So then why isn’t the administration applying that same “orderly” logic to its “energy policy?” That’s the question the NMA and coal-using utilities have been asking. The serpent’s nest of new air regulations that the EPA is hatching for coal-based power plants will destroy a significant chunk of current capacity over the next several years. Reputable analysts have forecast up to 20% or more of the existing fleet could be retired thanks to a slew of concurrent EPA rules aimed at controlling mercury, air toxics, nitrogen oxide, sulfur dioxide, heavy metals, particulate matter and greenhouse gases.
True, the greenhouse gas rules announced this spring are aimed only at future plants for now. But many believe—and the EPA hasn’t denied—that sooner rather than later similar controls will be applied to existing plants. Environmental lawyers may “force” the EPA to do this in court. And anyway, compliance with the Cross State Air Pollution Rule and the new utility technology rule will also impact the coal fleet by forcing modifications to boilers and combustion processes—modifications that may also trigger further costly controls on existing plants.
Apparently we should worry. We have earnest assurances from senior EPA officials that they’re not out to destroy coal-based generation. They’re not crucifying them either. No, really. Were it not for these assurances, a person might reasonably conclude that the real purpose here is wholesale coal capacity destruction, and that what we’re actually seeing is a plan to euthanize old coal plants.
If this is not the intention, it may be the result. About 33 gw of coal-based capacity has already been slated for retirement. “At the peak of 2007 and 2008, we were taking about 80 million tons of coal a year,” said AEP CEO and Chairman Nick Akins in a recent interview. “Today, that’s probably down to the order of 55 million tons of coal a year.” The Energy Information Administration confirms scattered evidence that coal’s share of the market, now around 42%, is falling and may fall lower before finding the bottom.
Obviously cheap and abundant gas is a tempting alternative to coal today. Maybe it will be next year, too. But gas being historically a volatile source of electricity generation, Akins and other utility executives are pleading with the administration not to put all our eggs into the gas basket. A decade ago they saw gas prices quadruple within a few years when federal incentives favored gas capacity but not gas production. Just five years ago most deep thinkers wanted LNG terminals to bring gas into the country; they now want those same terminals to export the stuff. And not long ago the environmental community stood with gas industry executives praising their carbon-light fuel as a “bridge to the future” of “green” energy. The same people have now launched a “beyond gas” campaign to regulate hydraulic fracturing and stop gas exports.
Another, more basic objection to the EPA’s “beyond coal” approach came first from the NMA and now comes from Congress—i.e. the agency is failing to present the public with transparent and plausible alternatives. The government has not totaled up the cumulative impact its regulations would have on coal combustion, let alone on the electricity grid and the economy it supports. Instead, the EPA has used a balkanized, rule-by-rule approach specifically to avoid such a look—and the ugly reality we would see. The little costs the EPA reluctantly acknowledges look even smaller next to the bloated benefits it claims but can’t substantiate.
This is not the makings of an orderly, thoughtful transition. An orderly transition from a fossil fuel economy to a carbon light economy would look much different. For one thing, it would cautiously move us away from energy we have in abundance to sources we cannot scale up for decades. It should acknowledge the risks of destroying valuable capacity with unsupportable standards and unrealistic compliance deadlines. It could require compliance standards for coal that actually reflect technology for coal and not for an entirely different energy source.
Shoulda, coulda, woulda. Doesn’t.
Popovich is a spokesperson for the National Mining Association, the industry’s trade group based in Washington, D.C.