New Coal Plants Must Capture Carbon Dioxide Output: EPA
By Mark Drajem - Sep 20, 2013 8:59 AM ET
A coal burning plant in South Dakota. Photographer: Bruce Crummy/Fargo Forum Newspaper via AP Photo
New coal-burning plants will be required to limit the carbon dioxide they release under the U.S. Environmental Protection Agency’s first regulations aimed at curbing climate change by power generators.
The EPA issued the draft rules today, meeting a deadline President Barack Obama set out in an address on climate change in June. The rules effectively require coal-fired plants to capture and store a portion of the carbon dioxide they produce, something the industry says is so costly it would preclude the construction of new plants.
“These carbon pollution standards are flexible and achievable,” McCarthy said today in remarks prepared for delivery at the National Press Club in Washington. “They pave a path forward for the next generation of power plants.”
The EPA’s move sets the stage for the more far-reaching set of final rules governing emissions from existing power plants, due by June 2014. While restrictions on emissions of sulfur dioxide and other pollutants have been in place for years, these will be the first for gases most blamed for global warming.
“The most important thing about the new plant rule, is that it’s crossing the Rubicon to say that we are going to put limits on carbon pollution,” David Goldston, the director of government affairs at the Natural Resources Defense Council, said before the rule was released. “It’s important as a precursor” for existing-plant rules, he said.
The administration agreed in June to revise last year’s draft rules on greenhouse-gas emissions from power plants after legal experts questioned its methodology in setting one standard for coal and another for natural-gas plants. Coal emits about twice the carbon dioxide as natural gas when burned to make power.
Limits for new coal-fired plants would be 1,100 pounds of carbon dioxide for each megawatt hour of power they produce, a standard that can’t be met without carbon-capture technology, McCarthy said in her remarks. Most gas plants would need to meet a 1,000 pound standard, which won’t require exception technology.
“The president is leading a war on coal and what that really means for Kentucky families is a war on jobs,” Senate Minority Leader Mitch McConnell, a Kentucky Republican, said in an e-mail. “The announcement by the EPA is another back door attempt by President Obama to fulfill his long-term commitment to shut down our nation’s coal mines.”
Carbon-dioxide emissions since the Industrial Revolution have led to a warming of the Earth’s temperature in the past 50 years, worsening forest fires, drought and coastal flooding, according to the U.S. Global Change Research Program.
The fall in gas prices and regulatory efforts by the EPA have depressed investor enthusiasm for coal companies.
The stock of Peabody Energy Corp. (BTU), the biggest U.S. producer, fell from more than $70 a share in April 2011 to less than $20 a share today. Arch Coal Inc. (ACI)’s stock fell from $35 a share in April 2011 to about $5 a share today. Meanwhile, utilities are shuttering old coal plants, and switching to gas for baseload power production.
To deal with the threat of global warming, Obama directed the EPA to cap carbon pollution from power plants, which account for 40 percent of U.S. emissions.
The rules issued today set a limit on carbon-dioxide emissions from coal plants that can only be met with technology to capture that gas, and then inject it underground for storage. That technology, called CCS, isn’t yet being used on a commercial scale as the first large-scale plant is under construction by Southern Co. in Mississippi. That plant, which received $270 million in subsidies from the federal government, is facing local opposition and $1 billion in cost overruns.
“Simply because EPA may set a carbon standard that requires CCS technology is insufficient to overcome the technical, legal, regulatory and financial hurdles facing CCS technology,” Scott Segal, a lobbyist at Bracewell & Giuliani LLP, which represents electric utilities such as Southern and coal producers such as Arch Coal, said in an e-mail before the EPA announcement.
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