With the stroke of a pen the U.S. Environmental Protection Agency has effectively banned the construction of any new coal-fired power plants in the United States for the foreseeable future, shifting the advantage to natural gas and other lower carbon dioxide emitting forms of electrical generation.

These pollution standards inked by the federal environmental agency for new power plants mark the first-ever carbon dioxide emission limits proposed under the Clean Air Act.

"The proposed requirements, which are strictly limited to new sources, would require new fossil fuel-fired EGUs (electric generating units) greater than 25 megawatt electric to meet an output-based standard of 1,000 pounds of carbon dioxide per megawatt-hour, based on the performance of widely used natural gas combined cycle technology," according to the proposed ruling signed by EPA Administrator Lisa Jackson on March 27.

While easily accommodating the estimated 800 pounds of carbon dioxide per megawatt-hour pluming from the stacks of modern gas-fired power plants, the proposed limits are some 40 percent lower than the 1,600 pounds of carbon dioxide per megawatt-hour exhaled by modern coal-fueled electrical facilities.

EPA's proposal closely mimics a plan drafted in 2011 by Environment Canada, its counterpart to the north.

Targeting coal-fired power plants in Canada, Environment Canada's limits are even more stringent than those proposed by the EPA. The Canadian agency has set the emissions cap at 375 metric tons of carbon dioxide per gigawatt-hour, or about 825 pounds per megawatt-hour. The proposed rules are anticipated to go into effect in 2015.

"The Government of Canada is making progress towards our ambitious target of reducing our greenhouse gas emissions 17 percent from 2005 levels by 2020 through a sector-by-sector approach aligned with the U.S.," Environment Canada wrote when announcing the proposed limits in August.

Both the U.S. and Canadian measures have drawn criticism from coal antagonists and advocates alike.

Environmental groups contend that the proposals do not go far enough in reducing what is perceived as a dangerous ingredient of global warming.

"These regulations do very little to cut emissions, and keep coal powering electricity for the next 45 years," John Bennett, executive director of Sierra Club Canada, said of the Canadian proposal.

The power generation and mining industries, on the other hand, argue that the regulations will drive up costs of power generation and threaten the livelihoods of many working in the coal industry.

"Requiring coal-based power plants to meet an emissions standard based on natural gas technology is a policy overtly calculated to destroy a significant portion of America's electricity supply," said U.S. National Mining Association President and CEO Hal Quinn. "Volatile natural gas prices will once again expose millions of households to higher utility bills, threaten hundreds of thousands of workers with unemployment and weaken both the competitiveness of basic industries and the reliability of the nation's electricity grid."

Abandoning coal

Fearing the effects the carbon rules would have on domestic coal miners, advocates for the mining industry were quick to respond to the proposed carbon emission standard.

"It is not an 'all of the above' energy strategy; it does not create jobs; and it does not make it easier for Americans to pay their mortgages. Instead, the proposed New Source Performance Standards would deliberately push America to abandon coal, its most abundant and reliable energy source in favor of costlier fuels-even though Congress has repeatedly rejected this policy," Quinn said.

The EPA argues that the new standards don't apply to existing power plants and the agency does not foresee any new coal-fired facilities being built in the next 15-20 years - with or without the new carbon dioxide limits.

"Because of the economics of the energy sector, the EPA and others project that (natural gas combined cycle) will be the predominant choice for new fossil fuel-fired generation even absent this rule. In its base case analysis, the EPA does not project any new coal-fired EGUs (electrical generating units) without CCS (carbon capture and storage) to be built in the absence of this proposal through 2030," EPA wrote in the proposed standard.

The federal agency estimates that future coal-fired power facilities would need to capture and store about half the carbon dioxide emissions to meet the new requirements laid out in its proposal. To date, carbon capture and storage has been inhibited by its high costs.

Addressing these high costs, the EPA wrote, "At present, while CCS would add considerably to the costs of a new coal-fired power plant, there are sources of funding available to support the deployment of CCS, including a limited number of government demonstration programs."

"We expect that the costs of CCS will decline in the future as CCS matures and is utilized more widely," the agency added.

Skinning the carbon cat

The economics of carbon capture and storage was expected to get a boost from cap-and-trade regulations proposed in both the United States and Canada.

Cap-and-trade is a strategy to limit carbon dioxide emissions by allotting a set number of "credits" for releases of the gas. The federal government would give or sell these "carbon credits" to companies whose activities emit the gas. Carbon emitters that exceeded their limit would need to buy credits from firms with excess. This tactic is meant to put a price on releasing carbon dioxide into the atmosphere.

Getting cap-and-trade legislation passed on Capitol Hill was a goal of President Barak Obama when he entered office in 2008 and Canada Prime Minister Stephen Harper made it clear that he planned to advance Canadian climate change policies in lockstep with its southern neighbor.

When Republicans gained control of the House of Representatives and gained seats in the Senate during the mid-term elections, Obama realized the political landscape did not favor the passing of the carbon trading strategy.

"Cap-and-trade was just one way of skinning the cat," Obama said at a White House news conference on Nov. 3, 2010, the day after the mid-term elections. "It was a means, not an end. I'm going to be looking for other means to address this problem."

Quinn and others see the EPA's carbon emission limits as the Obama Administration's alternative method of skinning the cat.

"EPA's proposal for controlling greenhouse gas emissions from about half the nation's electric power supply is a poorly disguised cap-and-tax scheme that represents energy and economic policy at its worst. Higher utility bills and fewer jobs are the only certain outcomes from this reckless attempt to override Congress's repeated refusal to enact punitive caps on carbon dioxide emissions," Quinn said.

The U.S. and Canadian environmental agencies see their proposals as a common sense approach to lowering carbon emissions from North American electricity sector.

"Right now there are no limits to the amount of carbon pollution that future power plants will be able to put into our skies - and the health and economic threats of a changing climate continue to grow," the EPA's Jackson said. "We're putting in place a standard that relies on the use of clean, American made technology to tackle a challenge that we can't leave to our kids and grandkids."

"Our strategy to lower our emissions is based on making improvements sector by sector to sustain our economy and protect our environment," said Environment Canada Minister Kent. "We are taking action in the electricity sector because we recognize the potential for significant emissions reductions. We are committed to build on our strength in the electricity sector and to lead the world in clean electricity generation."

Author Bio

Shane Lasley, Publisher

Over his more than 16 years of covering mining and mineral exploration, Shane has become renowned for his ability to report on the sector in a way that is technically sound enough to inform industry insiders while being easy to understand by a wider audience.

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