EPA’s Coal Wars Could Sink America’s Economy

By James H. Rust

While campaigning in San Francisco during the Democratic Party primaries in January 2008, presidential candidate Obama told The San Francisco Chronicle editorial board, “So if somebody wants to build a coal-powered plant they can; it’s just that it will bankrupt them because they’re going to be charged a huge sum for all that greenhouse gas that’s being emitted.”

Once elected, President Obama tried to keep his promise through the American Clean Energy and Security Act of 2009, also known as the Waxman-Markey Bill, which narrowly passed the House 219-212. Its cap-and-trade provision on carbon dioxide (CO2) emissions would put a price on CO2 emissions and gradually reduce emissions allowed until they reach 17 percent of the 2005 level by 2050. That would have put per-capita CO2 emissions at Civil War levels.

After considerable outcry when the House recessed in August 2009, Senate leaders decided not to consider the bill. After the November 2010 election losses, briefings by Democrat Senate leaders for President Obama indicated cap-and-trade was dead. President Obama declared, “Cap-and-trade was just one way of skinning the cat.” From that point the cat was slowly skinned by regulations from the U.S. Environmental Protection Agency (EPA) to limit emissions from electric power plants such as mercury.

The cat was totally skinned on March 27 of this year, when the EPA published a press release announcing its proposed first “Carbon Pollution Standard for Future Power Plants.” Most noteworthy in this proposed standard is that new power plants with a capacity exceeding 25 megawatts (MW) would not be allowed to produce more than one pound of CO2 per kilowatt-hour produced. This makes coal no longer an option as a fuel without carbon capture and sequestration. To date, this has not been accomplished on a large scale. The result is that electricity costs would dramatically increase because of the inability to use cost-effective coal and the sequestration, or storage, of a life-supporting gas.

This attempt to limit releases from future electricity generating plants results from the EPA’s misguided attempts to declare CO2 a pollutant. CO2 is a naturally-occurring gas, essential for sustaining life on this planet. All annual sources of emitted CO2 total an estimate 800 billion tons; about 3 billion tons are from U.S. power plants.

The concentration of the gas in the atmosphere has increased from 280 parts per million (ppm) in 1800 to 395 ppm million in 2012. Historically, concentrations in the atmosphere have been as high as 6,000 ppm. Those who work in agriculture can vouch that increased atmospheric CO2 in the past 60 years has increased plant growth and improved resistance to water shortages.

The proposed standard would allow natural gas to be used as a fuel, provided that conversion of the energy from burning methane to electricity must be 47 percent. Combined cycle gas turbines can achieve these efficiencies. This process burns methane as a fuel for a gas turbine then takes the hot turbine exhaust gas to produce steam for a steam turbine. This is routinely done with large natural gas-fueled power plants.

The standard would also allow oil for electricity generation, but  the efficiency rate increases to 53 percent, which would be a challenge.

A big question is how this new pollution standard would interact with implementation of solar and wind electric facilities. Both of these renewable energy forms have almost instantaneous rises and falls in power generation due to cloudiness, morning and evening changes in solar output and wind variability. Keeping electricity generation reliable would require fast-responding backup electricity sources. Gas turbines kept in rotating standby operation can match these changes but come nowhere close to meeting the EPA standard. Using combined-cycle gas turbine plants for renewable energy backup most likely will not meet EPA requirements.

Increasingly stringent EPA requirements have forced utilities to shed the use of coal for electricity generation. Four years ago, 50 percent of our electricity came from coal use. At the end of 2011, this use had fallen to 40 percent. This new requirement would phase out the use of coal completely by 2050. The major replacement of choice will be natural gas, causing an increase in the price of natural gas and its rate of depletion.

Coal is useful for generating electricity and is the primary fuel for electricity generation in Georgia. Natural gas has better uses in heating, water heating, cooking, transportation and producing chemicals. The carbon footprint from heating water from a gas-fired power plant is greater than the carbon footprint from using coal to generate electricity: Natural gas, mostly methane, has more than 20 times the greenhouse intensity of coal.

Most Americans are unaware of the impact of this requirement, a start to phasing out the use of fossil fuels. This rule alone will cause future dramatic increases in electricity costs and great hardships for those already struggling to pay electricity bills. All businesses will be affected, many leaving the country for areas with more reasonable electricity costs, and product prices will increase.

The country’s economy is somewhat fragile at this time. The hopes for the future in the vast, abundant fossil fuel resources recently found and under development will be dashed as the new EPA pollution standards render much of them unusable.

This EPA carbon pollution standard is the first standard. If it prevails, more will follow until all burning of fossil fuels is prohibited. The next target will be nuclear power. Left will be solar, wind and biofuels as energy resources. Unless America’s consumers, taxpayers and ratepayers express their outrage over this tyranny by regulation, the EPA’s path will reduce this nation to an economy and lifestyle similar to the early 20th century.

James H. Rust, a retired Georgia Tech nuclear engineering professor and policy advisor to the Heartland Institute, wrote this commentary for the Georgia Public Policy Foundation. The Foundation (www.georgiapolicy.org) is an independent think tank that proposes practical, market-oriented approaches to public policy to improve the lives of Georgians. Nothing written here is to be construed as necessarily reflecting the views of the Georgia Public Policy Foundation or as an attempt to aid or hinder the passage of any bill before the U.S. Congress or the Georgia Legislature.

© Georgia Public Policy Foundation (April 4, 2012). Permission to reprint in whole or in part is hereby granted, provided the author and his affiliations are cited.