Coal rules will devastate, say biz groups

The Environmental Protection Agency’s carbon dioxide limits for new power plants will devastate the economy by leading to a steep surge in energy prices, the coal industry and its allies warned.

In comments to the EPA that were due on Friday, the American Coal Council said the new standards would essentially take coal off the market as a power source for new plants.

“Implementation of the rule will reduce American energy diversity and security, stop the development of cleaner coal technologies, and increase the risk of higher electricity prices to consumers and businesses,” the group said.

Separately, the Chamber of Commerce said the rules would have an effect well beyond the coal industry by leading to job losses in the broader economy.

“EPA should recognize that, beginning with this rulemaking, its greenhouse gas regulatory agenda will reverberate throughout the economy,” the Chamber wrote to EPA.

“The broader business community is increasingly concerned about the potentially enormous harm from these rules. EPA should work cooperatively to ensure all of its [greenhouse gas] regulations are cost-effective, attainable, and avoid harm to American jobs and the economy,” it said.

The new rules, which the EPA plans to put into effect in January 2015, are a key part of President Obama’s climate change initiative and are intended to reduce global warming.

The White House hopes the rules will highlight Obama’s effort to enact change through regulatory and executive actions as the administration struggles to move anything through Congress.

Green groups hailed their introduction in comments filed with the EPA, saying they would provide vital new protections against pollution.

“Coal plants are the source of an enormous proportion of the climate pollution facing our nation, and as we continue the transition to clean energy solutions, it's vital that our communities are protected from that pollution,” the Sierra Club said in a petition  signed by more than 100,000 individuals. “The proposed standards for coal plants are an important and necessary step.”

The standards are the first of two aimed at carbon dioxide emissions from power plants. A proposal for limits on existing plants will be announced in June, EPA said.

The rule would limit coal power plants to emitting 1,100 lbs. of carbon dioxide per megawatt-hour produced. Natural gas plants would be limited to 1,000 lbs. or 1,100 lbs. per megawatt-hour, depending on the size of the generation unit.

EPA based its coal standard on the emission achievable using carbon capture and sequestration (CCS), a nascent technology that energy companies said is not ready for primetime.

“These new standards effectively take coal off the table as an option for new generation resources,” the American Coal Council said.

The United States depends on coal for 40 percent of its electric generation, ACC said. The industry provides 800,000 jobs, which is said would be in danger under the EPA’s rule.

The American Council for Clean Coal Electricity said EPA’s proposal would effectively ban new coal generation, since it will require a technology that is not widely available.

“Banning new coal-fueled power plants is bad energy policy for our nation because it will result in an overreliance on natural gas for new base load generation — a fuel that has a long history of price volatility and deliverability challenges,” ACCCE wrote in its comments.

ACCCE said the rule, also known as New Source Performance Standards (NSPS), would actually discourage CCS development, because companies would no longer have an incentive to build new plants. The group asked that EPA withdraw its proposal and write a new one based on emissions from new plants that do not use CCS.

The National Mining Association (NMA) urged EPA to rescind the proposal, for fear that it would reduce diversity in power supplies.

“EPA’s approach risks overreliance on one power source and jeopardizes the reliability that is inherent in having a diverse energy portfolio,” the NMA said. “NMA cautions EPA to proceed with great care in this rulemaking as it is merely step one of the agency’s plans for regulating the power sector under the [Clean Air Act] to reduce CO2 emissions.”

The Electricity Reliability Coordinating Council said the new rule could be a way to eliminate coal electricity, which would make power less reliable.

“The proposed rule is an example of regulation at its worst in that it attempts to direct market forces with only the vague hope of being able to deliver real benefits,” ERCC said. “Unfortunately, the costs of the proposed rule are very real in terms of limiting future electricity generation options, with consequent potential threats to electric reliability, affordability, and all of the economic and health harms that are associated with those results.”

Green groups sponsored mass mailing campaigns, in which thousands of individuals sent the same message to EPA. Besides the Sierra Club, the National Wildlife Federation and the Natural Resources Defense Council initiated their own mass campaigns supporting the rule.