New U.S. Limits on Power Plant Carbon Emissions: Five Points

The Obama administration on Friday unveiled the first-ever national limits for carbon emissions from new power plants in the United States–a step that seeks to reshape the debate on climate change in the inevitable political and legal battles that lie ahead. (See related, “Four Ways to Look at Global Carbon Footprints.”)

“We must meet our moral obligation for the next generation,” U.S. Environmental Protection Agency Administrator Gina McCarthy said as her agency released a 463-page proposed regulation that has been years in the making. Indeed, it was a lawsuit filed against President George W. Bush’s administration by McCarthy’s home state of Massachusetts that laid the groundwork for Friday’s announcement. The landmark 2007 U.S. Supreme Court ruling said that colorless, odorless, ubiquitous carbon dioxide was indeed an air pollutant under the 1970s-era Clean Air Act, meaning the EPA was obliged to act.

The regulation announced Friday becomes the first major initiative by McCarthy,  who only recently took office after a record 136-day confirmation fight in the U.S. Senate. Her remarks and the EPA proposal outline the strategy for putting into effect the vision that President Barack Obama laid out earlier this year for climate change action. (See related: “Obama Unveils Climate Change Strategy: End of Line for U.S. Coal Power?“) Here are the key points McCarthy and her agency sought to make:

Climate Change Is a Human Health Issue

McCarthy spoke at length on the health impacts of climate change, from the disease carried by the mosquitoes and ticks that thrive in a warmer climate to the longer allergy season. She hearkened back to the work of the EPA from its first days in the 1970s in tackling urban smog, and its connection to today’s environmental battle. “We know this issue, and one thing we know is when it gets hotter, smog gets worse, and when smog gets worse, people of all ages suffer,” she said. The reason for the emphasis on health effects is not just because it is politically more resonant than more subtle or longer-term impacts on the planet. EPA’s legal obligation under the Clean Air Act to tackle carbon dioxide pollution stems from the agency’s obligation to protect human health.  (See related “Five Reasons for Obama to Sell Climate Change as a Health Issue.”)

The Technology Is Here Today

McCarthy said the EPA was confident that the proposed standards were “both flexible and achievable.” Far from spelling the end to new U.S. coal plants, as many in the industry have suggested, she said “they pave a path forward for the next generation of power plants,” and “reflect the demonstrated performance of a variety of clean, home-grown technologies.” EPA officials believe that there are four power plant projects currently under construction or being planned that would use the type of carbon capture technology needed to meet the tough new plant standards: Southern Company’s Kemper facility in Mississippi;  the Boundary Dam Integrated Carbon Capture and Storage plant in Saskatchewan, Canada; the Texas Clean Energy Project near Odessa; and the Hydrogen Energy California Plant near Bakersfield. (A “carbon capture-ready” plant being constructed by Duke Energy in Edwardsport, Illinois does not have the technology, but is built in a way that it could be added.) A major stumbling block will be the fact that these plants are extremely expensive. Kemper’s $1 billion cost overrun, for instance, has touched off a revolt by ratepayers and credit problems for Southern Company’s Mississippi Power. (See related, “Amid Economic Concerns, Carbon Capture Faces a Hazy Future.“)

Auto Industry Fuel Economy as a Model?

Look for the Obama administration to seek to repeat with the power industry its success in hatching a deal with the auto industry to increase fuel economy standards and curb carbon emissions from transportation. Of course, the White House had unprecedented leverage to bring automakers to the bargaining table, as they were seeking a federal bailout at the time. The deal put into place new rules that will force automakers to double the average efficiency of their fleets to 54.5 miles per gallon (23 kilometers per liter) by 2025. “Far from the auto industry collapsing, it is thriving,” McCarthy said, indicating it could serve as a model for how to reduce pollution and enhance competitiveness. (See related, “Pictures: A Rare Look Inside Automakers’ Drive for 55 MPG.“)

Hastening the Move to Natural Gas

Under the proposed regulations, coal power plants would be limited to emissions of 1,100 pounds of carbon dioxide per megawatt-hour of electricity that they generate. (They could opt for some flexibility by meeting an average over multiple years if they agree to a tighter limit.)  That would mark about a 40 percent reduction over current coal plants in the United States, which average about 1,800 pounds of CO2 per megawatt-hour. But the proposed limit for natural gas plants, about 1,000 pounds of CO2 per megawatt-hour, already is achievable by new state-of-the-art combined cycle natural gas plants. Such a framework would give an added impetus to the economic push to natural gas and away from coal due to abundant natural gas from fracking in the United States. (See related, “Florida Blasts Away Old Power Plant to Make Way for New.”  The electric power industry’s main industry group praised the administration’s approach on natural gas plants while criticizing the standard for coal plants.

More to Come on Old Power Plants

McCarthy took pains to repeat that the proposal only applied to new power plants. The EPA is currently working on a separate proposal for the more difficult issue of what to do about the existing fleet of power plants, which are the largest U.S. source of carbon dioxide emissions. She said the agency plans to unveil a proposal for comment in June 2014, after working with states, local government, industry, environmental groups, and labor on how to shape a plan. She said the EPA intends to take into account regional differences and to build flexibility into its approach.