US to force major cuts in power plants' CO2 emissions

02 June 2014 16:23 Source:ICIS News

US to force major cuts in power plants CO2 emissionsWASHINGTON (ICIS)--The Obama administration on Monday announced proposed rules to cut carbon emissions by the nation’s electric power industry, saying that US utilities must reduce their CO2 emissions to 30% below the 2005 level by 2030.

In a joint release by the White House and the Environmental Protection Agency (EPA), the administration said that its massive, 626-page proposed emissions rule will “help slow climate change”, improve the health of Americans and actually reduce electric power costs by 8% when the regulations are implemented.

The proposal would allow states to choose which methods to meet the federally mandated emissions cuts, selecting from among fuel-switching, carbon trading and energy efficiency measures to effect the required CO2 reductions.  If states decline to make such arrangements, EPA will step in to effect the CO2 emissions cuts with additional, state-specific regulations.

The proposed regulation will be subject to public comment for four months, and a final rule will be issued in June next year, the EPA said.

The long-expected proposal came under immediate attack.

The National Association of Manufacturers (NAM) said on Monday that if implemented, “the EPA plan could single-handedly eliminate the competitive advantage [of US manufacturers] by removing reliable and abundant sources of energy from our nation’s energy mix”.

NAM and many other industry sectors, inducing the refining and petrochemicals sectors, have warned that such mandated reductions in CO2 emissions essentially will force the shutdown of all existing US coal-fired power plants.

The American Chemistry Council (ACC) cautioned that the EPA plan could lead to higher energy prices, and “that would make it more difficult for manufacturers to compete abroad and grow and hire in the US”.

“Since many chemistry processes require large amounts of electricity and natural gas, the US chemistry industry is highly attuned to how EPA’s regulations for the electricity sector could affect energy markets,” the council said.

US petrochemicals producers and downstream chemicals manufacturers are heavily dependent on natural gas as both a feedstock and energy fuel. 

Many in the industry have expressed concern that the EPA emissions cuts will force coal-fired utilities to switch to natural gas, a shift that could greatly increase demand for and prices of natgas.

Industry officials and members of Congress have accused the administration of waging a “war on coal”.

House Energy and Commerce Committee chairman Fred Upton (Republican-Michigan) charged that President Obama is trying “to regulate where Congress refused to legislate”, referring to the administration’s failure in 2010 to get a carbon cap-and-trade bill through the Democrat majority Congress.

Upton also challenged the EPA claim that the new emissions caps would lower the cost of electric power to consumers.

“The president promised that under his plan electricity rates would ‘necessarily skyrocket’, and this is one promise he is actually delivering on”, he said.

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

By Joe Kamalick