INSIGHT: EPA power rules seen to threaten electricity supply

12 September 2013 16:55  [Source: ICIS news]

By Joe Kamalick

Industries asks EPA boss McCarthy to engage them in rulemakingWASHINGTON (ICIS)--As federal environmental regulators are poised to issue new emissions caps for electric power generation, a broad coalition of industry warned this week that the continued availability of affordable and dependable electricity is at risk.

The Environmental Protection Agency (EPA) is to issue by Friday next week, 20 September, a revised set of rules limiting emissions of carbon dioxide (CO2) and other greenhouse gases (GHG) from any new electric power generating plants.

EPA initially offered a proposed rule governing new power plant emissions in March last year, but that plan came under fire from a barrage of objections among more than 2m public comments, with many warning that the agency’s plans could thwart most if not all new electric power facilities.

In addition to the revised EPA plan for new power plants due next week, the agency also is working on a second set of rules that would establish emissions limits for existing electric generating stations.

As the already aired but soon to be revised EPA plans for new power plant emissions suggest, the agency is widely expected to set emissions rules for existing electric generators that essentially would bar use of coal as a generating fuel.

That second batch of power plant emissions restrictions is expected in June next year.

Already rattled by what they saw as a draconian first draft of emissions rules for new power plants in April, a coalition of power generating firms and major electric power consumer industries this week reminded EPA that President Barack Obama wanted stakeholder input on the agency’s rulemaking process.

In their letter to newly installed EPA administrator Gina McCarthy, industry representatives noted that in his memo to the agency directing the rulemaking, Obama specifically instructed that EPA consult stakeholders in drafting power industry emissions limits.

In his memo, Obama said that EPA should to the greatest extent possible directly engage with state governments, power sector leaders, labour officials, non-government groups, other stakeholders and members of the general public “on issues informing design of the programme”.

Obama also directed that in drafting power sector emissions limitations EPA must “ensure that the standards enable continued reliance on a range of energy sources and technologies”, presumably but not explicitly including clean coal.

In addition, Obama said EPA was to “ensure that the [emissions] standards are developed and implemented in a manner consistent with the continued provision of reliable and affordable electric power for consumers and businesses”.

It is concern about prospects for potentially sharp limits on some power fuels, namely coal, that apparently drove the 13 trade groups to press McCarthy for urgent consultations.

“As stakeholders, we respectfully request that we be actively included in any discussions the agency undertakes to design the program to regulate carbon emissions from the electric power sector,” the letter to McCarthy said.

The trade groups, including the American Chemistry Council (ACC) and the American Fuel and Petrochemical Manufacturers (AFPM), said that “it is critical that carbon regulations are developed using the best available technical information to ensure that standards are set at achievable levels based on commercially and economically viable technologies”.

The group of 13 trade representatives also cautioned that EPA’s power plant emissions rules must “take proper account of potential impacts to the economy and jobs”.

In addition to the petrochemical, chemical and refining interests represented in the coalition, others include the American Coalition for Clean Coal Electricity, the American Farm Bureau Federation, the American Iron & Steel Institute, the National Association of Manufacturers and the Association of American Railroads.

Hauling coal to electric utilities is a major revenue-generator for US freight rail operators.

Referring to the pending EPA rules on new power plant emissions caps due late next week, the industrial and agricultural groups urged that the agency “provide a realistic path forward that does not foreclose the use of any one fuel source for generating electricity”, an apparent reference to coal-fired power plants.

The industry groups called on EPA to draft the new power plant emissions rule to support an “all of the above” strategy that would not exclude any energy source.

Rather than a power emissions standard of the “one size fits all” variety, the industry advocates suggested a tiered approach.

“We strongly urge you to set performance standards for different fuels and electric generating technologies” they said, to “balance the desire for reducing carbon emissions with real-world impacts, including the continued availability of affordable and dependable electricity on which this country relies”.

“With the potential to touch nearly every sector of the US economy, it is critical that any effort by EPA to set carbon standards be done right and include significant input from impacted industries,” the letter to McCarthy concludes.

In addition to such major power consuming sectors as chemicals, other manufacturing and agriculture, the concerned group of course includes power interests such as the Electric Reliability Coordinating Council.  The US Chamber of Commerce also is a signatory to the letter, representing some 3m American companies.

Members of Congress also are concerned that EPA and other federal agencies are over-reaching in their zeal to implement Obama’s second-term climate policies.

On 18 September, Wednesday of next week and just two days before EPA is to issue its revised emissions rule for new power plants, the House Committee on Energy and Commerce is to hold hearings on the Obama administration’s “Climate Action Plan”.

That plan includes the White House mandate for electric power emissions limits among many other goals.

Committee chairman Ed Whitfield, a Republican from the coal state of Kentucky, has asked the EPA and a dozen other federal agencies to send representatives to next week’s hearing to provide details “about US climate change policies and the administration’s second-term climate agenda”, including new regulatory requirements.

There are likely to be some pretty heated emissions at that hearing.

Paul Hodges studies key influences shaping the chemical industry in Chemicals and the Economy

By: Joe Kamalick
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