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Friday, October 11, 2013

EPA Standards for Greenhouse Gas Emissions from Power Plants: Many Questions, Some Answers

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 rule.

The re-proposed standards were released September 20. They would set an emissions limit of 1,100 pounds of carbon dioxide (CO
2) 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 agency.

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 113
th 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 congressional action.

Date of Report: September 30, 2013
Number of Pages: 20
Order Number: R43127
Price: $29.95

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