New Greenhouse Regs for Power Plants: Will EPA Go to Extremes?

by Marlo Lewis on January 13, 2012

in Features

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Greenwire (subscription required) reports that EPA has sent its proposed regulation establishing greenhouse gas (GHG) New Source Performance Standards (NSPS) for new and modified power plants to the Office of Management and Budget (OMB) for review.

The stringency of the regulation is unknown to outsiders at this time. Environmental lobbyists hope EPA will set the bar so high that only natural gas power plants, or coal-fired plants equipped with carbon capture and storage (CCS) technology, can comply. Industry representatives want EPA to propose separate standards for coal- and gas-fired electric generating units reflecting the different carbon intensities of coal and natural gas.

No previous NSPS has ever required new power plants to use natural gas rather than coal, and none has ever required modified plants to switch from coal to natural gas. Industry representatives contend that Congress never intended the NSPS program to block construction of coal power plants or mandate fuel switching. They’re right.

The alternative compliance option for new and modified coal power plants — installing CCS — may exist only on paper, because longstanding economic, technical, and regulatory challenges make CCS a costly and risky investment. No commercial-scale CCS-equipped power plant has ever been built without massive government subsidy.*

Noting that Midwest and Eastern coal-producing states are key swing states in presidential elections, former Bush EPA air office director Jeff Holmstead told Greenwire: “Does the White House want to run in Pennsylvania, and Ohio, West Virginia and Virginia if they’ve recently proposed something that will prevent the construction of new coal-fired power plants?”

Indeed, the war on coal was a political liability in the November 2010 congressional elections. Some two dozen Democrats who voted for the Waxman-Markey cap-and-trade bill got pink slips from their districtsBlocking construction of new coal-fired power plants has long been a top priority of the environmental movement. But does Team Obama want to kill coal badly enough to court political suicide?

Yes, opines my colleague, Chris Horner:

I’m starting to think that only Republicans can commit political suicide. Obama’s numerous efforts — the SF Chron ed board video [in which Obama advocated cap-and-trade even though (or because?) it would cause electricity rates to "necessarily skyrocket" and "bankrupt" coal power plants], for one — raising the interesting philosophical question: how many times can one commit suicide?

I conclude that if you have the right letter after your name political suicide is possible but must be assisted. It requires two other elements: (a) an opponent to help administer the knife/poison/radio in the bathtub, and (b) media to report a deathly act was committed. Really chaps me the Rs again have a guy (likely), who will be unable to credibly seize this stuff.

In other words, Republicans aren’t sharp enough to make political hay out of regulatory excess at EPA and the media wouldn’t much pay much attention anyway.

Even if Rs are vigilant and the media attentive, EPA might still go to extremes. What could be politically crazier in an election year, at a time of high gasoline prices, than to deny Americans the energy security benefits of Canada’s booming oil production? Rs have made the Keystone XL Pipeline a front-burner campaign issue, and media coverage is non-stop. Yet Obama may still decide to nix the pipeline, or somehow postpone deciding until 2013 despite a statutory requirement to grant or deny a permit by Feb 21 of this year. Similarly, Andrew Shaw, an analyst with McKenna Long & Aldridge, suggests that EPA may not issue a final NSPS rule until after the 2012 elections.

The only safe bet is that 2012 is going to be a contentious year in energy politics.

* The government of Saskatchewan has approved the $1.2 billion Boundary Dam Integrated Carbon Capture and Storage Demonstration Project, which aims to build and operate one of the world’s first “commercial-scale” CCS power plant by 2014. The Canadian government has subsidized the project to the tune of $240 million. It’s anybody’s guess when such projects will be able to stand on their own economic feet.

BobRGeologist January 14, 2012 at 1:49 am

Here we go again with much ado about nothing. Sequestering CO2 is nothing but a shameful waste of taxpayers money and EPA regulations a fearful drag on our economy. If Obama persists with this environmental nonsense during Pleistocene interglacial #5 (that is today) and preserving our glacial climate, it will be ineffective and enormously expensive and likely dangerously counterproductive. It will begin with enormous snows in our Arctic that resist melting during cool summers and will require a few thousand years. Our only recourse will be the EPA’s worst dream, a robust greenhouse gas with lots of CO2 in it. (suggested reading Dr. William Happer, the Cyrus Fogg Brackett Professor of Physics at Princeton Univ. ” The truth about Greenhouse Gases”

Bob January 16, 2012 at 6:48 am

Under current rules EPA and the States are demanding that BACT for GHG is considered for new permits. You must even consider CCS. I’m doing this for small landfill gas to electricity plants that are Title V sources, but not PSD sources for any pollutant or CO2. The facts that there ARE NO CCS facilities, no transport infrastructure doesn’t affect the regulators. The regulators have gone nuts.

The EPA has issued rules that effectively shut down new construction of even so-called “green, renewable energy” projects. You can fail the 1-hour NO2 rule without running your source, if there are enough emergency generators near you. North Carolina is sitting on an application based rules that are suspended, since they believe that the EPA is making landfill gas a solid waste.

Come out with a new NSPS for power plants? Yep, these people are seeing how many eggs they can break in 4 years because they know the political will to fix all that does not exist.

mercadee January 17, 2012 at 1:49 pm

There are lots of ways to produce electricity, but to avoid confusion, this article is written, to only explain one type of power plant – coal fired power plant.

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