EPA Introduces First Greenhouse-Gas Limits for Power Plants

Photographer: Daniel Acker/Bloomberg

The Great River Energy Coal Creek Station coal fueled power plant in Underwood, North Dakota. Close

The Great River Energy Coal Creek Station coal fueled power plant in Underwood, North Dakota.

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Photographer: Daniel Acker/Bloomberg

The Great River Energy Coal Creek Station coal fueled power plant in Underwood, North Dakota.

The Environmental Protection Agency proposed the first limits on greenhouse-gas emissions from U.S. power plants, the largest source of carbon dioxide linked to climate change.

The rules will permit emissions from new power plants at 1,000 pounds of carbon dioxide per megawatt hour, about the level for a modern natural-gas plant, the EPA said today in an e-mailed statement. The limit would effectively preclude construction of new coal-fired plants, which are struggling to compete with decade-low natural gas prices.

“This is an important common-sense step towards tackling the ongoing threat of climate change,” Lisa Jackson, administrator of the EPA, told reporters today. “We build on where the industry is going and lock that trend in, which we believe is an important signal for investors.”

The proposed nationwide standard is the first of its kind issued by the EPA for carbon dioxide. With the failure of Congress to cut carbon emissions, agency actions are seen by environmental groups as the best chance to combat global warming.

“This is a milestone in the fight to rein in climate change,” Joe Mendelson, climate-policy director for the National Wildlife Federation, said in a statement. “The EPA is taking a big step toward protecting the world our children will inherit.”

Global Warming

Carbon-dioxide emissions since the Industrial Revolution have led to a warming of the earth’s temperature in the past 50 years, threatening to cause extreme weather, drought and coastal flooding, according to the U.S. Global Change Research Program.

The rule would only apply to construction of new plants, and Jackson said the administration has no plans to issue rules that would affect existing plants. The proposal also would exempt 15 plants with pending construction permits, and provides leeway for new coal plants to phase in expensive carbon-capture technology over 30 years. Plants building controls to comply with other EPA pollution rules would also not be subject to this standard.

The initial impact would be minimal as utilities are closing, not building, coal plants because natural gas prices are at 10-year lows. The share of coal in electricity generation dropped below 40 percent by the end of 2011, the lowest since 1978, according to the U.S. Energy Information Administration in Washington.

‘War on Coal’

Coal-state lawmakers said the proposal is part of a “war on coal” by President Barack Obama’s administration. A letter from 221 lawmakers to the White House this year asked that the rule be dropped, and the EPA issued two sets of standards last year targeting other pollution from coal plants.

“I continue to be outraged at this administration’s war on coal,” Representative Ed Whitfield, a Kentucky Republican, said in a statement. “We’re seeing coal-fired electricity plants close and will likely see electricity rates skyrocket because of EPA’s other regulations and the greenhouse gas standards will only make matters worse.”

The EPA said the rule wouldn’t add costs for power providers because no coal plants are likely to be built in the next two decades unless the facilities have carbon-capture technology. Industry groups say that technology isn’t ready for commercial use.

‘Commercially Available’

It “is neither economically viable nor commercially available,” Scott Segal, a lobbyist for power providers such as Southern Co., wrote in a letter to the White House on March 12 in an attempt to head off the regulation.

The average U.S. coal plant emits 2,249 pounds of carbon dioxide for each megawatt hour of power produced, compared with 1,135 pounds for a natural gas plant, according to the EPA.

Newer combined-cycle natural-gas plants, in which the heat exhaust of a first gas-fueled turbine drives a second generator, are more efficient. Of those plants built since 2005, 95 percent could have met the proposed standard, according to the EPA.

Jackson backtracked today from rules the EPA had pledged to release on carbon-dioxide emissions from existing power plants. In late 2010, the agency agreed in a court settlement to issue rules for both existing and new plants. Last year it delayed those rules, and Jackson said March 22 that the agency was negotiating with environmental groups to come up with a new schedule for standards on existing plants.

She didn’t mention those talks today: “We have no plans to address existing plants,” she said.

To contact the reporter on this story: Mark Drajem in Washington at mdrajem@bloomberg.net

To contact the editor responsible for this story: Jon Morgan at jmorgan97@bloomberg.net

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