The Environmental Protection Agency Proposes to Limit GHG Emissions

Summary.  The U. S.Environmental Protection Agency has issued a new proposed rule to limit greenhouse gas emissions from large electric generating plants.  The rule provides a strong incentive to migrate from coal-fired power plants to combined cycle gas-fired plants, and to commercialize carbon capture and storage technology.  Implementing this rule may provide an incentive to all parties of the world to coalesce around a new international agreement to limit greenhouse gas emissions.

Introduction.  The U. S.does not have a nation-wide legislated policy governing emissions of greenhouse gases that lead to warming of the planet.  Certain American states and regions do have such policies at various stages of progress and achievement; they generally employ a cap-and-trade market-driven mechanism to limit emissions.  Separately, the U. S. Environmental Protection Agency (EPA) has put forth a regulation limiting greenhouse gas emissions from new large electric generating plants, described here.

EPA issued a proposed regulation (the “rule”) limiting greenhouse gas (GHG) emissions (primarily carbon dioxide (CO₂)) from electric generating plants on March 27, 2012.   As a proposed regulation, it is available for comment on its provisions by the public, including affected parties, for 60 days.  EPA then assesses the comments and makes any appropriate changes to the regulation, which is then issued as a final regulation.

The rule proposes to limit GHG emissions from new large fossil fuel-fired power plants, those with a generating capacity greater than 25 megawatts by placing an upper limit on their CO₂ emissions.  The rule is issued under the authority of the Clean Air Act, as upheld by the U. S. Supreme Court in Massachusetts v. EPA in April 2007.  The decision specifically granted the EPA this authority provided that, upon suitable scientific inquiry, GHGs qualify as “air pollutants”.  EPA did in fact reach this determination after thorough scientific analysis of the question.  The rule proposes to combine new coal-fired electric generating plants (steam boilers and Integrated Gasification Combined Cycle plants) and combined cycle plants into a new single class whose performance will be limited to GHG emissions of 1,000 lb CO₂/megawatt-hour of electricity generated.  This limit is based on the current performance characteristics of natural gas-fired combined cycle (NGCC) generating plants, already widely used and which already meet this limitation.  (Natural gas combined cycle plants have two stages of power generation.  In the first, the gas is burned in a turbine not unlike a jet engine that powers airplanes.  The hot exhaust turns the turbine which is used to generate electricity in this first stage.  The hot exhaust then is used to heat water to steam, and the steam drives a second generating turbine in the second stage.  These plants have very high efficiency levels.)

The rule notes that generating plants not using NGCC, such as those powered by coal, coal refuse, and oil or petroleum can meet the new standard if they remove CO₂ from the exhaust gas stream using carbon capture and storage (CCS).  CCS entails capturing CO₂ from a utility-scale source that burns a fossil fuel such as coal or natural gas; transporting the purified CO₂ to a remote geological storage site, typically a deep subterranean repository, and injecting or piping the CO₂ into the storage or sequestering formation.  In a previous post, we noted that many problems remain to make CCS industrially viable for utility-scale facilities.  If successful, this technology would make a significant contribution to limiting GHG emissions into the atmosphere, thus constraining the increase in the long-term global average temperature.  The rule suggests that a CCS installation that removes at least 50% of the CO₂ in the exhaust gas would meet the constraints.  As noted in the earlier post, CCS is generally thought to be capable of removing more CO₂ than that.  While noting that CCS could help non-natural gas-fired plants meet the proposed limits on emissions, the rule recognizes that at present the technology is more expensive than constructing new NGCC plants, but offers the expectation that costs will decrease as the technology is implemented and becomes mature.

EPA supposes that, by issuing this rule, most new electric generating plants will in fact use NGCC to provide the power, rather than using coal with CCS.  The rule exempts power plants already operating, as well as those already permitted and for which construction begins within 1 year of the date of this rule.

The Coal Industry Forecasts Growth in Usage.  Shortly after the rule was issued, GBI Research issued a report, Coal Mining Market in North America to 2020 – Carbon Emissions and Skilled Labor Shortages Likely to Limit Production  (summarized here), which projects that after a slight decrease in coal production and consumption in the U. S. in 2012, mining production is projected to increase to 940 million metric tons by 2020.  This is ascribed largely to coal plants already under construction, and/or those that will be completed by 2015.  As such, they do not fall under the proposed rule.  The new plants will add 11.5 gigawatts of generating capacity.

The U. S. and Canada produced about 14.1% of the all the coal in the world in 2011, of which 93% was devoted to electric power generation.

Analysis.  The U. S.emits a large amount of CO₂ and other greenhouse gases into the atmosphere; a few years ago China overtook the U. S. as the leading nation in emissions of the world.  Yet, in distinction to many nations and the European Union, the U. S.has no national legislated energy policy in place that sets forth a plan to limit greenhouse gas emissions. 

As an alternative, a U. S.executive agency, EPA, has issued a first proposed rule to limit emissions from large fixed point sources involved in electricity generation.  Once issued as a final rule, the plan should limit power plants using any fossil fuel to a long-term emissions rate less  than 1,000 lb CO₂/megawatt-hour of electricity generated.  EPA recognizes that the effect of this rule will be at least two-fold.  First, it will provide an incentive to move away from use of coal as a fuel for new electric generating plants.  Second, it will provide an incentive for further research, development and deployment of CCSinstallations around the country.  The U. S. Department of Energy already supports such efforts.

In a related development, President Obama and his administration have raised the Corporate Average Fuel Efficiency (the average target for miles per gallon for cars made by each manufacturer) to 54.5 mpg by 2025.  This comes on top of a previous increase by the Administration to 35.5 mpg by 2016.  The second stage will lead to significant decreases in CO₂ emissions when implemented.

Increased long-term global average temperatures induced by adding higher and higher levels of CO₂ and other GHGs to the atmosphere lead to harmful effects around world.  These include more numerous and more severe extreme weather events and a rising mean sea level that threatens low-lying areas during coastal storm surges.  For these reasons it is encouraging that the proposed EPA rule takes a first step in limiting emissions from the U. S.  We may hope that this action encourages all nations of the world to reach a global agreement on limiting emissions in the near future.

© 2012 Henry Auer