Will the EPA’s New Carbon Regulations Kill Coal?

10/2/13
 
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from Mother Jones,
9/20/13:

On Friday, the EPA introduced carbon standards that could prevent new coal-fired plants from being built. But has natural gas already won the “war on coal”?

On Friday morning the Environmental Protection Agency released its standards for carbon emissions for new power plants, the first major milestone in President Obama’s second-term plan to fight climate change. Detractors are already describing the regulations as a job-killing “salvo” in the supposed “war on coal.” The new rules, which are the first to limit greenhouse gas emissions from power plants, could effectively stop new coal-fired plants from being built.

The standards will limit the number of pounds of carbon that can be released per unit of electricity produced, restricting gas plants bigger than 850 megawatts to 1,000 pounds per megawatt hour, and coal-fired units and gas turbines smaller than 850 megawatts to 1,100 pounds. The average new gas plant already meets these standards, but advanced new coal plants produce more than 1,600 pounds per megawatt hour, so to meet the new benchmark, they’d have to substantially cut their carbon emissions (a comparable natural gas plant clocks about 790). To do this, they’d have to use a process called “carbon capture and storage” (CCS) in which carbon is separated from emissions. And according to experts, there’s still a long way to go before that’s economically viable.

EPA chief Gina McCarthy says she doesn’t see coal dying out, and at a hearing of the House Energy and Commerce Committee on Wednesday, she defended the yet-to-be-released rules. “On the basis of the information that we see and what is out in the market today and what is being contemplated today, that CCS technology is feasible,” she said. “We believe coal will continue to represent a significant portion of the energy supply in the decades to come.”

But the skeptics aren’t buying it. “We know that CCS costs billions of dollars,” said Republican John Shimkus of Illinois at the hearing. “For these rules to be promulgated, we know we aren’t going to have any new coal-fired power plants because of the costs of CCS.” The American Coalition for Clean Coal Electricity, an industry group, argues that the regulations will actually hinder carbon capture technology. “The federal government should first focus on ensuring the coal industry can economically build second-generation plants rather than put a halt to the innovative progress made to date,” said spokeswoman Laura Sheehan in a statement. “If the EPA acts as expected, the United States, which is the current global leader of carbon capture and storage…technology, will cede its ground and fall to the back of the innovation race.”

Coal is already falling behind though, and fast. “Even without CCS, the cost of a coal plant is more expensive than building a natural gas plant, given the low price of gas,” says Howard Herzog, a senior research engineer at the MIT Energy Initiative. “People who have access to gas, they’re going to build gas. This will make the economics even worse.” For coal to compete with natural gas, Herzog says, the price of gas would have to have top $10 per million BTU—roughly three times the current price.

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