About all anyone outside the US Environmental Protection Agency knows about proposed rules due soon that might restructure power generation in America is that they’ll arrive on time.
Or nearly so. A year ago, President Barack Obama directed EPA to propose limits on emissions of carbon dioxide from existing power-generating plants by June 1.
Because that’s a Sunday, EPA Administrator Gina McCarthy says her agency will unveil the proposal on June 2.
Other than timing, the proposal remains a mystery.
McCarthy has said regulations for existing power plants will be more flexible than those proposed in January for new facilities. For the coal industry, that’s hardly consoling.
The January proposal sets carbon-emission limits for new power plants fueled by natural gas and coal. It also requires new coal-fired plants to use carbon capture and sequestration (CCS), a technology not in use by any commercial-scale power plant in the US.
In comments filed this month responding to the January proposal, the American Coal Council cited an Energy Information Administration estimate that the capital cost of a new integrated combined-cycle coal plant with CCS would be $6,599/kw.
That’s more than capital requirements for new hydro, onshore solar, wind, and nuclear plants and more than six times the capital cost of a new gas-fired combined-cycle generating plant without CCS, according to ACC.
Even before EPA’s January proposal, low gas prices were discouraging construction of coal-fired capacity. The proposal essentially makes coal-plant construction unlikely regardless of the gas price.
It also gives the coal business reason to expect rugged treatment of existing plants.
The January proposal affects growth. The June proposal will affect cost. If those costs are high, as they probably will be, a recent trend of coal-fired plant closures will accelerate.
Yes, gas-fired capacity will make up much of the loss. But the oil and gas business should welcome none of this.
EPA won’t stop with coal. It gets its energy cues from environmental activists phobic about carbon and never easily pleased.
(From the subscription area of www.ogj.com; author’s e-mail: [email protected])
Bob Tippee | Editor
Bob Tippee has been chief editor of Oil & Gas Journal since January 1999 and a member of the Journal staff since October 1977. Before joining the magazine, he worked as a reporter at the Tulsa World and served for four years as an officer in the US Air Force. A native of St. Louis, he holds a degree in journalism from the University of Tulsa.