US issues new caps on power, draws wide industry opposition

20 September 2013 17:03  [Source: ICIS news]

WASHINGTON (ICIS)--The US on Friday issued revised proposals to limit carbon dioxide (CO2) emissions by new power plants, but the plan was met quickly with broad condemnation by industry on grounds that the rules will stifle energy and raise costs.

In issuing its amended plan for limiting carbon emissions from any future power plants, the Environmental Protection Agency (EPA) agreed to set different caps for varied fuel types.

In its original proposed emissions limits for new power plants, issued in April last year and also broadly opposed by industry, the EPA had set a single, across-the-board standard for all new electricity generating facilities.

The revised proposed rule issued on Friday limits carbon emissions by new natural gas-fired power plants to 1,000lb (454kg) of CO2 per gigawatt hour (GWh), but any future coal-fired facility would face a cap of 1,100lb/GWh.

Carbon emissions of existing coal-fired power plants typically are twice that level.

EPA administrator Gina McCarthy said the new emissions caps represent “common sense action to limit carbon pollution from new power plants”, saying that “climate change is one of the most significant public health challenges of our time”.

She said that with the proposed rules for new power plant emissions “we can slow the effects of climate change and fulfil our obligation to ensure a safe and healthy environment for our children”.

McCarthy said the new standards “will also spark the innovation we need to build the next generation of power plants, helping grow a more sustainable clean energy economy”.

But comments and opposition voiced by a wide variety of industries and state governments contend that the only way that new coal-fired power plants can meet the EPA’s proposed limits would be to use carbon capture and storage (CCS) technologies, which have yet to be proved on a commercial or economical scale.

The consequence, they argue, is that with Friday’s rulemaking, the EPA has effectively banned any future coal-fired power generation.

The American Chemistry Council (ACC) said the new EPA limits “could have far-reaching impacts on the nation’s energy system”.

“We are concerned that the emission limit for coal combustion technologies is unachievable and will harm energy diversity by effectively ending construction of new coal-fired power plants in the US,” the council said.

The ACC expressed concern that the agency’s proposed emissions limits for future power plants will be reflected in a regulatory plan that EPA is on schedule to issue by June next year governing existing power generation.

US chemicals manufacturers have long been concerned about administration moves to discourage or bar coal-fired power for fear that such policies will create still more utility and other industrial demand and increasing prices for natural gas.

The US chemicals sector is heavily dependent on natural gas as its principal feedstock and as a primary on-site power fuel.  As major consumers of electric power, chemicals producers also worry that an effective ban on coal-fired power will drive electricity costs higher.

The National Association of Manufacturers (NAM) suggested that the EPA was over-reaching its authority under the Clean Air Act (CAA) and accused President Barack Obama of a “misguided vision” in his policy directives to “eliminate fossil fuels from our economy”.

NAM president Jay Timmons said: “The decisions the EPA makes in these regulations – such as mandating technologies that are not yet commercially feasible – will have far-reaching consequences not only on our energy supply but also on the operations of all manufacturers”.

The US Chamber of Commerce also slammed the revised emissions limits, charging that “the EPA is continuing to move forward with a strategy that will write off our huge, secure, affordable coal resources by essentially outlawing the construction of new coal plants”.

Chamber vice president Bruce Josten said the EPA has “released yet another major regulation that will hamper economic growth and job creation and could lead to higher energy costs for American families and businesses”.

“This is another example of the administration’s desire to impose a stifling new layer of regulations on our economy that stretches the Clean Air Act beyond its limits,” he added.

The Institute for Energy Research (IER), an energy industry think-tank, said the EPA’s proposed limits on CO2 emissions will have no effect on climate and that “the only impact today’s announced rule will have is on the pocketbooks of American consumers, who will pay skyrocketing electricity costs”.

IER president Thomas Pyle suggested the White House is working to “direct the US economy away from our affordable and abundant coal and natural gas resources to expensive and unreliable renewables”.

The EPA, Pyle said, has stated that “the goal for this rule is to reduce the impacts of climate change”.

“Where, then, is EPA’s analysis of how this rule will reduce the most often cited impacts of climate change?”

The revised EPA proposal for emissions limits on new power plants will be open to public comment for 60 days and will likely be made final by the end of this year or in early 2014.

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

By: Joe Kamalick
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