Southern Balks at EPA Rules That Cite Carbon Capture

Southern Co., which is building the nation’s only commercial power plant that will capture its own carbon emissions, criticized a proposal from the federal government to require all new coal plants to use the technology.

At a public hearing today at the Environmental Protection Agency headquarters in Washington, industry representatives said the agency went too far in its proposed limits on carbon-dioxide emissions from new power plants. The technology isn’t commercially available and doesn’t have the rules in place to govern its use, they said.

Southern said the plant it’s building in Kemper, Mississippi, which the EPA cited in its proposal, shouldn’t be viewed as a model. It “should not be used in developing a national standard for greenhouse gases,” Danny Herrin, the Atlanta-based company’s environmental director, testified.

The EPA in September released a draft of the rules that effectively require new coal-fired plants to capture and store a portion of the carbon dioxide they produce. The rules are a key part of President Barack Obama’s plan to combat global warming by addressing the top source of carbon-dioxide emissions.

“Experiences gained from the Kemper County energy facility, as well as from many more fully integrated applications” of the system “on full-scale power plants, are needed before the technology can be considered adequately demonstrated,” Herrin said.

Religious Leaders

Environmental advocates, religious leaders, medical professionals and mothers and grandmothers also testified today, mostly in support of the plan or asking the agency to go further. For example, the EPA proposal sets a standard of emissions for new natural gas plants that they can achieve without carbon capture. Environmental groups said that doesn’t go far enough to encourage research and development.

The standard “is supposed to be technology forcing,” said Felice Stadler, senior director for climate at the National Wildlife Federation. “You have to put a marker out there.”

Industry representatives said that when it came to coal, that’s just what the EPA did, and they don’t like it. Until plants using carbon-capture technology are up and running, with a track record that shows they work, they shouldn’t be mandated, they said. That’s become especially clear given the recent jump in natural gas prices last month as temperatures dropped and power demand surged.

Fuel Diversity

“It’s about fuel diversity,” said Eric Holdsworth, director of climate programs at Edison Electric Institute, a Washington-based trade group representing utilities such as Southern and American Electric Power Co.

Southern is trying to license worldwide the technology that gasifies low-cost lignite coal and then captures and sells off some of the carbon dioxide. Herrin argued that the specific characteristics of the area in Mississippi, which has both lignite and nearby oil fields that can use the carbon dioxide, mean the Kemper plant can work there, but not everywhere.

Kemper is “only a first step in the integration of one type of carbon capture technology with a specific generation technology,” he said.

In the EPA proposal, limits for new coal-fired plants would be 1,100 pounds of carbon dioxide for each megawatt hour of power they produce, a standard that can’t be met without carbon-capture technology. Large gas plants would need to meet a 1,000 pound standard, which won’t require exceptional technology. Industry groups also said that standard is too tight, because plants can’t meet it in real-world conditions.

The rules were embraced by environmental groups and other lawmakers who have been seeking new methods to curb carbon emissions, even though have lacked consensus in Congress to achieve their goals.

“The price of control technology will drop,” said Representative Henry Waxman, a California Democrat who wrote the cap-and-trade climate measure of 2009 that never passed the Senate. “Right now we are all subsidizing the uncontrolled burning of coal. They are not paying for what they are doing to this planet.”

Before it's here, it's on the Bloomberg Terminal.