Feb 10, 2014 - 2:00pm

3 Misconceptions Regarding EPA Regulation of Greenhouse Gases


Senior Director, Policy, U.S. Chamber Global Energy Institute

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EPA headquarters in Washington, D.C.

The EPA has proposed a new carbon emissions regulation for new power plants and is accepting comments until March 10, 2014. The rule is just the first of what is expected to be a series of new greenhouse gas regulations pursued by EPA in the coming years. As EPA embarks on this massive regulatory agenda, it is important to be aware of several misconceptions that confuse the debate on this critical energy and environmental policy issue.  Below are just three of those misconceptions.

Misconception #1: EPA’s agenda is focused only on coal.

Reality: While coal-fired power plants are EPA’s current focus, the agency has asserted that it has the authority and the legal obligation to regulate GHG emissions from dozens of other industrial sources, and ultimately from more than six million buildings and small facilities that exceed the CAA’s statutory emissions thresholds. This agenda is just underway and will ultimately extend to nearly every sector of the industrial economy, from refining to manufacturing to agriculture and mining. The agency has also indicated that it intends to proceed with these rules “as quickly as possible.” 

Make no mistake, this agenda threatens to be economically devastating.

In December, more than75 state and local chambers of commerce filed an amicus brief with the Supreme Court detailing business community concerns with EPA’s GHG agenda.  The filing notes that increased energy costs resulting from regulations on power plants are “a direct and significant impact placed on all sectors of the American economy” and that “every source of GHG, no matter how inconsequential its emissions may be, is within EPA’s regulatory reach and grasp.”

Misconception #2: EPA’s rulemaking provides a clear path forward for coal as part of an all-of-the-above energy policy.

Reality: The Clean Air Act provides very clear direction to EPA with respect to technological mandates, stating that regulatory performance standards should be based on what is achievable by the “best system of emission reduction” that has been “adequately demonstrated.” The EPA is mandating carbon capture sequestration (CCS), but as an integrated technology, CCS has never been demonstrated on a commercial power plant, and is nowhere near ready for broad deployment. This fact has been argued by the federal government itself—in comments to the White House Office of Management Budget and by the former head of the Department of Energy’s Office of Fossil Energy, the executive agency responsible for advancing the technology to commercialization.

The Carbon Capture and Sequestration Technologies Program at the Massachusetts Institute of Technology maintains of the 55 CCS power projects it has tracked, none are operational, and only two have entered the construction phase. Similarly, the Global CCS Institute database, which tracks of CCS projects worldwide shows that there are no active projects—not one—anywhere in the world that combine pre- or post-combustion carbon capture on a power generation plant with dedicated geologic sequestration.

Accordingly, EPA’s designation of CCS as the best system for compliance under this rule amounts to a de facto ban on the construction of new coal-fired power plants.

Misconception #3: The benefits of EPA’s rule exceed its costs. The EPA itself acknowledges that the proposed rule has “negligible” benefits, and its assertion that there are no costs rests on the assumption that coal-fired power plants will not be built even in the absence of the rule. If this projection proves to be wrong—which history tells us is certainly plausible—then the rule’s cost would skyrocket because it would prevent the construction of otherwise economical new coal-fired power plants.

In addition to the direct electricity affordability costs of such a situation, over time the increasing lack of baseload electricity diversity would threaten reliability and unnecessarily limit risk management tools available to power generators.  As seen during recent winter cold snaps, coal plants slated for closure (at least in part due to EPA regulation) have been absolutely essential in meeting soaring demand. Forcing out a specific fuel source from the electricity generating mix, which is what EPA’s proposal amounts to, would reduce the reliability of the electricity supply and carry with it real costs–both economic and societal.

Ultimately, EPA has an obligation to ensure that the technical and legal foundations of this rulemaking—and the process through which they are arrived at—are robust, transparent, fair, and set out in a reasonable timeframe.

 

 

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About the Author

About the Author

Senior Director, Policy, U.S. Chamber Global Energy Institute

Dan Byers is senior director for policy at the U.S. Chamber of Commerce’s Global Energy Institute.