The US ‘War on Coal’ Heats Up

BRISBANE, Australia - July 25, 2013 - PRLog -- US President Barack Obama has ordered the Environmental Protection Agency to establish carbon emission standards for both new and existing US power plants.

While it had been tipped, the inclusion of existing plants in the guideline was the most important – perhaps ominous – development.

The degree to which present and future coal generation is affected is unclear. Had the carbon rules been proposed in a vacuum, the result would have been cataclysmic for coal.

But prior rules designed to control emissions of other pollutants have already cut deeply into domestic US coal burn.

In a high-profile speech at Georgetown University on June 25, the President ordered the EPA to issue a new proposal for new plants by September 30 this year. A proposal for existing plants must be made by June 1, 2014 and final standards put in place by June 1, 2015.

The directive for new plants comes in light of the EPA’s prior decision to replace an April proposal that attracted more than 2m public comments.

The new date allows the regulator to make adjustments in light of those comments and, according to the President, “ongoing developments in the industry.”

The directive only indicates that a rule be put in place “in a timely fashion.”

The timeline for existing plants is spelled out, but the eventual set of rules is no less uncertain. To dredge up a cliché, the devil will be in the details.

The President did direct that the proposal for existing plants include state implementation plans due no later than June 30, 2016. The states would propose to the federal government plans for meeting EPA guidelines. The states’ proposals then must be approved on an individual basis.

The President said the states “will play a central role in establishing and implementing standards for existing power plants,” and directed that “leaders in the power sector, labour leaders, nongovernmental organisations, other experts, tribal officials, other stakeholders and members of the public” be engaged in “informing the design of the program.”

Beyond that, Obama wants the EPA to develop approaches that allow the use of market-based instruments, performance standards and other regulatory flexibilities; to ensure that the standards enable continued reliance on a range of energy sources and technologies; and to develop standards that can be implemented “in a manner consistent with the continued provision of reliable and affordable electric power for consumers and businesses.”

Finally, the President directed the EPA to work with the Department of Energy and other federal and state agencies “to promote the reliable and affordable provision of electric power through the continued development and deployment of cleaner technologies and by increasing energy efficiency, including through stronger appliance efficiency standards and other measures.”

The bottom line will be increased costs to generate electricity with coal and to a lesser extent with natural gas. The President also proposed further subsidies for renewable energy.

Grid reliability and overall electricity demand might well limit the amount of further damage to coal burn. Consumers simply will pay more money for their electricity.

Peabody Energy, the world’s largest private sector coal producer, offered a measured response to the President’s directive. For the most part, it chose to concentrate on parts of the President’s plan that are friendlier to coal, including continued development of clean coal technologies.

Peabody said it “agrees with President Obama that greater use of clean coal is essential. We also support his proposals to increase deployment of higher-efficiency generation; expand research in carbon capture, use and storage technologies; and advance coal generation in poor nations.” The company added: “We would go further and say that all nations need the clean, reliable, low-cost electricity that coal-fueled generation provides.”

Peabody noted that such elements are a part of its own plan “to achieve universal energy access by 2050 in a way that puts people first and advances society’s important goals of energy security, economic growth and environmental solutions.”

A caveat: “At the same time, any actions that would reduce coalfueled generation harm Americans, who would feel the same pain at the plug that we all feel at the pump,” Peabody said. “The best economies in the world continue to turn to coal.

“Nations such as China and India are increasing coal use as hundreds of millions of people experience the dual benefits of electrification and urbanisation. The US is seeing a sharp rise in coalfueled generation in 2013 as the most economic choice, with natural gas prices doubling from 2012 lows.”

Other US coal interests were less kind to the President. The West Virginia Coal Association, for one, noted that “President Obama called America’s reliance on coal a ‘mistake’ dismissing the accomplishments of generations of coal miners...”

The coal advocacy group also lamented: “By announcing imminent restrictions on carbon emissions from power plants that exceed the capabilities of current technology, this administration will impose bureaucratic mandates with no regard for the people and communities of West Virginia that depend on coal and the inexpensive energy it creates for their very existence and survival.”

Others object to the President’s decision to bypass the legislative process by promulgating rules through the executive process.

Seven US governors have written individually to the President and his administration, calling on him to block, not promote, rulemaking “that would effectively shutter coal-fired power generation plants and prevent construction of new ones.”

President Obama was no less adamant.

“Today, about 40% of America’s carbon pollution comes from our power plants,” he told the Georgetown audience. “But here’s the thing: Right now, there are no federal limits to the amount of carbon pollution that those plants can pump into our air. None. Zero.

“We limit the amount of toxic chemicals like mercury and sulphur and arsenic in our air or our water, but power plants can still dump unlimited amounts of carbon pollution into the air for free. That’s not right, that’s not safe, and it needs to stop.”

Certainly the President pleased his environmental constituency.

Coal proponents have joined, and the war will be fought in the court of opinion, through the judiciary and potentially through legislative machinations. Its result is yet to be determined.

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