The EPA Program to Reduce Greenhouse Gas Emissions from Existing Power Plants

Summary. The U. S. Environmental Protection Agency issued a Proposed Rule - Carbon Pollution Emission Guidelines for Existing Stationary Sources: Electric Utility Generating Units, in June 2014. It establishes a goal of reducing carbon dioxide emissions from existing electricity generating plants by 30% nationwide by 2030. In order to accomplish this with a great degree of flexibility, state-by-state limits were established, which each state is to achieve after submitting a detailed plan to EPA for review, approval, and verification as the plan is implemented.

EPA foresees significant reductions in emission of carbon dioxide, as well as other detrimental pollutants that affect human health from the proposed rule. The costs expected to be incurred in implementing the plans are recovered by the beneficial impacts of the lowered emissions, both climatically (carbon dioxide) and health related.

The proposed rule constitutes an important step in achieving President Obama’s Climate Action Plan. It also has the significant effect of solidifying the credibility of the

U. S.

as international negotiations proceed toward a new worldwide treaty to constrain global warming.

Introduction. President Obama released the

U. S.

Climate Action Plan on June 25, 2013. It includes several specific measures to reduce emission of carbon dioxide (CO₂), an important greenhouse gas (GHG) in the

U. S.

in order to minimize the worsening of global warming. Warming arises because CO₂ and other GHGs, when emitted into the earth’s atmosphere, trap some heat radiation that would otherwise escape into space. The trapped heat remains in the atmosphere and warms the earth system, both land and oceanic, more that would happen otherwise.

The principal source of the excess CO₂ entering the atmosphere is humanity’s burning of fossil fuels for energy that has powered the industrial revolution around the world. President Obama’s Climate Action Plan seeks to change

America

’s energy economy by reducing GHG emissions.

As a component of the Plan, the U. S. Environmental Protection Agency (EPA) issued a Proposed Rule - Carbon Pollution Emission Guidelines for Existing Stationary Sources: Electric Utility Generating Units (the Guidelines) on July 18, 2014. EPA points out that it has authority to formulate a rule governing emissions under the Clean Air Act as interpreted by the U. S. Supreme Court in 2007. (As part of the process for finalizing the rule, the EPA is accepting formal comments from the public at this link until October 16, 2014. After accepting and reviewing comments from the public the Guidelines will be issued as a rule in June 2015.)

The Guidelines are summarized in this post.

About one-third of all CO₂ emissions in the

U. S.

come from electricity-generating power plants. The table below shows the time course of these emissions over a recent 22-year period, broken down into contributions from the three main fossil fuels.

Table 4—U.S. GHG Emissions from Generation of Electricity from Combustion of Fossil Fuels in Tg CO₂ (Tg, teragram. 1 Tg = 1 teragram or 10¹² grams, equal to 1 million metric tonnes)

GHG emissions	1990	2005	2012
Total CO₂ from fossil fuel combustion EGUs	1,820.8	2,402.1	2,022.7
—from coal	1,547.6	1,983.8	1,511.2
—from natural gas	175.3	318.8	492.2
—from petroleum	97.5	99.2	18.8

EGU, electricity generating unit

Source: Federal Register: 79 FR 34829 -34958; https://www.federalregister.gov/articles/2014/06/18/2014-13726/carbon-pollution-emission-guidelines-for-existing-stationary-sources-electric-utility-generating#t-2

It is seen that burning coal has provided the vast majority of the CO₂ emitted, peaking in 2005. Use of natural gas has expanded dramatically in the time shown, due at least partly to new domestic sources for this fuel in the

U. S.

, from hydraulic fracturing wells. The following table shows relative values of the amount of CO₂ emitted per unit of heat obtained, compared to natural gas, from burning the three fossil fuels mentioned in Table 4 above, in other words a higher relative number characterizes the relative inefficiency of the fuels.

Fuel	CO₂ released per unit of heat obtained, relative to natural gas
Natural gas	1.00
Petroleum (fuel oil, gasoline)	1.37-1.48
Coal	1.75-1.94

The table shows that in producing the same amount of heat, for example to drive a steam turbine for generating electricity, almost twice as much CO₂ is emitted by burning coal than by burning natural gas. This difference between fuels suggests that any effort to minimize CO₂emissions from electricity generation will affect coal-burning power plants preferentially.

Reduced Emission of CO₂ and Other Pollutants. The Guidelines have been formulated to reduce CO₂ emissions from electricity generation by 30% below the levels emitted in 2005 by the year 2030, with interim goals established for the decade leading up to that year. It equates this reduction to the amount of CO₂that would have been produced to provide electricity for more than half the homes in the

U. S.

for one year.

Additionally, since the gains intended by this goal will likely result in lower utilization of coal in electricity generation, a “co-benefit” is at least 25% lower pollution from trace products of burning coal: small-size particulates (thought to contribute to or aggravate asthma), sulfur dioxide, and nitrogen oxides (which contribute to smog formation).

State-based Goals for Reduced Emission of CO₂. The Guidelines are based on a strategy of granting maximum flexibility in the ways envisioned to achieve their goals. Principal among these is the recognition that each state (or, in some cases, regional groups of states) covered by the Guidelines has its own antecedent history that has led to its present electricity generating capabilities. Accordingly, the Guidelines model the energy landscape for each state, and develop interim (2020-2029) and final (2030) goals for reductions in CO₂ emissions. These are shown in Table 8 (see Details).

Four strategies for reducing CO₂ emissionsare developed in the Guidelines. These are

Upgrading coal-fired electricity generation with efficient natural gas-burning capability at the same facility.

Substituting electricity generation from inefficient power plants with generation taking place at other, more efficient facilities.

Substituting electricity generation from inefficient power plants with renewable energy-sourced generation facilities. This can include upgrading and new construction of nuclear power plants.

Expanding the application of energy efficiency among end users of electricity.

It is envisioned that, in general, any combination of these strategies can be applied, including courses of action involving all four strategies. (It is noteworthy that the Guidelines, after due consideration, have eliminated carbon capture and storage (CCS) as an economically feasible strategy for reducing emission of CO₂ from existing power plants at this time. A report in the New York Times on July 22, 2014 describes the first major CCSupgrade project directly capturing CO₂ from a power plant, in Saskatchewan, Canada. The technology, the report says, reduces the plant’s output of electricity, has not yet been shown to store CO₂ safely underground, and is very costly.)

Under the Guidelines, each state will submit a plan to achieve its emissions goal to EPA for review. Once a plan is approved, the state will proceed to implement it. Among other requirements, the plans must propose actual reductions in emissions that are measurable, verifiable and enforceable. EPA devised this procedure in order to provide the greatest degree of flexibility to each state in meeting its specific target.

Costs and Benefits of the Guidelines. The Guidelines assess the compliance cost, and various energy and economic benefits arising from implementing the emissions reductions proposed.

Compliance costs are estimated, in terms of the value of the U. S. dollar in 2011, at between US$5.5 and US$7.5 billion in 2020 and between US$7.3and US$8.8 billion in 2030, annually.

Electricity prices are projected to increase 3% by 2030. 46 to 50 GW of coal-fired generating capacity may become uneconomical to operate and removed from service by then.

The Guidelines recognize that the required efficiencies will likely lead to job losses in directly-affected energy industry employment. But it also projects that new opportunities brought on by the need for energy improvements will create jobs in the energy industry, estimated at 25,900 to 28,000 in 2020. The demand for consumer-based energy efficiency is projected to create 78,700 jobs in 2020.

The health benefits from this reduction include an estimate of US$91 billion in enhanced economic value arising from as many as 6,600 fewer deaths, up to 150,000 fewer cases of asthma in children, and up to 490,000 fewer missed days in school. Other aspects of the Guidelines envision a reduction of about 8% in electricity bills arising from efficiencies introduced in the energy economy. Numerical examples of expected benefits are presented in the Details section at the end of this post in Table 2 introduced from the Guidelines.

Reductions in emission of CO₂ and health-related substances are shown in Details, Table 10. The value of climate improvements due to lowered CO₂ emissions and health-related co-benefits arising from reductions in sulfur dioxide, nitrogen oxides and particulate matter are estimated to be US$35 to US $57 billion in 2020 and US$57 to US$93 billion in 2030 (2011 dollars at a 3-percent discount rate).

Analysis

The Guidelines represent a highly significant step in achieving important reductions in CO₂, the principal greenhouse gas, by the

United States

at the national level. Previous actions by the Obama Administration have been directed at increasing the efficiency of motor vehicles and electricity generation by newly-constructed power plants.

The present Guidelines, however, must be considered only a first step in reaching a high level of “decarbonization” of our energy economy by 2050, for which a commonly mentioned goal is a reduction in annual GHG emission rates of 80%. This level of abatement is thought to be needed to keep the increase in the long-term global average temperature at less than 2ºC (3.6ºF) as envisioned by the Intergovernmental Panel on Climate Change.

The recent actions by the

United States

, and other aspects in President Obama’s National Climate Plan, have the beneficial effect of placing the

U. S.

in a position of undertaking concrete initiatives toward mitigating emissions. This should enhance its role in the worldwide negotiations, conducted under the United Nations Framework Convention on Climate Change, intended to formulate an agreement by 2015 and to having the agreement enter into force by 2020.

The EPA’s Guidelines were devised to create a high degree of flexibility in attaining the goal of reducing emissions from existing power plants. Goals for reductions were established on a state-by-state basis. Within detailed requirements presented by EPA, states are given the freedom to establish their own specific programs to attain these goals as best as they see fit. The corollary, made apparent in great detail in the Guidelines, is that EPA will need to establish a completely new bureaucratic structure to evaluate each state’s plan, monitor its progress, and enforce the achievement of the emissions goals. Assessing the documents from all 50 states and enforcing their implementation will be a very burdensome and potentially costly undertaking within the agency.

An alternative and far more efficient processwould be imposition of a tax on fossil fuels, levied at the point of extraction from the earth. This plan would have a minimal bureaucratic burden, but would require legislative action by the U. S. Congress. Given the present political environment, however, this is essentially out of the realm of possibility.

Nevertheless, both the Guidelines and a carbon tax impose an expense on the consuming public. But as the detailed climate and economic modeling presented in the Guidelines (which is restricted only to existing electricity generating power plants) shows, ultimate climatic, health-related and economic benefits result that far outweigh the costs incurred; comparable results may be expected across the entire energy economy from a carbon tax.

In summary, the Guidelines represent an important step at the national level in mitigating the emission of GHGs by the

U. S.

Details

Table 2—Summary of the Monetized Benefits, Compliance Costs, and Net Benefits for the Proposed Guidelines in 2030 for State-by-State Compliance.

	2011-valued US$, billions
Climate benefits	$31
Air pollution health co-benefits	$27 to $62
Total Compliance Costs	-$8.8
Net Monetized Benefits	$49 to $84
Non-monetized Benefits	Reduced exposure to sulfur dioxide and nitrogen dioxide. Eliminate 2.1 tons of mercury and 590 tons of hydrochloric acid emission. Ecosystem effects. Visibility impairment.

Net Monetized Benefits is obtained by combining Climate Benefits and Air pollution health co-benefits and subtracting Total Compliance Costs.

Adapted from the complete Table 2 in Federal Register: 79 FR 34829 -34958; https://www.federalregister.gov/articles/2014/06/18/2014-13726/carbon-pollution-emission-guidelines-for-existing-stationary-sources-electric-utility-generating#t-2

Table 8—Proposed State-by-State Goals for CO₂ Emission Rates (Adjusted output-weighted-average pounds of CO ₂ per net MWh from all affected fossil fuel-fired electric generating units).

State	Interim goal (2020-2029)	Final goal (2030)
Alabama	1,147	1,059
Alaska	1,097	1,003
Arizona *	735	702
Arkansas	968	910
California	556	537
Colorado	1,159	1,108
Connecticut	597	540
Delaware	913	841
Florida	794	740
Georgia	891	834
Hawaii	1,378	1,306
Idaho	244	228
Illinois	1,366	1,271
Indiana	1,607	1,531
Iowa	1,341	1,301
Kansas	1,578	1,499
Kentucky	1,844	1,763
Louisiana	948	883
Maine	393	378
Maryland	1,347	1,187
Massachusetts	655	576
Michigan	1,227	1,161
Minnesota	911	873
Mississippi	732	692
Missouri	1,621	1,544
Montana	1,882	1,771
Nebraska	1,596	1,479
Nevada	697	647
New Hampshire	546	486
New Jersey	647	531
New Mexico *	1,107	1,048
New York	635	549
North Carolina	1,077	992
North Dakota	1,817	1,783
Ohio	1,452	1,338
Oklahoma	931	895
Oregon	407	372
Pennsylvania	1,179	1,052
Rhode Island	822	782
South Carolina	840	772
South Dakota	800	741
Tennessee	1,254	1,163
Texas	853	791
Utah *	1,378	1,322
Virginia	884	810
Washington	264	215
West Virginia	1,748	1,620
Wisconsin	1,281	1,203
Wyoming	1,808	1,714

MWh, megawatt-hour

Table 10—Summary of CO ₂ and Other Air Pollutant Emission Reductions Expected from State-by-State Compliance.

	CO₂ (million metric tons)	SO₂ (thousands of tons)	NO_X (thousands of tons)	PM_2.5 (thousands of tons)
Base Case Proposed	2,256	1,530	1,537	198
Guidelines:	1,701	1,059	1,109	142
Emission Reductions	555	471	428	56

EPA Source: Integrated Planning Model, 2014.

SO₂: Sulfur dioxide; NO_x: Nitrogen oxides; PM_2.5: Particulate matter less than 2.5 microns in size.

Base Case Proposed: results projected in the absence of limits from the Guidelines.

Emission Reductions: Net reduction obtained by subtracting the Guidelines value from the Base Case Proposed Value. Arithmetic accuracy may not be exact due to rounding.

Source: Extracted from the complete Table 10 in Federal Register: 79 FR 34829 -34958; https://www.federalregister.gov/articles/2014/06/18/2014-13726/carbon-pollution-emission-guidelines-for-existing-stationary-sources-electric-utility-generating#t-2.