In an address given Tuesday at Georgetown University, President Barack Obama laid out his new climate change agenda, calling for a 40 percent reduction in greenhouse gas emissions from the coal-fired power plants that account for nearly half of the nation’s total.
Obama also pledged to increase permits for the clean energy industry, with the goal of having more than 6 million homes powered by clean energy by 2020.
Meanwhile, the president said the controversial Keystone XL Pipeline would be green-lighted only if it was proven not to create a net increase in carbon emissions. This follows a State Department report released in March that indicated approval of Keystone XL would not contribute to climate change, since the Alberta tar-sand oil that it would pump to the Gulf of Mexico would be mined with or without U.S. compliance.
Obama’s statements came as the Environmental Protection Agency planned to roll out its own set of regulations aimed at reducing carbon emissions from coal-fired power plants.
Even prior to Obama’s address, industry leaders were fighting back, creating a tug of war between energy companies and those seeking to limit the impending impacts of climate change.
In late May, controversy emerged in the Senate when Republicans demanded Gina McCarthy, Obama’s nominee to head the EPA, answer 1,000 questions, many of which had to do with the environmental and health impacts of coal-fired power plants. The deal on the table from Republicans indicated McCarthy wouldn’t be confirmed until she answered their questions — and answered them in a way that met their approval.
In early May, the EPA opened up a public comment period on proposals for regulations on new power plants. The comment period ended Tuesday.
Environmental organizations v. industry
Long before the president’s speech at Georgetown, environmental organizations and businesses were scrambling to influence the power plant regulatory process.
“The traditional industry response to EPA rule making is the EPA puts something out and then we respond to it,” Edison Electric Institute Director of Legal Affairs Emily Fisher told Reuters. “This is different in that we feel obliged to be more engaged early on.”
Not only have outside entities been engaged, they’ve also provided their proposals to tackle the issue directly to the EPA.
Both the Natural Resources Defense Council and the National Climate Coalition, which represents Shell, Boeing and Midwest Generation Energy, have provided the EPA with their own regulation drafts.
Not surprisingly, the two drafts are at odds.
The NRDC proposal aims to cut carbon emissions 26 percent by 2020. It does so primarily by targeting power plants already in operation, holding them accountable under the Clean Air Act.
The NRDC plan is sold on flexibility, providing states with various technological options for achieving the drawdown of carbon emissions. While the standards would be set at the federal level, it would ultimately be the responsibility of each individual state to come up with an individualized plan to meet the federal goals.
The plan is also sold on the premise that the initiative will encourage states to invest in clean energy technology, driving down costs and, in turn, alleviating consumers’ energy bills.
“We show that EPA can work with states and power companies to make large pollution reductions, by setting system-wide standards, rather than smokestack-by-smokestack ones, and by giving power companies and states the freedom to choose the most cost-saving means of compliance,” NRDC Director of Climate and Clean Air Programs Dan Lashof said in a press release.
Under the NRDC plan, however, not all states would be judged equally. States that are more coal-dependent would set higher emission reduction rate goals, set for 2020, than states that rely less on coal-powered energy.
The industry had a different response.
The National Climate Coalition proposal creates a barrier between coal-powered and gas-powered plants. This would mean that two standards exist between the two types of plants — a “smokestack-by-smokestack” approach.
The coalition plan also takes it a step further, claiming that utility companies could use the “average emissions,” allowing that to stretch across facilities, according to a Reuters report.
The coalition is headed by renowned environmental lawyer Robert Wyman Jr., who served on the EPA Clean Air Act Advisory Committee for nearly two decades. He also worked with the EPA in the realm of coal technology, according to his biography for Latham and Watkins law firm.
Wyman knows the ins and outs of the industry, and he claims the NRDC plan wouldn’t hold up legally, citing the fact that the EPA “cannot differentiate” among states. Therefore, he argues, the plan to set different emission reduction goals for states based on coal dependence wouldn’t work.
In December, the EPA released its proposals, which set standards that, if implemented, all new coal plants would be obligated to meet.
“EPA is proposing to take common-sense steps under the Clean Air Act to carbon pollution from new power plants,” the agency said in a December statement. “EPA’s proposed standard reflects the ongoing trend in the power sector to build cleaner plants and take advantage of American-made technologies.”
Again in May, the EPA indicated that standards would not apply to existing future power plants, which it refers to as “electric utility generating units,” or EGUs.
“The EPA is not proposing standards of performance for existing EGUs where CO2 emissions increase as a result of installation of pollution controls for conventional pollutants, or for proposed EGUs, which are referred to here as transitional sources, that have acquired a complete preconstruction permit by the time of this proposal and that commence construction within 12 months of this proposal,” the EPA states in its proposal summary. “As a result, these sources would not be subject to the standards of performance proposed in today’s rule.”
Those concerned about climate change say the EPA policy, as it stood, would not cause much change at all, as it only applied to future power plants. According to George Perida of NRDC, the market has already created incentives for future plants to be built energy-efficiently.
“Investing in a new coal-fired power plant these days is not an attractive option in general, for reasons quite apart from” the EPA proposal, Perida wrote. “Back in 2007, 50 or so new coal plants were proposed around the nation. Today, the vast majority of these proposals has been cancelled or put on indefinite hold due to a multitude of factors.”
Those factors include the understanding that issues regarding climate change aren’t likely to go away anytime soon. According to NRDC’s Dave Hawkins, material costs related to the construction of new power plants have increased along with natural gas supplies, leading to a trend that’s veering away from the coal-powered style of energy.
“Financiers know that denying the fact of global warming will not make it go away,” Hawkins wrote in an NRDC blog post. “So a project with high CO2 emissions has a large built-in financial risk that only grows over time. And that risk is unbounded, since without a clear policy roadmap it is impossible to make a reliable estimate of what it will cost to mitigate a conventional coal plant’s high CO2 emissions.”
Now, all eyes will be on the White House’s proposal and its impact on carbon emissions from an industry that contributes more than any other.
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