This post was written by AHC attorney Roland Hall.
The EPA will soon propose a final rule imposing limits on carbon dioxide emissions from new power plants, including coal-fired plants. Although the EPA’s proposal has not yet been made public, sources familiar with the draft proposal have indicated the limits will be so stringent as to effectively ban new coal plants. Newly constructed coal plants would only be able to comply with the limits by scrubbing carbon dioxide from emissions and permanently storing it underground. The technology for underground storage has so far only been used on a trial basis, and experts indicate that even if such technology could be implemented, use would be so costly as to make coal plant development uneconomic. The EPA will almost certainly face legal challenge if it finalizes a rule that requires carbon capture technology for compliance, as the utility and manufacturing industries will argue that the technology is not a demonstrated technology in commercial use for coal plants.
Those in favor of more stringent emissions requirements argue that utilities constructing new plants have already shifted from coal-fired plants to plants burning natural gas, and that that the rule, if finalized, would have little economic effect on utilities or their consumers. However, those in the industry see the EPA’s push for more stringent emissions on new construction as the testing ground for the EPA’s ultimate goal – imposing more stringent emissions requirements on existing power plants. Also, as the increasing construction of natural gas fired power plants places pressure on natural gas prices, coal could once again become competitive, unless forestalled by emissions rules making construction effectively impossible. If the emissions rule survives legal attack, it would advance the Obama administration’s climate change agenda, which hit a roadblock during President Obama’s first term when “cap and trade” legislation that would have passed legislative limits on carbon emissions stalled in the Senate.