James E. McCarthy
Specialist in Environmental Policy
As President Obama announced initiatives addressing climate change on June 25,
2013, a major focus of attention was the prospect of greenhouse gas (GHG)
emission standards for fossilfueled— mostly coal-fired—electric generating
units (EGUs). EGUs (more commonly referred to as power plants) are the
largest anthropogenic source of greenhouse gas emissions, accounting for about
one-third of total U.S. GHGs. If the country is going to reduce its GHG
emissions by significant amounts, as the President has committed to do,
emissions from these sources will almost certainly need to be controlled.
The President addressed this issue by directing EPA to re-propose GHG emission
standards for new EGUs by September 20, 2013. He also directed the agency
to propose guidelines for existing power plants by June 2014, and finalize
them a year later.
EPA had already proposed standards for new sources in April 2012, but the
public comment period had generated more than 2.5 million comments—the
most ever for a proposed EPA rule— and the agency had not yet finalized
The re-proposed standards were released September 20. They would set an
emissions limit of 1,100 pounds of carbon dioxide (CO2) per megawatt-hour (MWh)
of electricity generated by new coal-fired EGUs, and a standard of either
1,000 or 1,100 lbs/MWh (depending on size) for new natural gas-fired
plants. Coal-fired plants would find it impossible to meet the standard without controls
to capture, compress, and store underground about 40% of the CO2 they produce—a technology
referred to as carbon capture and storage (CCS).
Under the Clean Air Act, the EPA Administrator has a great deal of flexibility
in setting these standards. The statute requires that New Source
Performance Standards (NSPS) reflect the degree of emission limitation
achievable through application of the best system of emission reduction that
has been “adequately demonstrated.” The Administrator can take costs, health
impacts, environmental impacts, and energy requirements into account in
determining what has been adequately demonstrated.
Many in the electric power and coal industries maintain that CCS has not been
adequately demonstrated. Given the high cost and energy use of CCS
components, they view the re-proposed standards as effectively prohibiting
the construction of new coal-fired power plants.
EPA, on the other hand, states that the components of CCS technology have been
demonstrated on numerous facilities. Details are provided in the preamble
to the proposed rule. Despite this, the agency concludes that no
coal-fired EGUs (other than DOE-sponsored or other demonstration projects)
will be built in the next 10 years regardless of whether the rule is finalized,
and therefore no units will be required to use CCS before EPA must review
the standard. Given the projected low cost and abundance of natural gas,
all new fossil-fueled units are likely to be powered by gas, according to
EPA. The standard proposed for these facilities (combined cycle natural gas
units) can be met without add-on emission controls, according to the
Although the September 20 proposal would only affect new EGUs, the potential
impacts of the rule’s issuance extends beyond these sources, because the
agency is obligated under Section 111(d) of the Clean Air Act to
promulgate guidelines for existing sources within a category when it
promulgates GHG standards for new sources. The President directed EPA to
propose such guidelines by June 2014 and to finalize them a year later.
Using these guidelines, states will be required to develop performance
standards for existing sources. These could be less stringent than the
NSPS—taking into account, among other factors, the remaining useful life of the
xisting source—but the standards could have far greater impact than the
NSPS, given that they will affect all existing sources.
Many in Congress oppose GHG emission standards. In the 113th Congress, hearings have
been held and several bills to prohibit or limit EPA GHG standards have
been introduced. The proposed standards have stirred new interest in
Date of Report: September 30, 2013
Number of Pages: 20 Order Number: R43127
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