George Orwell famously asked: “Where’s the omelet?”
Last month, a similar “where’s the benefit” question could be put to the administration and its legions of green activists who championed the Environmental Protection Agency (EPA) for proposing regulations that will quash construction of new coal plants. The New Source Performance Standards, or NSPS, require a technology standard only possible with carbon capture and control technology. That technology hasn’t been demonstrated at the scale needed for power plants.
Right, said the EPA, which now turns its regulatory attentions to greenhouse gas emissions from existing coal-powered plants.
The damage to the broader economy from ruling out new generation from the fuel that provides most of our electricity can’t be easily measured. Calculate how higher electricity prices feeding through households and industries will curb economic growth, household disposable income, industrial competitiveness and job creation and there’s the answer. But this much is certain: there will be blood — lots of it. Especially if the EPA expands its coal-free energy policy by hastening the destruction of existing capacity with a rule expected next summer.
This is how the administration plans to make a green omelet today. Just to erase any doubts about its intentions, during the same week the EPA unveiled its climate change plans for power plants, the White House urged the Senate to confirm a candidate for senior utility regulator who recently said natural gas is a “dead end” here. With coal now and gas soon removed from the energy table, and nuclear power wilting under high costs and bad press, the administration sees a path to achieving a green economy that will be the envy of Burkina Faso.
EPA doesn’t do economics. The agency that complains that carbon is freely dumped into the atmosphere routinely dumps regulation freely onto the economy. When the EPA estimated the costs of eliminating coal, the source of 40% of the nation’s electricity, it had a difficult time finding any. Reasoning that new coal plants wouldn’t be built anyway, it put the cost of no new construction at zero. If that seems too clever by half, it’s because of the circular logic here: no costs are associated with eliminating coal in the future since no new plants will be built thanks largely to EPA regulations that discourage any investment in new coal plants.
Similarly bewildering is the EPA’s explanation for mandating carbon capture and storage as the NSPS for new coal. The law requires new standards to be based on adequately demonstrated technology. The EPA claims it met that test because construction of the Kemper plant in Mississippi — a plant that someday, at some cost, will partially capture CO2 — is 65% complete. At the EPA, the word “demonstration” doesn’t mean “demonstrate” the effectiveness of the technology, it means “demonstrate” construction of the technology.
Since nothing short of carbon capture and storage meets the new plant standard, no intermediate technologies are acceptable. Perfection becomes the enemy of the good, the “good” in this case being demonstrated technologies that could continue the steady reduction of carbon emissions.
Now, even when natural gas prices inevitably climb from tougher rules, export markets and well depletion, coal will be unable to compete and keep utility costs down. Trusting this gang with the economy is like trusting a cat with a bird.
But let’s assume skeptics like the National Mining Association are right and that energy costs will rise from what NMA CEO Hal Quinn called a “reckless gamble with the nation’s economy.” In other words, let’s assume American consumers will share the bitter lesson that Australian, Canadian, British and German consumers have learned from their countries’ costly plans to reduce coal generation. What are the compensating benefits?
Well, there aren’t any. At least that’s what EPA Administrator Gina McCarthy candidly admitted. The rule will reduce greenhouse gas emissions from U.S. power plants by a staggering 1.4%. That’s the green payoff from higher utility bills and job losses. It’s as if your doctor prescribed amputation to cure your cold.
If the administration hopes to cross the chasm that separates fossil energy from renewable energy safely, it won’t do it by destroying the most reliable bridge to get us there.
Luke Popovich is a spokesperson for the National Mining Association, the industry’s trade group based in Washington, D.C.