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Shuttered Coal Plants Seen Cutting Cost of Carbon Rules

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March 20 (Bloomberg) -- The cost of limiting power-plant emissions has fallen because cheap natural gas is already shuttering some coal-powered facilities that would be at risk, an environmental group said today in a study.

The Natural Resources Defense Council, which is pushing the Environmental Protection Agency to impose strict limits on greenhouse-gas emissions, released an updated analysis of what rules would accomplish and the impact on coal plants and lower-carbon energy sources. The EPA says it will issue its proposed rules in June.

“We could eliminate hundreds of millions of tons of carbon pollution, save thousands of lives and stimulate a surge in clean energy and energy efficiency investments, and all at a lower cost than many would imagine,” said Dan Lashof, director of climate and clean air at the New York-based group.

President Barack Obama has pledged to cut U.S. greenhouse gases about 17 percent by 2020 over 2005 levels, a goal that groups such as Resources for the Future say requires the EPA to order deep cuts in power-plant emissions. Power plants are the top source of carbon-dioxide emissions.

Just after Obama was re-elected, NRDC issued the most detailed proposal for how the EPA could use regulations under the Clean Air Act to limit emissions from power plants. Because coal plants emit twice as much carbon dioxide as a natural-gas plant of the same size, much of the discussion about those rules has focused on how or whether coal could survive.

Ideas Embraced

Obama embraced the NRDC’s ideas in his climate announcement in June, and the EPA is preparing rules for existing power plants.

Lashof said that the group in its report today took account of revised baseline projections showing lower emissions as electricity demand stagnates, coal plants close and solar and wind power use accelerates. It also took into account criticism of earlier projections that energy efficiency would ramp up to meet cuts in coal generation.

If efficiency gains are constrained, more coal plants may install carbon-capture technology, and then sell that carbon-dioxide to oil producers who use it to stimulate production in old oil fields, Lashof said. The sale of the carbon dioxide makes the investment worthwhile, he said.

Overall, the most ambitious plan, which would achieve a cut of 30 percent in power plant emissions by 2020, would cost $14.6 billion, according to the NRDC. Less restrictive plans would cost from nothing to achieve a 24 percent reduction, to $11.1 billion to reach a 31 percent cut, assuming that energy efficiency can ramp up.

“We found we could make deeper reductions at a cheaper cost,” Lashof said in an interview.

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

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

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