Despite promising at a hearing earlier this week that “coal will continue to represent a significant portion of energy supply for decades to come,” EPA Administrator Gina McCarthy announced today regulations governing new coal power plants. The new set of rules, which calls for new emissions standards on coal and natural gas plants, creates a de facto mandate on the use of carbon capture and sequestration (CCS), an expensive process which will hamper the construction of many plants. A former EPA official calls it “effectively a ban on new coal-fired power plants.”
Because even the most efficient plants cannot meet these standards, and the only technology available to achieve them is CCS, most new plants wouldn’t make the cut. Only one plant currently being built is compliant with the new standards--Kemper County Energy Facility in Mississippi—but it will remain profitable only after its owners receive “hundreds of millions of dollars in federal grants and tax credits to offset the cost.” The EPA plans to have a new set of regulations out by 2015 which will extend these standards onto existing plants.
Administrator McCarthy and Secretary Moniz frequently mentioned their support for CCS at Wednesday’s hearing, so this push should come as a surprise. One might suppose that McCarthy did make good on her promise to “provide certainty for new coal," but only insofar as she provided certainty that there won’t be any new coal.
The EPA, whose opponents are generally labeled as ignoring the vast consensus of scientists, appear to be ignoring the vast consensus of industry experts. In spite of myriad complaints decrying the new standards as job killers and price hikers, the EPA blithely indicates that it does “not anticipate this rule will have any impacts on the price of electricity, employment or labor markets or the U.S. economy[.]"
The move most likely represents a push towards natural gas, as most new natural gas plants would be compliant with the new standards without implementing costly new technology. This also meshes with McCarthy's statement Wednesday, in which she deemed fracking “wonderful” for air quality. A push towards natural gas is surprising from the liberal Obama administration, and frackers should not get too complacent, lest they find themselves in the crosshairs after coal is defunct. In any case, this new regulation will most likely trigger higher energy prices and additional pain for the millions of Americans who receive electric bills every month.
Industry representatives were livid with the announcement and Congress responded with bipartisan condemnation. Among Republicans, Senate Minority Leader Mitch McConnell called the move part of a “war on coal” while Kansas Congressman Mike Pompeo, who grilled McCarthy during Wednesday’s hearing, bemoaned the move as being made on “guesswork and ideology over science and basic common sense.” Pompeo was disturbed by the implication that the EPA may be issuing regulations only for the sake of being a conversation starter. “[J]ust Wednesday, the EPA administrator admitted to me during a hearing that the agency doesn't--and cannot--measure whether any of the regulations it promulgates are effective in combating climate change,” he said.
West Virginia Democrats were also outspoken in their opposition to the new rules, particularly Rep. Nick Rahall, who concurred with McConnell that the EPA is waging war on coal and with Pompeo that the move is ideologically motivated. Senator Joe Manchin declared that the regulations would have “devastating impacts to the coal industry and our economy.” Even Senator Jay Rockefeller conceded that the regulation would be “a daunting challenge”. Luckily for Rockefeller, he is retiring and will not have to face reelection. But the rest of his colleagues will be swimming between the Scylla of losing jobs and money for their constituents, and the Charybdis of liberal Democrat outrage against big energy.