Thursday, March 29, 2012

Carbon Dioxide Limit for New Power Plants

On Tuesday the US Environmental Protection Agency (EPA) proposed the first Clean Air Act standard for carbon dioxide. Under the new rule, new power plants will have to emit no more than 1,000 tons of carbon dioxide per megawatt-hour of energy produced. That standard effectively changes the fuel of choice for all future power capacity additions to natural gas, nuclear, or the renewable category (with government subsidies). All existing plants and currently permitted and built in the next 12 months will be grandfathered and exempt from this new rule. According to the EPA a coal plant currently produces about 1,800 pounds of carbon dioxide per megawatt-hour of electricity. EPA says the rule that requires new plants to produce no more than 1,000 pounds of carbon dioxide per megawatt-hour as creating “a path forward for new technologies to be deployed at future facilities that will allow companies to burn coal, while emitting less carbon pollution.” Nonsense, there is no proven commercial technology that can meet this carbon standard for coal fired plants. EPA intends that the current crop of coal fired power plants will be the last.

During the past year, EPA finalized two regulations that were specifically targeting coal fired power plants. The Mercury and Air Toxics Standards (MATS) regulates mercury, arsenic, acid gas, nickel, selenium, and cyanide. MATS was finalized on December 21. 2011. The Cross-State Air Pollution Rule, CSAPR, which requires reductions of sulfur-dioxide and nitrogen-oxide emissions in coal fired plants, was made final in July but at the end of last year, the U.S. Court of Appeals District of Columbia Circuit granted a stay to the implementation of the CSAPR pending resolution of the legal challenges. The case is scheduled to be heard in mid-April 2012. CSAPR, if eventually implemented will reduce SO2 emissions by 73% from 2005 levels and NOx emissions by 54% at the approximately 1,000 coal fired electrical generation plants in the eastern half of the country.

Our modern society requires power and the new regulation by grandfathering the existing power plants ensures that we will not be sitting in the dark any time soon. In the U.S. in 2010 over 90% of electrical power was produced by steam turbines powered by coal, oil, gas, and bio fuels. Wind and water may be used to spin the turbines as well. In 2010 Coal produced 45 % of electricity, nuclear power generated 20% of the electricity used, natural gas generated 24% of the electricity used, hydroelectric generated 6%, wind 1% and oil, wood, biomass, geothermal solar and other generated the rest. The Mercury and Air Toxics Standards and the Cross-State Air Pollution Rule will reshape the industry reducing coal fired plants. The new source carbon dioxide rule will ensure that any additional electrical capacity built will not be coal and MATS and CASPR will reduce the existing capacity of coal produced electricity. There will be impacts to the economy and our society to the reduction in demand for coal in the United States, the costs to convert, replace and upgrade power plants, and increasing the demand for natural gas which appears to be at this moment the fuel of choice.

In 2010, U.S. coal production was 1,050 million metric tons with 92.5% of the coal used to generate electricity. Without electrical generation there is little demand for coal and coal miners. The EPA’s MATS and CSPAR regulation and the greenhouse gas regulations will reduce and possibly someday eliminate the economic feasibility of coal fired electrical generation plants. However our nation requires power, and the current coal fired power plants will continue to need coal for the short term. The use of coal to generate electrical power has an interesting history. There was a time when petroleum was widely used for electrical generation. In an attempt to regain energy independence after the gas rationing and oil shortages of the 1973 Oil Embargo, the nation turned to its vast coal reserves. Between 1973 and 1976, coal production increased by 14.4%. In 1978, the Power Plant and Industrial Fuel Use Act mandated conversion of most existing oil-burning power plants to coal or natural gas. Thought the act was repealed in 1987, the impact on our nation and its economy extends to today, though the goals and values of our government have changed. Now the EPA is reshaping the future, clearly away from coal though the impacts on our environment and economy intended and any unintended are yet to be seen.

Looking at the economy as a whole and not just the electrical power sector, in 2010 the major energy sources in the United States are petroleum-gas and oil (37%), natural gas (25%), coal (21%), nuclear (9%), and renewable energy primarily biomass and hydro power generation (8%). The United States only produces about 75% of the energy we consume, the shortfall is imported petroleum. The major users of energy in the United States are heating of residential and commercial buildings (11%), industry (20%), transportation including cars, trucks, trains, planes and ships (27.4%), and electric power generation (40%).

Natural gas appears to be the current fuel of choice. It is the source of 25% of the energy consumed in the United States and in 2010 was used almost equally for industry, electrical generations and residential and commercial heating. Most, but not yet all, of the natural gas consumed in the United States is produced in the United States. Domestic natural gas production and consumption were nearly in balance through 1986, though U.S. production of natural gas peaked in 1973. From 1986 to 2006 consumption of natural gas outpaced domestic production, and imports rose. Then in 2006 U.S. production of natural gas began to increase as a result of the development of more efficient and cost effective hydraulic fracturing techniques. In 2010 natural gas production in the United States reached the highest recorded annual total since 1973 and continues to climb. Regulation and control of hydraulic fracturing will impact the cost of natural gas production in the United States, the availability of gas and the environmental impact to our natural resources.

The earth’s atmosphere is interconnected. The EPA has estimated that just one-quarter of U.S. mercury emissions from coal-burning power plants are deposited within the contiguous U.S. The remainder enters the global cycle. Conversely, current estimates are that less than half of all mercury deposition within the United States comes from American sources. Worldwide CO2 emissions are up 6%, to over 30 billion tons, in 2010 40% above the 1990 level. As you can see above the increase in CO2 emissions in the United States was far more modest, increasing 8% over 19 years. The worldwide level of CO2 is higher than the worst-case scenario outlined by climate experts just five years ago, but temperatures have not (yet) risen as projected by the climate models. The relationship of climate change to worldwide CO2 levels may not be the one assumed in the climate models. Nonetheless, the EPA continues to work diligently to achieve President Obama’s commitment in Copenhagen to reduce United States emissions of CO2 17% by 2020.

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