred Upton (R-MI), and House Energy and Power Subcommittee Chair Ed Whitfield (R-KY) yesterday sent a letter to Environmental Protection Agency Administrator Lisa Jackson demanding a longer comment period for a proposed regulation known as the Utility HAP MACT

[The HAP stands for “Hazardous Air Pollutant,” and the MACT stands for “Maximum Achievable Control Technology”; to learn what these terms entail, read this summary of the regulation, Primer: EPA’s Power Plant MACT for Hazardous Air Pollutants.]

The EPA issued the Utility HAP MACT in mid-March, and it gave the public 60 days to comment. The Congressmen “urge the agency [to] extend the comment period to a minimum of 120 days to allow adequate time for stakeholders to assess and comment on the proposal.”

The extended comment period is well warranted. For starters, the EPA included a number of “pollutants” in the proposed regulation that shouldn’t be there. The EPA’s authority to regulate hazardous air pollutants from power plants is derivative of a study on the public health effect of mercury emissions. The EPA’s proposed regulation, however, would regulate acid gases, non-mercury metals, and organic air toxins, in addition to mercury. Yet the EPA’s evidence only pertains to mercury. The EPA’s authority to regulate these non-mercury emissions, despite their not having been a part of the aforementioned study, will be challenged, and the DC Circuit Court ultimately will decide.

Why would the EPA include these non-mercury emissions into its proposed regulation? My guess is that the agency wanted to leave no stone unturned in its war on domestic coal demand. Thanks to an emerging technology known as “sorbent injection,” removing mercury from post-combustion emissions could be achieved at many power plants without having to install flue gas desulphurization equipment, a.k.a. “scrubbers,” which are far more expensive, and which had been the primary method of mercury control. But the EPA wants all power plants to install these “scrubbers.” Consider the title of slide 8 of this EPA presentation on the proposed Utility HAP MACT rule, “Many Exiting Coal Units Lack Advanced Controls.” The only way to ensure that ALL plants have to install expensive “scrubbers” was to include non-mercury “pollutants” into the regulation.

As Inside the EPA reported on March 18,

Despite the focus on mercury emissions, the major upcoming fight over the rule could center on the proposed limits for emissions of other hazardous air pollutants (HAPs) including hydrogen chloride (HCl). EPA is proposing to set a “conventional” MACT limit for HCl that will act as a surrogate for limiting acid gases.

The HCl limit could set such strict limits on acid gases that even the smallest coal-fired power plants with the lowest emissions levels might have to install expensive “scrubber” technology to cut their emissions, an industry source has said, boosting concerns from mining and other industries about the rule’s potential costs…

…The National Mining Association (NMA) is warning that the HCl limit has the biggest potential for opposition from industry because it could require almost every coal-fired power plant in the country to invest in expensive scrubbers to reduce acid gas emissions.

The EPA’s Utility MACT overreach engenders serious reliability concerns. Many utilities will find it cheaper to shutter older, smaller units, rather than to install “scrubbers.” According to a study by Bernstein & Associates, mandating scrubbers, which is essentially what the EPA proposes, would result in the premature closure of almost 33,000 megawatts of coal fired power capacity. Moreover, most of that capacity is located east of the Mississippi, and this geographical concentration accentuates the regional threat to grid reliability. To put it another way, if you live in the Ohio Valley, you should be very concerned.

Then there’s the cost. “Scrubbers” entail huge capital expenditures, usually $100 million to $200 million per power plant. The EPA concedes that its proposed Utility HAP MACT regulation would cost $10 billion a year by 2015, making it one of the most expensive regulations, ever. This is likely a low ball. According to the Electric Reliability Coordinating Council, the price tag is as much as $100 billion a year.

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