In January, EPA proposed the Carbon Pollution Standard, a regulation that requires new coal-fired power plants to install carbon capture and sequestration (CCS) technology. Because CCS is not yet commercially viable, it is prohibitively expensive. As a result, EPA’s Carbon Pollution Standard effectively bans the construction of new coal-fired power plants.
Without further ado, here are the top six reasons that EPA’s proposed Carbon Pollution Standard is illegal:
#6. EPA’s Carbon Pollution Standard increases conventional pollution.
Capturing, transporting, and sequestering greenhouse gases from a power plant is an energy-intensive process that leads to a general energy penalty varying on the order of 15-25%. This energy penalty requires the additional consumption of fuel, which increases conventional pollution. While there are technologies to mitigate increases in nitrogen oxides and particulate matter pollution, nothing can mitigate a precipitous increase in emissions of ammonia pollution (see chart below) caused by use of carbon capture and sequestration. Also, because CCS-outfitted power plants use more fuel, they generate greater volumes of combustion wastes, primarily coal ash and boiler slag. Increases in conventional pollution, per se, don’t sink the Carbon Pollution Standard, but the Agency must address these adverse environmental impacts, at the very least. See Sierra Club v. Costle, 657 F. 2d 298, at 331. The proposed Carbon Pollution Standard fails to do so.
The Clean Air Act requires that the Carbon Pollution Standard be based on an “adequately demonstrated” technology, which the courts have interpreted as being “commercially demonstrated.” In a recent post for Master Resource, I compared the state of CCS technology today to past pollution control technologies whose commercial viability was adjudicated by the courts. The results of this analysis are summarized in the chart below and demonstrate that CCS is not “adequately demonstrated.”
In addition to requiring that the Carbon Pollution Standard be based on an “adequately demonstrated” (i.e., commercially viable) technology, the Clean Air Act requires that the regulation must be “achievable.” The D.C. Circuit Court of Appeals, in turn, has interpreted “achievability” to mean that the regulation is capable of being met in all parts of the country. See National Lime Association V. EPA, 627 F. 2d 416 at 443. This is a problem for the EPA, because the types of geological formations that are capable of storing vast volumes of greenhouse gases for sequestration are distributed unevenly throughout the country. Indeed, the agency identified only 12 States that practice the type of sequestration (enhanced oil recovery) that EPA believes will meet the requirements of the Carbon Pollution Standard.
#3. EPA’s Carbon Pollution Standard violates the 2005 Energy Policy Act. This is a subject I discussed in detail in a previous post; suffice it to say for the purposes of this post, EPA relied on three CCS projects (in varying stages of development) to make the case that the technology is “adequately demonstrated.” However, in a November 15th letter to EPA Administrator Gina McCarthy, Reps. Fred Upton (R-Michigan), Ed Whitfield (R-Kentucky), Joe Barton (R-Texas), and Steve Scalise (R-Louisiana) brought to her attention a little-known provision of the 2005 Energy Policy Act that prohibits the agency from basing an “adequately demonstrated” determination on CCS projects that received subsidies pursuant to the law. As they helpfully note, each of the CCS projects on which EPA had relied were beneficiaries of such subsidies, and are, therefore, inappropriate foundations for the Carbon Pollution Standard. The letter is available here.
#2. EPA’s Carbon Pollution Standard is “exorbitantly” expensive. Under the Clean Air Act, the EPA must take costs into account when the agency sets the Carbon Pollution Standard. The D.C. Circuit has interpreted this provision such that only “exorbitant” costs are impermissible Essex Chemical Corp. v. Ruckelshaus, 486 F. 2d 427 at 433 (D.C. Cir. 1973). As such, if the costs of carbon capture and sequestration are in fact “exorbitant,” then the regulation is illegal. While the courts have never put a precise number on what constitutes impermissible, “exorbitant” costs, the largest compliance cost considered by the court was “approximately 12 percent of the investment for the total facility”. See Portland Cement Association v. Ruckelshaus, 486 F. 2d 375 at 387 (D.C. Cir. 1973). By comparison, carbon capture and sequestration evidently adds at least 500 percent to the investment for a new coal-fired facility*.
#1. EPA’s Carbon Pollution Standard would increase greenhouse gases! Due to the high cost of capturing, transporting, and sequestering carbon dioxide, EPA expects that any new coal-fired power plants built in the foreseeable future will defray the costs of CCS by selling its carbon dioxide to oil companies, which can use the gas to help extract oil by displacing liquid fuels deep underground, in a process known as CO2 enhanced oil recovery (or CO2-EOR). In the proposed rule, EPA states that, “as a practical matter, we expect that new fossil fuel fired EGUs that install CCS will generally make the captured CO2 available for use in EOR operations.” But there’s a HUGE problem with EPA’s proposal. It completely fails to take into account the expanded carbon footprint of the oil industry caused by its power plant rule. By my calculation, a typical coal plant in compliance with EPA’s Carbon Pollution Standard would result in the emission of 1.3 million more kilograms of CO2 than the plant would “save” per megawatt capacity annually. Of course, any rule that worsens the problem it set out to solve is patently ridiculous.
*Consider, for example, the only “clean coal” CCS project now being constructed in the U.S., the 580 megawatt Kemper power plant in Mississippi. After many cost-overruns, the current project tab is $5.2 billion. This is well more than 5 times the cost of a comparably-sized coal-fired power plant equipped with the most advanced controls for conventional pollutants.