EPA: Best Coal Emission Reduction System? Be Natural Gas!

Grim Reaper visits coal

On Wednesday, I wrote about how EPA had released their new performance standards for coal-fired power plants that in essence will lead to the death of the coal industry. EPA is regulating greenhouse gas emissions (GHGs), even without any statute approved by Congress that grants them the authority to do so. Instead, they just seized the authority under the Clean Air Act (CAA) of 1972 (ya know, back when people were scared about global cooling). My colleague Marlo Lewis adds several points to the full extent of EPA’s lawlessness.

First, under the CAA, performance standards must reflect the “best system of reduction.” But EPA defines the “best system of reduction” for coal-fired plants as a natural gas plant. In other words, as Marlo puts it, “EPA is proposing that new coal power plants be new natural gas plants. EPA is saying with a straight face that natural gas combined cycle is an emission reduction system that has been adequately demonstrated for coal power plants.” I’m sorry, but what!? I really hope this justification can’t hold up in court, but you can’t ever tell since courts are so deferential to the executive. In any case, EPA’s clearly playing the long-game: harass the coal industry until the energy industry stops bothering with it, and just takes the easy road, which is natural gas.

Second, EPA argues that there will be absolutely no costs to this rule, since current plants will not have to meet the standards, and they project that no new coal plants will be built between now and 2020 anyway. But they base this projection on currently low natural gas prices, ignoring the historic volatility in gas prices. Of course, this also means that since the rule apparently applies to no plants at all, it will have no benefits either! It won’t even reduce projected CO2 emissions.

So what motivated EPA’s rulemaking? Obviously just to put the regulatory structure in place, again for the long-game. “Once the framework is in place,” writes Marlo, “EPA will be able to impose costs down the line. Coal is already losing market share to natural gas even without having to meet CO2 performance standards. The proposed rule positions EPA to put coal power plants in an ever-tightening regulatory noose.”

Read Marlo’s whole piece here