The EPA’s new climate rules and federal emission standards in general will be a shot in the arm to the market for hybrid renewable energy-fossil fuel plants. These types of power facilities, which combine a renewable energy source with an existing fossil-fired or geothermal plant, are already playing an emergent role in our national energy dialogue as we look for innovative ways to strengthen our economy and meet growing energy demands with clean, reliable technologies like concentrated solar power (CSP).

For example, AREVA Solar has paired its CSP technology, Compact Linear Fresnel Reflector (CLFR), with several fossil fuel facilities. In fact, our forerunner company, Ausra developed the first hybrid CSP-fossil fuel plant in Australia in 2008. CSP has grown immensely since then. The industry has reached the point of technological maturity, with over 1 gigawatt of installed capacity in the United States and other countries combined. Global energy leaders – including ABB, Alstom, AREVA, Bechtel and GE have all invested in CSP, bringing the financial and technical strength necessary to advance the industry in the United States.

The demand for CSP continues to grow alongside the regulatory pressure on utilities to reduce emissions in the near term, without a significant capital investment. CSP technologies address both concerns by offering cost-effective and quick-to-market opportunities for utilities to increase the fossil-fuel plant output without added emissions, such as carbon dioxide or mercury.

The ability to pair CSP with fossil fuels has been key to this growth. It has demonstrated the effectiveness of the technology to utility customers and plant operators, particularly in the U.S. Sun Belt. The US Southwest alone is home to a number of coal and gas-fired power plants over 100 megawatts (MW) in size. Solar augmentation of existing coal-fired power plants using CSP technologies like ours offer these facilities a cost-effective strategy to quickly boost energy production with solar, while reducing fuel, emissions and operation and maintenance costs.

For real-world proof, AREVA Solar just announced a booster project with Tucson Electric Power (TEP) that will provide a 5 MW solar addition to TEP’s coal and gas-fired, 400 MW H. Wilson Sundt Generating Station in Tuscon, Arizona. In 2010, Florida Power and Light went online with a 75-megawatt (MW) CSP booster to work with a 1,200 MW combined-cycle power plant near Indiantown, Florida. And looking more globally, AREVA Solar is currently constructing a 44 MW solar augmentation facility at a coal plant in Australia. Other energy companies are also in various stages of developing hybrid projects with solar installations in the United States and internationally.

These projects provide compelling evidence for policymakers and regulators that solar augmentation using CSP technology offers a cost-effective, reliable strategy to quickly boost capacity while meeting sustainability goals and reducing emissions. Utilities that would otherwise be forced to install expensive emission controls, or possibly shut plants down can now add renewable energy booster to help address the intent of EPA standards. These projects can also help utilities meet state renewable portfolio standards.

Additionally, these projects create local construction and operations and maintenance jobs, while sourcing local materials and manufacturing. For companies like ours that are based in the United States, the exporting of technology overseas for these projects is helping improve America’s trade balance and contribute to the U.S. solar industry’s role as a nearly $2 billion net global exporter of products and services. These are critical factors to consider with the ongoing economic challenges facing our country as a whole.

Beyond the recent EPA ruling, our national energy and environmental policies should encourage solar-fossil fuel partnerships. The positive results seen from these hybrid plants are the first step to wider adoption of CSP as a standalone carbon-free energy generator. But to fully achieve these goals, we need to implement consistent, long-term energy policies. Like any other economic sector or industry, the CSP market in the United States needs certainty from policymakers and regulators. Specifically, we need policies, such as a Clean Energy Standard that includes hybrid plants and thermal energy systems, and emphasizes them due to the benefits detailed above. An extension of the successful Section 1603 Treasury Grant Program is another policy tool that provides more market certainty and can help encourage the deployment of more hybrid facilities.

The EPA’s first ever greenhouse gas standards for new power plants have already prompted a backlash from some in industry. But rather than bow to pressure, the agency should work to increase the net benefits of the rules while lowering compliance costs for businesses. They can achieve this by barring old, dirty coal-fired plants from slipping by the rules and by increasing businesses’ flexibility in adhering to the standards.

Leaving existing facilities out of the New Source Performance Standards (NSPS) is bad economics because it distorts the calculations that businesses perform when deciding whether to keep old plants running or to build new ones. Grandfathering old plants creates distorted incentives: why build a new, cleaner plant and subject yourself to new regulations when your old, polluting plant gets away scot-free?

In the long run, not regulating existing plants also sets a precedent of discouraging plant owners from updating their facilities. Even if new, tougher standards are adopted, an expectation of being grandfathered in under the old rules means there’s less benefit to investing in cleaner technology.

These issues provide serious limitations to the current rule’s power to effectively limit greenhouse gas emissions, but there are provisions in the Clean Air Act that authorize the EPA establish regulations for existing sources. And, under the existing source provisions, EPA has broad authority to provide flexible mechanisms to allow businesses to reduce emissions at the lowest possible costs.

There are a host of potential flexibility tools that the agency can use, including banking (allowing firms to cut emissions sooner and “bank” emissions reduction for down the road) and by allowing for generators to work with local power purchases to cut demand, and thereby reduce pollution. The consensus view among legal academics is that the existing source provisions provide substantial leeway for the agency to adopt many of these mechanisms, up to and including a full market-based system.

EPA deserves credit for moving forward with greenhouse gas limitations in a tough political climate, when its every move will be criticized no matter how great the merits. But by expanding limitations to include existing sources, more reductions can be achieved for cheaper over the long run. That won’t silence the hue and cry from impacted industry, but it gives them less substance to complain about.

This post was co-authored by Jonas Monast, director of the Climate and Energy Program at the Nicholas Institute for Environmental Policy Solutions, Duke University.

While many would have preferred a de novo legislative approach to greenhouse gases, the New Source Performance Standards (NSPS) proposal represents the first serious national effort to reduce greenhouse gases (GHG) for the largest emitting sector: utilities. With this rule, the U.S. Environmental Protection Agency (EPA) has the potential to provide a clearer path forward for utilities, creating policy certainty to allow utilities to plan for the future, potentially establishing demand for Carbon Capture and Storage (CCS) technologies, and setting in motion a process for addressing GHG emissions from existing power plants. All of these results of the rule could make constructive progress in our nation’s efforts to deal with the very real challenge of climate change

By the EPA’s own admission, the proposed rule is expected to have little impact on its own. According to the U.S. Energy Information Administration’s business-as-usual scenario in the 2012 Annual Energy Outlook, little to no new coal plants are expected over the next two decades. This was the case before the EPA announced the proposed NSPS rule, and is primarily a result of anticipated sustained low natural gas prices. But long-term prospective modeling can be inaccurate, and this rule provides a backstop confirming that emissions limits will apply to plants even if the fossil fuel markets shift again.

In particular, if utilities, engineering firms, venture capitalists, or government officials doubt the projections of sustained low natural gas prices, this proposed rule could breathe new life into CCS technologies. Continued progress with cost-effective technologies to capture and sequester GHG emissions is critical.

While we do not expect to see new coal plants built in this country in the near future, EIA projections suggest that the nation’s existing coal-fired fleet will continue to provide 39% of the nation’s electricity through 2035. In addition, global coal consumption is expected to increase by 50% between 2008-2035. CCS, therefore, is important and a regulatory signal such as the NSPS proposed rule can help stimulate investment capital. The NSPS rule is not likely to ensure that affordable CCS technology develops by itself, however. Continued government investment in research, development, and demonstration projects is a necessary complimentary policy.

The proposed rule also could empower the creation of a state-based, cost cognizant system of GHG reductions for the existing utility fleet. While the EPA has indicated it does not currently have plans to develop rules for existing sources, our work suggests that the EPA and the states can design and implement GHG performance standards for existing sources in a cost-effective manner. First, the statutory language (found in §111(d) of the Clean Air Act) is broad, suggesting that the EPA and states have discretion regarding its implementation. Second, unlike NSPSs, §111(d) does not require a uniform national standard, potentially allowing states to develop tailored plans for the existing sources within their borders. Third, §111(d) allows states to consider plant age, fuel type, and cost of compliance when designing the standards.

The impacts of climate change will differ across the country, as will the costs and opportunities for GHG emission reductions. By taking advantage of the flexibility built into the Clean Air Act, the EPA could empower states to act as laboratories for policy innovation, exploring different reduction strategies and potentially identifying more cost-effective strategies.

(These comments were submitted by Kevin Crapsey, Vice President of Corporate Strategy & Development for Eco Power Solutions.)

The recent EPA announcement that tightens carbon emissions on new power plants and ignores current power plants serves as a reverse incentive if the goal is to reduce overall carbon emissions. Michael Livermore, executive director of the Institute for Policy Integrity, raised the issue that when we grandfather old plants and raise standards on new ones, we increase the incentive to keep existing facilities around.

In that situation, we’re not really reducing our carbon emissions. Those existing plants emit more carbon than newer plants with newer technologies would emit. The situation is complicated by the December 2010 Mercury and Air Toxics Standards (MATS) that places limits on mercury and particulate matter emissions from existing power plants.

With these regulations combined, utilities and power plant operators are put in a bind when it comes to reliable delivery of electricity. Renewables are playing a growing, but still very small, role. Some are considering switching to different fuel sources -- typically natural gas. But the expense of a fuel-change retrofit is a major drawback, the low cost of natural gas may only be temporary and fracking continues to be controversial, as noted by the Electric Reliability Coordinating Council.

The new carbon rule places strains on the other main option for meeting the MATS standards -- retiring existing plants. This option also creates a real reliability issue.

What we need is a game changer. Utilities need a solution to meet EPA’s clean air standards while delivering reliable, cost-effective electricity. The answer lies in innovative multi-pollutant emission control technologies like that of Eco Power Solutions. It's one of several technologies that were short-listed by the EPA in the March 2011 MACT ruling.

In a nutshell, multi-pollutant emissions control technologies remove mercury, particulate matter, SOx, NOx and carbon emissions from fossil-fired power plants in an all-in-one solution, rather than needing separate technologies like scrubbers and flue-gas desulfurization. This all-in-one approach also reduces the cost of installation compared to installing a combination of traditional technologies. Essentially, we can clean up coal today at a price that is less expensive than traditional methods, a fuel-change retrofit or building a new power plant.

It’s a solution that changes the game from lose-lose to win-win. Utilities will actually meet the EPA’s goals of reducing our carbon emissions (and mercury and particulate matter) while continuing to deliver reliable electricity.

EPA’s proposed New Source Performance Standards for greenhouse gas emissions from certain fossil-fuel-fired power plants ensures new power generation will be at least as clean as new natural gas combined cycle plants. Specifically, EPA has proposed that new base load fossil‐fuel‐fired power plants meet an output‐based standard of 1,000 pounds of CO2 per megawatt‐hour (lb CO2/MWh). And in setting the standard, EPA has offered new compliance flexibility in the form of 30-year averaging. Essentially, new coal plants can be built now and controlled later, so long as the 1,000 lb CO2/MWh standard is met on average over a 30-year period. This is in addition to the “innovative compliance waiver” already offered by the Clean Air Act. This openness to flexible approaches is important, not just for this rule, but also more broadly in how EPA can use the Clean Air Act to achieve effective and cost-effective policy outcomes going forward.

While this measure sets an important precedent on use of the Clean Air Act to achieve climate goals in a way that permits flexibility and innovation, it is critical to note that the trend toward cleaner electricity production is already happening based purely on the economics. Natural gas prices are at a historic low, which is already leading power generators to shift toward natural gas. New plants are increasingly NGCC anyway (or in some markets, renewable generation), and the dispatch of existing plants is also shifting to favor existing (and previously underutilized) natural gas-fired power generation resources. In fact, the Energy Information Administration (EIA) recently reported that coal-fired power represents less than 40 percent of total generation in the US—for the first time since March of 1978—and the EIA’s preliminary Annual Energy Outlook for 2012 projects only 900 MW of new coal will come on-line to meet demand in the next two decades. And even this estimate of new unplanned coal capacity would be expected to come down, as natural gas prices have declined since that study was completed. So in essence, this rule will not have adverse impacts on jobs and coal because the shift in the energy market has already driven the shift to cleaner fuels and dramatically reduced the potential for new coal plants to be built.

While a Congressional solution that puts a price on carbon emissions across the entire economy is still the most economical approach to carbon regulation in the long-term, Congress should be comforted that EPA is using its existing authorities under the Clean Air Act in a careful and thoughtful manner. The standard proposed for new base load power generation can be met quite readily using the same combined cycle technologies that would, in all likelihood, have been used anyway—particularly given low natural gas prices stemming from our large domestic shale gas resource. And EPA has offered compliance flexibility that would permit use of other fuel choices should relative fuel prices shift again in the future, so long as the future plans for such plants build in low-emitting technologies. While the expected emissions reductions from this rule are quite modest, EPA has insured against the long-term lock-in of new high emitting power generation resources in a way that does not impact existing generators at all. Going forward, we will look to EPA to continue to make thoughtful policy choices. However, as future policy guidance will involve existing power sources, striking the right balance will require more extensive stakeholder engagement. We look forward to supporting the Agency by fostering stakeholder dialogue around effective and cost-effective policy solutions under the Act.

Last week, the Administration took a bold step forward to curb greenhouse gas emissions. In a long-anticipated action, EPA proposed new source performance standards (NSPS) for fossil-fueled power plants that would limit emissions from new plants to a rate of 1,000 lbs. of CO2 per megawatt-hour, averaged annually. This level is comparable to the annual average emissions rate of the existing fleet of U.S. natural gas power plants. The rule levels the playing field between coal and gas on greenhouse gas emissions, so new coal and gas plants will compete on price. When finalized, the rule will provide a much-needed and long-overdue step on the path towards full decarbonization of all domestic coal and gas power plants.

In the ensuing swirl of media coverage and stakeholder debate after the release of the draft rule, three key points must be considered:

· New coal plants can meet this standard using carbon capture and sequestration (CCS) technology, which is available and cost-effective today;

· Already, commercial CCS projects are in operation today, and several coal CCS projects under development can beat the proposed emissions standard;

· The regulatory signal provided by the proposed performance standards sets the stage for wider adoption of CCS technology.

All the key elements of CCS technology – capture, transport and sequestration of CO2 -- for meeting the new standard are available and in use today. Scrubbers that can capture some or virtually all of the CO2 from smokestack emissions and synthesis gases have been available for decades and are already used today on coal and natural gas power plants. To transport the captured CO2, the U.S. has 4,000 miles of CO2 pipelines currently serving the enhanced oil recovery (EOR) industry, primarily in Texas. And, the U.S. oil industry has safely injected over a billion tons of CO2 since the mid 1970s into oil fields for enhanced oil recovery, and that CO2 remains trapped in the rocks that formerly held the recovered oil.

There are several examples of commercial carbon capture in the U.S., including carbon capture from a coal power plant in Trona, California and a natural gas power plant in Bellingham, Massachusetts, where the captured CO2 was used for commercial purposes.

In addition, for the past 12 years the Dakota Gasification plant in Beulah, North Dakota has captured up to 2 million tons of CO2 per year and piped it to the oil fields in Saskatchewan, where it is sequestered. And, there are several U.S. coal projects under development that incorporate CCS technology, including:

· Southern Company’s Plant Ratcliffe, a coal gasification power plant that is already under construction in Kemper County, Mississippi and will produce 524 MWe of electricity, but emit CO2 at a rate of about 550 lbs. per megawatt-hour of gross generation (“MWh” here)-- below the proposed all-new source 1000 lbs./MWh performance standard – because it will capture 3.5 million tons of CO2 per year for EOR sequestration.

· Summit Energy’s Texas Clean Energy Project, another coal gasification plant, is expected to begin construction in the Spring of 2012 in Midland Texas, and will produce 195 MWe of electricity with a CO2 emissions rate of 228 lbs./MWh – well below the EPA performance standard, by capturing 2.5 million tons of CO2 per year for EOR sequestration.

· Tenaska’s Taylorville Energy Center, a proposed coal gasification power plant awaiting final permitting, is planned to produce 603 MWe of electricity annually while only emitting CO2 at a rate of 642 lbs./MWh – well below the EPA performance standard, by sequestering approximately 3.45 million tons of CO2 per year.

Figure 1 below compares the relative emission levels of these proposed plants with the EPA’s proposed standard.:

EPA’s draft rule has broad implications for building coal or gas power plants and points the way to the future of zero-carbon fossil energy. Even without the rule EPA has proposed, developers today favor new gas plant construction because natural gas prices are at an all time low and natural gas plants have lower capital and operating costs than coal plants. And, while natural gas prices appear likely to remain low due to the current boom in unconventional gas development, that may not always be the case (see figure 2). EPA’s proposed standards provide an important hedge against future energy sector CO2 emissions, which is necessary to keep CO2 emissions down after the point when natural gas prices ultimately increase.

In addition to the important first regulatory signal provided by EPA’s proposal, there is latent commercial demand for CO2 that also can help move the CCS industry forward. According to a 2011 report by the National Energy Technology Laboratory, there is 20 billion tons of potential commercial CO2 demand related to enhanced oil recovery at existing on-shore oil fields in the U.S. This industry currently relies mostly on mined natural CO2. While there is not enough mined CO2 to meet that demand, new sources of captured anthropogenic CO2 from the power sector can. The EOR industry can utilize up to 94 GW worth of CO2 captured from coal-fired power plants over the next 30 years. This amount is substantially larger than the growth in base-load fossil power generation in the U.S. through 2035, as projected by the Energy Information Administration.

In short, the proposed standards provide the first-ever step in regulating the CO2 emissions from this leading emitting industry. They are not likely to change current power generation technology choices, but the new rules do provide an important limit for future emissions should the market swing back to coal power generation. And, because the standards by law must be reevaluated and revised periodically, and because existing source standards also must be evaluated now, EPA’s proposal also provides an important beginning to the much-needed process of reducing the carbon emissions from the entire fossil-fueled power sector. Clean Air Task Force therefore applauds EPA for proposing this rule and urges them to finalize it as soon as possible.

EPA’s proposed “Carbon Pollution Standard” requires new fossil-fuel electric generating units (EGUs) to emit no more than 1,000 lbs of carbon dioxide (CO2) per megawatt hour. About 95% of all natural gas combined cycle (NGCC) power plants already meet the standard (p. 115). No existing coal power plants come close; even the most efficient, on average, emit 1,800 lbs CO2/MWh (p. 134).

A coal power plant equipped with carbon capture and storage (CCS) technology could meet the standard, but the levelized cost of new coal plants already exceeds that of new natural gas plants, and “today’s CCS technologies would add around 80% to the cost of electricity for a new pulverized coal (PC) plant, and around 35% to the cost of electricity for a new advanced gasification-based (IGCC) plant” (p. 124).

In short, EPA has proposed a standard that no commercially-viable coal plant can meet. This is not surprising given President Obama’s longstanding ambition to “bankrupt” coal and his vow to find other ways of “skinning the cat” after the election-day “slaughter” of cap-and-trade Democrats. What is surprising is the rule’s weirdness – the contortions EPA performs to make the proposal seem reasonable.

(1) EPA tries to palm off natural gas combined cycle — a type of power plant — as a “control option” or “system of emission reduction” for coal-fired power plants.

EPA picked 1,000 lb CO2/MWh as the “standard of performance” for new fossil-fuel EGUs because that is the “degree of emission limitation achievable through natural gas combined cycle generation” (pp. 35-36). But consider how the Clean Air Act (CAA) defines “standard of performance” [Sec. 111(a)(1)]:

“The term ‘standard of performance’ means a standard for emissions of air pollutants which reflects the degree of emission limitation achievable through the application of the best system of emission reduction which (taking into account the cost of achieving such reduction and any nonair quality health and environmental impact and energy requirements) the Administrator determines has been adequately demonstrated.”

Performance standards are supposed to reflect the best “system of emission reduction.” But natural gas combined cycle is not a system of emission reduction. It is a type of power plant. EPA is not proposing that new coal power plants install emission reduction systems that have been “adequately demonstrated.” Rather, 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.

To my knowledge, this is the first time EPA has ever defined a performance standard such that one type of facility can comply only by being something other than what it is.

(2) EPA lumps coal boilers and natural gas turbines together in a newly-minted industrial source category (fossil-fuel EGUs) — but only for CO2 emissions, not for conventional air pollutants.

EPA sets performance standards for specific categories of industrial sources. A coal boiler is different from a gas turbine, and up to now EPA reasonably regulated them as different source categories, under different parts of the Code of Federal Regulations (Subpart Da for coal boilers, Subpart KKKK for gas turbines). EPA now proposes to regulate them as a single source category — fossil-fuel EGUs — under a new subpart numbered TTTT. But only for CO2! Coal boilers and natural gas turbines will continue to be regulated separately for criteria and toxic pollutants under Subparts Da and KKKK (p. 71).

Why hold coal boilers and gas turbines to different standards for those pollutants? EPA’s answer:

“This is because although coal-fired EGUs have an array of control options for criteria and air toxic air pollutants to choose from, those controls generally do not reduce their criteria and air toxic emissions to the level of conventional emissions from natural gas-fired EGUs” (p. 102).

The same logic argues against imposing a single CO2 standard on coal boilers and natural gas turbines. Coal plants have no “adequately demonstrated” options for reducing CO2 emissions to the level of emissions from natural gas plants. CCS may qualify in the future but it is too costly now (p. 100).

So we’re back to EPA’s contortion of classifying natural gas combined cycle as an emission-reduction system adequately demonstrated for coal power plants.

(3) The proposed rule exempts modified coal power plants from the CO2 performance standard even though CAA Sec. 111 requires modified sources to be regulated as “new” sources.

CAA Sec. 111(a) defines “new source” as “any stationary source, the construction or modification of which is commenced after the publication of regulations (or, if earlier, proposed regulations) prescribing a standard of performance under this section which will be applicable to such source” (emphasis added). The provision defines “modification” as “any physical change in, or change in the method of operation of, a stationary source which increases the amount of any air pollutant emitted by such source or which results in the emission of any air pollutant not previously emitted.” These definitions clearly imply that, once EPA promulgates CO2 performance standards for power plants, a coal-fired EGU that increases its CO2 emissions due to a physical change or change in operation is a “new” source. Yet under EPA’s proposal, modified coal-fired EGUs will not be treated as new sources.

Why? EPA claims it does “not have adequate information as to the types of physical or operational changes sources may undertake or the amount of increase in CO2 emissions from those changes” (p. 151). That’s odd. EPA has been collecting data on power plant CO2 emissions since the 1990 Clean Air Act Amendments (Sec. 821) and on power plant modifications for much longer.

EPA also says it lacks “adequate information as to the types of control actions sources could take to reduce emissions, including the types of controls that may be available or the cost or effectiveness of those controls” (p. 151). More plausibly, EPA knows full well that the only available control options are to install CCS or re-power with natural gas, and that imposition of such requirements would shutter coal plants, drive up electric rates, jeopardize power plant safety and grid reliability, and provoke an angry political backlash. Is EPA again “tailoring” (amending) the CAA to avoid a regulatory debacle of its own making?

(4) The proposed rule has no monetized costs or benefits.

EPA says the rule will not “add costs” to the electric power sector, ratepayers, or the economy, because EPA “does not project construction of any new coal-fired EGUs” between now and 2030. Rather, EPA expects power companies “to build new EGUs that comply with the regulatory requirements of this proposal even in the absence of the proposal, due to existing and expected market conditions” (p. 200), namely, the superior economics of natural gas (p. 36).

The rule won’t “add costs” because it ratifies where the market is already going. By the same token, however, the rule has no estimated benefits. EPA does “not anticipate any notable CO2 emissions changes resulting from the rule,” hence “there are no monetized climate benefits in terms of CO2 emission reductions associated with this rulemaking” (p. 202).

So what’s the point – why propose a “carbon pollution standard” that won’t reduce CO2 emissions and has no estimated climate benefits?

Because the rule expands EPA’s control over electric utilities and creates a powerful new tool for “skinning the cat.” It puts fossil-fuel EGUs squarely under EPA’s regulatory thumb with respect to their inescapable and principal byproduct, CO2. It sets the precedent for EPA to promulgate CO2 performance standards for other industrial source categories. Most importantly, it tees up EPA to put the regulatory squeeze on modified and existing coal power plants in a second Obama administration. In EPA’s words:

“Although modified sources would not be subject to the 1,000 lb CO2/MWh standard for new sources, the EPA anticipates that modified sources would become subject to the requirements the EPA would promulgate at the appropriate time, for existing sources under 111(d)” (p. 153).

“The proposed rule will also serve as a necessary predicate for the regulation of existing sources within this source category under CAA Section 111(d)” (p. 201).

The proposal is EPA’s first — not last — action to fulfill the agency’s December 2010 settlement agreement with state attorneys general and environmental groups. The agreement requires EPA to set CO2 performance standards for both new and modified EGUs plus emission guidelines for non-modified EGUs (p. 64). By creating the framework for limiting CO2 emissions, the “carbon pollution standard” puts coal generation in an ever-tightening regulatory noose.

Like the rest of EPA’s greenhouse agenda, the proposed rule is an affront to the Constitution’s separation of powers. Congress never voted to prohibit construction of new coal power plants. Indeed, Congress declined to impose less onerous constraints on new coal generation when Senate leaders pulled the plug on cap-in-trade. Congress should reassert its constitutional authority, overturn the rule, and rein in this rogue agency.

The upshot of the US Environmental Protection Agency (EPA) carbon pollution standards for power plants: clean air, improved health and the cleanest, most modern facilities in the world.

Each day nearly half of all Americans go about their daily lives breathing unhealthful levels of ozone pollution. In total, 154.5 children and adults attend school, work and live where this invisible respiratory irritant often better known as smog is so pervasive that it can actually cut lives short.

America’s coal-fired power plants have long been the nation’s most significant industrial source of smog forming emissions. Despite decades of pushback, the recent adoption of the Mercury and Air Toxics Standards (MATS) promises to save 11,000 lives each year. While this new air quality standard will also safeguard public health by effectively blocking 91 percent of the mercury found in coal from being released into the air we breathe and will also be responsible for preventing tens of thousands of asthma attacks, bronchitis cases and heart attacks, still too many families will remain living in an air pollution danger zone.

Those most vulnerable among us are at greatest risk to the serious health consequences associated with breathing ozone pollution. People with lung disease such as asthma or emphysema; children; anyone 65 years old and older; and also those who simply work or exercise outdoors are more likely to experience shortness of breath; inflammation in the lining of their lungs; and increased susceptibility to respiratory infections. People living with lung disease are more likely to require medical treatment or even to be hospitalized on days when ozone levels are high.

Consider this; children who are raised in communities where ozone levels do not meet basic public health standards may face reduced lung function in adulthood, which increases their risk of lung disease later in life. An extraordinary number of these children and their families are living in downwind communities with virtually no political ammunition to defend against the air toxics from power plants that blow in from far outside their state’s invisible borders. Putting a stop to this steady stream of secondhand smog by moving ahead with the Cross-State Air Pollution Rule (CSAPR) will save up to 34,000 lives each year and will substantially reduce the number of asthma attacks and emergency room visits caused by breathing another community’s dirty air. Regrettably, this life saving air quality measure has predictably been met by extreme resistance from power plant operators wishing to delay and in some cases avoid their rightful public health obligation.

While CSAPR remains tied up in the maze of our legal system, efforts to protect public health from air pollution must continue on. All the while, power plants continue to pump out the essential ingredients necessary to form smog. The formula is alarmingly simple; two raw gases produced by smokestacks and tailpipes—nitrogen oxides and hydrocarbons—become smog when temperatures rise on sunny days. Unchecked carbon pollution is likely to mean more unseasonably warm summers and winters and that may lead to more high smog days that threaten health.

Addressing carbon pollution produced by power plants is yet another necessary step in reducing the harm caused by the pervasive threat of ozone pollution. The Clean Air Act is our best defense against air pollutants that cut lives short and destroys quality of life by causing serious respiratory illnesses. That is why the EPA must implement the Clean Air Act to set reasonable standards to safeguard public health from the burden of ozone pollution linked to power plant carbon pollution.

Public support for EPA taking action is very strong. In fact, nearly three-quarters of those surveyed support new protections on carbon pollution from power plants, including overwhelming majorities of Democrats and independents and a majority of Republicans.

In our continued fight for healthy air, we all must strongly oppose any effort that would weaken, block or unjustly delay the authority of the EPA from fully implementing the Clean Air Act as it is intended. Our health depends on it.

This post was co-authored with Nicholas Bianco, Senior Associate, WRI

EPA’s newly proposed standards are an important step toward addressing the threat of unmitigated carbon pollution in altering the climate. EPA’s action will ensure that power suppliers consider greenhouse gas emissions before building any future power plants. Moreover, this lays the groundwork for future U.S. policies and action to address climate change.

The proposed standards set an emissions standard of 1,000 pounds of carbon dioxide per Megawatt-hour— slightly more carbon intensive than combined cycle natural gas plants built today. New coal units could comply with the regulations by committing to capture and store a portion of their carbon dioxide emissions or, where feasible, by using waste heat through combined heat and power systems.

These standards would reinforce recent trends in the electricity sector that point towards lower carbon sources. In their latest Annual Energy Outlook, the U.S. Energy Information Administration (EIA) projects few new unplanned, uncontrolled coal plants through 2035. (Unplanned units are new builds projected by the model. Planned units, in contrast, are those that have commenced construction.) This continues the trend we have seen in recent history, where less than 7% of U.S. electric generation capacity built since 1990 has been coal.

However, current trends and projections are not a guarantee for the future. With a rapidly aging fleet of electric generators moving towards retirement (more than a quarter of fossil fuel fired plants are more than 40 years old), these guidelines provide important insurance that the trend toward building lower carbon power plants will continue.

EPA has struck a good balance. The new standards provide businesses with greater certainty about the rules of the game moving forward. As PSEG Chairman and CEO Ralph Izzo said these regulations “provide the industry with much needed regulatory certainty.”

Similarly, in a statement, a group of electric generation and distribution companies, known as the Clean Energy Group, said that “based on our review of recent projections by the U.S. Energy Information Administration and current market dynamics, the proposed GHG performance standards for new sources will not impact the reliability of the electric system.”

Some have suggested that decisions about America’s energy are best left to Congress. But, Congress had an opportunity to set a course for national energy and climate policy in 2010, and they were unable to find common ground. Thus, we need EPA to use its authority under the Clean Air Act, an authority that was affirmed by the Supreme Court.

Ultimately, more needs to be done to reduce emissions from the power sector. WRI’s analysis suggests that there are considerable opportunities here to reduce emissions under existing federal and state authority, including regulation of existing power plants under the Clean Air Act, efficiency standards and investments, and state-level renewables requirements. Additional action at the federal level, through a clean energy standard and other approaches, could drive further reductions. Doing more in the power sector and beyond will be essential if the U.S. is going to meet its commitment of reducing emissions 17% below 2005 levels by 2020.

EPA’s action on new plants is important as it moves the United States farther along a path toward a low-carbon future.

The EPA’s proposed rule on greenhouse gas emissions issued Tuesday effectively puts the brakes on new coal fired generation for the foreseeable future. At first blush, it appears to actually mean, though it does not state it overtly, that going forward only gas fired generation will be approved because the current carbon capture equipment renders new coal plants both costly and inherently inefficient.

The debate over this new ruling has provoked outrage that sounds a lot like, “Mommy is making me take a nap and I don’t want to!” I think we have all heard these cries before—usually in nursery schools or on airplanes accompanied by kicks to the back of another passenger’s seat. Translated into an industry scenario, this tantrum would mean coal-using and coal-producing states promoting the burning of coal until Washington is up to its neck in rising swamp water and being subjected to those disturbing anti-coal ads where unseen babies cough and hack while visiting the Capitol. Typically, I would predict the same results as always: everybody screaming and kicking with little to no real progress achieved.

I do not usually agree with the EPA’s rulings, but this rule makes sense. While agreeing with the EPA on something is quite strange and unsettling to me, the ruling seems to be based on logic and could even promote some desirable outcomes. Before the rule was unveiled, the market had already figured out the economics of new generation and had essentially self-selected gas fired plants as the choice for new generating machinery. This economic leaning is even prevalent overseas where natural gas has not yet reached the new, greater levels of proven exploration and supply as it has in the United States. It is as if the fundamental economics of the market have not only set the stage, but have written the music and libretto as well. The administration can choose not to give credit to the market, but I think it is safe to say that we all understand the forces keeping the ball moving forward here. In this case, almost all of the new and future generation decision makers have either made a case – and signed contracts – for new gas fired generation or have moved away from fossil generation completely. Perhaps, in the not-so-distant future, a longer, more complicated ruling will emerge to replace this one that falls in line so nicely with the current market economics. I suspect that any such a ruling will miss the mark and then I will feel that all has returned to normal.

However, if the latest proposed EPA rules really just overlap what the market is already telling us, why propose the rules at all? There are two answers. . . The first is that we do not trust the market to place enough value on soft issues, like melting polar ice caps and rising sea levels, on its own, and want the “correct” decision to be blatantly clear for us. Thus, Rule Number 1: Don’t build generation facilities that use up our energy store and free up carbon to heat up our planet. The second reason is that we have created large organizations to issue regulations. No regulations would mean no organizations. Therefore, it is natural for these organizations to issue what amounts to constraints, in the modeling sense, no matter what. In this case, it is just too convenient to pass up a rare opportunity to issue rules that cause no meaningful change from what the market is already doing. This, folks, is the answer behind the mystery. Got gas? If you do, you know it. And, if you don’t, you will go get it because the market and the EPA agree: Having gas is good.

The EPA March 27 2012 decision is a critical step forward for limiting our carbon emissions - which are the largest in the world along with China's - emissions that could lead to catastrophic climate change. The Pentagon finds that climate change is a critical issue of national security - so this move is important for US national security. Together with the use of the CO2 captured to enhance oil recovery which is part of the equation - this regulation enhances also the availability of oil and US economic development.

This single rule therefore enhances national security, economic development and helps control the risk of climate change. This is a win - win - win for the US.

Power plantsare indeed the largest emitters of carbon in the world - about 45% of global CO2 emissions.

In addition, the rule has a market creation effect. Limiting carbon emissions from power plants is the foundation for creating a carbon market ("cap and trade") in the US as a whole, an efficient market solution to a change in energy infrustructure towards renewable energy. We would be joining the EU carbon market that emerged from the 1997 UN Kyoto Protocol, which is international law since 2005 and is now trading $200 Bn a year. As the author of the Kyoto Protocol's carbon market I applaud this move by the EPA and President Obama Administration - since it provides the basis for a market solution to the carbon emissions problem in the US. It allows the US to join forces with the EU, Australia, China and the developing nations in the only international agreement we have to limit carbon emissions in the world - the Kyoto Protocol and its carbon market, whose limits have recently extended to 2015. California already created its own mandatory carbon market in 2012.

The carbon market can be transformational. A similar market - for SO2 emissions - was created 20 years ago the same way - by limiting sulphur emissions from power plants. The SO2 market successfully traded in the CBOT for twenty years and is widely credited with resolving efficiently acid rain in the US.

What about the Congress? The EPA was given its mandate to limit carbon emissions from a Supreme Court ruling in 2007 that found that the US Clean Air Act encompasses the control of carbon emissions. No approval from Congress is needed therefore. Nevertherless, one can expect legal challenges to the EPA ruling - this is part of a robust democratic system where dissent is always part of the equation. California's carbon market was already legally challenged and the opposition lost - it is now the law in California

Following this week's EPA ruling, which is limited to new power plants, the US has the basis for a nationwide system to limit its carbon emissions: limits for vehicles exist since 2010 and limits on power plants are now in place (if only for new plants).

My read is that progress is being made. It is choppy and uneven - but that is the way change takes place. At least on this issue we may be avoiding a Civil War - which was needed to resolve another highly controversial national issue, the abolition of slavery.

Onward and forward.

Welcome to the 21st century. EPA finally decided that the "business as usual" approach for the coal generation industry, should come to an end. The dirtiest coal generation plants were grandfathered in the Clean Air Act due to pleas by the industry that they would be retired in the 1990's. They weren't. EPA has decided not to address the other heavy metals, other than mercury where the evidence was beyond overwhelming. EPA has decided to overlook the portfolio of carcinogens released in the air and water from coal mining. So EPA took the middle ground, using the natural gas standard as "the best available fossil generation" as the emission standard. By the way, that's not clean. By the way, heavy metals will still be emitted. By the way, all the carcinogens will be emitted too. But the EPA decision is a step in the right direction, albeit a compromise, and overlooking all the other "nasties". Congress should stay out of it, but the Republican leadership will gnash and lament how horrible it will be an undermine 'life as we know it' - no different than the whale oil political supporters did to try to undercut the dawning of electricity. But the West Virginia, Kentucky, and Wyoming coal industries will just export the coal to a welcoming international market who doesn't care about the global climate or health concerns. Will the EPA decision hurt the US economy? No, it actually will further lower our international trade deficit. But the political whining will be deafening, and the public will likely not notice that COPD (chronic obstructive pulmonary disease) in 2011 surpassed stroke as America's #3 killer due the emissions from coal and diesel.

Last week, EPA announced its landmark plan to limit greenhouse emissions from newly constructed power plants. The proposed emission rules are the first move by the world’s largest economy to broadly regulate these emissions.

It exemplifies Groucho Marx’s observation that “politics is the art of looking for trouble, finding it everywhere, diagnosing it incorrectly, and applying the wrong remedies.” It is based on a faulty premise, will have an immeasurable impact on global CO2 levels, will not improve human health, and will increase electricity prices.

Even though global temperatures have not risen in over a decade and advances in climate science have further undermined the foundation of climate orthodoxy, the Obama Administration continues to wage its war against fossil energy.

In an ongoing effort to regulate greenhouse gases under the Clean Air Act, EPA has stated that that future power plants built in the U.S. cannot emit more than 1,000 pounds of CO2 per megawatt-hour. But here’s the catch: by most accounts, the proposal will do little to curb greenhouse gas emissions. The effect will be immeasurable. That’s because developing nations are now the major source of CO2 emissions

As a result of the shale gas revolution, natural gas-fired plants are likely to be the direction of new projects at home and they also happen to already meet the standard. Existing coal plants, by contrast, and those started before the effective date do not meet the standard, but are exempt from the regulations and so can carry on emitting. But coal fired power is still the cheapest source of electricity, so the rule will raise consumer prices by pricing that fuel out of the market by regulation.

Until the price of gas dropped dramatically, coal fired power was cheaper. If the price of gas increases to the $6-7 mcf range, gas fired power could once again be more expensive, and consumers would be hit with higher prices. Market distortions through regulation are dangerous and unintended consequences can be greater than intended ones.

More troubling, however, is that while the rule is symbolic in many respects, it further empowers EPA to regulate otherwise unregulated greenhouse gas emissions and enforce more onerous regulations on the energy sector down the road. One could easily make the case that this is a backdoor attempt by the Administration to circumvent Congress and implement the key components of a nation-wide cap-and-trade regime.

It’s also an example by the Administration of how it uses market-distorting incentives to push for the adoption of uneconomic and unproven technologies. In this case, the EPA would require that new coal plants use carbon capture technology to reduce carbon emissions, despite the fact that it currently doesn’t exist in market form. Just last year, the nation’s largest CCS project run by American Electric Power in West Virginia, shelved plans to implement a full-scale carbon-capture plant at its 31-year-old coal-fired plant, citing the expense. The push for widespread adoption of CCS technology is similar to the wishful thinking by President Obama to put 1 million electric cars on the road by 2015. And we’ve seen the poor results of that effort.

EPA also claims the regulation will have significant health benefits. That’s a phony argument and should not go unchallenged because to do so would further weaken the standards for judging health benefits. Air quality has steadily improved and will continue to do so. EPA seems to be pursuing a level of air quality that may never have existed.

While the emissions rules are a win for the EPA, they are a loss for American taxpayers. The regulations come with an $11 billion per year price tag and ironically won’t stop coal plants from continuing to emit CO2. But they will undoubtedly reinforce the position, granted erroneously by the Supreme Court, that the EPA can regulate CO2 emissions. They’ll also help the Administration continue to promote the wide scale adoption of costly and uneconomic “green” technologies. Therefore its time that our elected lawmakers tell the Administration to stop using regulations to implement policies rejected by Congress.