EPA Publishes New Power Plant Emissions Rule
The United States Environmental Protection Agency (EPA) published proposed New Source Performance Standards (NSPS) for regulating carbon dioxide emissions from new fossil fuel-fired power plants in the Federal register on January 8, 2013. The 60-day public comment period for this proposed rule closes on March 10, 2014 and there is a public hearing scheduled for January 28, 2014 in Washington, D.C. There will undoubtedly be a huge number of comments from both industry and the environmental community. Industry groups contend that this rule is a death penalty for coal-fired power generation, while environmentalists tout this as a necessary step to address climate change. The first set of proposed carbon emission issued by the Agency in 2012 resulted in over 2.5 million comments and was ultimately withdrawn by the Agency.
The key aspect of this proposed rule, which applies only to new facilities, is that it will establish carbon capture and storage (CCS) as the Best System of Emission Reduction (BSER) for new coal fired power plants. Based on CCS technology, the rule would limit emissions from new coal-fired power plants to 1,100 pounds of carbon dioxide per megawatt-hour. Large natural gas-fired power plants would be limited to 1,000 pounds of carbon per megawatt-hour with small natural gas fired plants limited to 1,100 pounds of carbon dioxide per megawatt hour.
This aspect of the rule has caused a great deal of controversy and is likely to be the focus of comments submitted by utilities, mining companies and coal and natural gas companies. Opponents have focused their critique of these requirements on the technological feasibility of CCS, a very new and largely untested technology. Most industry groups agree that this technology has not been “adequately demonstrated” as required by the Clean Air Act. Numerous lawmakers highlighted these concerns during congressional hearings in the fall.
Initial comments published by the National Mining Association highlight these concerns, stating that the proposed standard for both coal and natural gas fired plants is an arbitrary and capricious use of Clean Air Act Section 111(b). According to the NMA and many industry groups, EPA cannot support its assertions that carbon capture and storage has been “Adequately Demonstrated” as a matter of law. BSER determinations must be achievable using technology that has been adequately demonstrated and is available at a reasonable cost. Historically, this essentially meant that there were facilities operating successfully using a given technology. The NMA and many other groups argue that there is simply no regulatory history or relevant case law that meets this threshold and supports EPA’s proposed rule. Furthermore, they argue that there is no substantive difference between this proposed rule and the rule that EPA was forced to withdraw in 2012. It will be interesting to see how the Agency responds to such arguments at the conclusion of the public comment period in March.