In March 2012, the U.S. Environmental Protection Agency introduced a proposal for limits on carbon emissions from new power plants. While the EPA has dubbed the initiative a “common-sense step”, many in the energy industry have called it an extreme move that will mark the end of coal-fueled power generation in the U.S.
To summarize the new standard, the new rules would set a limit of 1,000 pounds of carbon dioxide per megawatt-hour of energy produced by fossil-fueled power plants. Excluded are existing power plants and those permitted to begin construction within 12 months of the proposal.
While the EPA’s New Source Performance Standard does not explicitly bar the use of any fuel source, its strict emissions criteria plainly leaves coal as a non-viable resource for new power plants in the near term. At an average of 1,800 pounds per megawatt hour, traditional coal-fired power generators would have to find the means to cut emissions by nearly half.
Through the lens of the EPA, these changes will help to encourage a diverse energy mix while also curbing harmful emissions. A fact sheet issued by the agency outlines the new standards are aimed at maintaining a diverse energy mix by encouraging development of new plants utilizing fuels sources such as natural gas. EPA goes on to highlight that the agency has also included a provision that would allow new power plants that use carbon capture and storage (CCS) technologies the option to use a 30‐year average of CO2 emissions to meet the proposed standard, rather than meeting the annual standard each year.
On the surface, the EPA’s proposal comes across as a reasonable and timely set of regulation under the Clean Air Act. Especially if you step away from the rhetoric coming from both sides of this very charged issue. But upon more careful examination, there is a lot wrong with the new standards. It is not a balanced long-term approach and in fact will begin as a rather ineffective rule in terms of environmental control.
So what does this mean for the environment and the energy industry? In Part 2 of No Country for Old Coal we will take a closer look at the issues plaguing the EPA’s new standards and the implications these hold for both supporters and opponents of the new rules.