US chemical sector warns regulator on greenhouse limits rules

07 November 2013 17:31  [Source: ICIS news]

WASHINGTON (ICIS)--US chemical industry leaders on Thursday warned that if federal environmental officials restrict greenhouse gas (GHG) emissions from existing electric power plants, it could significantly affect energy markets and drive power prices higher.

Speaking for the American Chemistry Council (ACC), Lorraine Gershman told an Environmental Protection Agency (EPA) public hearing that the agency’s plan to regulate GHG emissions at existing power plants “has the potential to significantly affect this country’s energy markets, including the cost, availability and reliability of natural gas and electricity for all consumers, from large industrial facilities to individual households”.

In September this year, EPA issued revised proposals to limit GHG emissions by any new electric power utility. But the agency also is working on a separate set of rules that would apply GHG restrictions to existing power plants.

The 20 September EPA proposal to limit emissions by new power plants came under broad attack by a variety of industries, including chemicals manufacturers. 

They complained that the proposed rules would effectively bar construction of any new coal-fired power plants, which in turn would accelerate already advanced fuel-switching among electric utilities from coal to natural gas - the US chemical industry’s principal feedstock and power source.

The proposed rule sets a limit of 1,000lb (454kg) of carbon dioxide (CO2) emissions per gigawatt hour (GWh) for planned electric utilities powered by natural gas. And any future coal-fired facility would face a cap of 1,100lb/GWh.

Carbon emissions of even the most modern coal-fired power plants are nearly twice that level.

Chemical producers and other manufacturers worry that EPA will impose the same or similar emissions restrictions on existing power plants when it issues those proposed rules in June 2014.

If so, such restrictions would force most if not all existing coal-fired power plants to shut down.

Gershman, director of regulatory and technical affairs at ACC, told the EPA hearing that its move to limit GHG emissions by existing power plants was further worrisome “because it could also set a precedent for EPA regulation of GHG emissions from other sectors”, such as chemicals production and other manufacturing.

She urged that if the agency does move ahead with plans to impose emissions limits on existing power units, those rules should be flexible and “follow the best system of emission reductions for each individual source” rather than a one-size-fits-all mandate.

Gershman also asked that any rules on existing power plant emissions set reduction goals that are achievable and can be met with currently available and proven technology. In addition, she cautioned that limits on existing plants’ emissions should allow those facilities to reach what would be their expected useful life-span.

EPA is conducting a series of 11 public hearings across the country in advance of drafting its anticipated rules on existing power plant emissions.

The final agency rule affecting emissions for any new power plants to be built is expected in early 2014.

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

By: Joe Kamalick
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