Monday, December 26, 2011

EPA Mercury Air Standards and Electrical Power in the United States

On Wednesday, December 21, 2011 the U.S. EPA released the final regulation for controlling mercury, and other toxic emissions from coal fired power plants. The Mercury and Air Toxics Standards (MATS) regulates mercury, arsenic, acid gas, nickel, selenium, and cyanide. The standards will slash emissions of these pollutants primarily from coal fired electrical generation plants. This should not be confused with the Cross-State Air Pollution Rule, which requires reductions of sulfur-dioxide and nitrogen-oxide emissions in 23 Eastern and Midwestern states beginning next year, as well as seasonal ozone reductions in 28 states. Combined these two rules will have a significant impact on the future cost and availability of electrical power in the United States and should be part of a careful and well thought out and communicated environmental and energy plan for the nation.

According to the EPA it will cost $9.6 billion annually to comply with the MATS regulations and Industry analysts believe that 10% to 20% of U.S. coal-fired generating capacity will be shut down by 2016. According to the EPA, the two rules together are estimated to prevent up to 46,000 premature deaths, 540,000 asthma attacks among children, 24,500 emergency room visits and hospital admissions. “The two programs are an investment in public health that will provide a total of up to $380 billion in return to American families in the form of longer, healthier lives and reduced health care costs. “The EPA did not give an estimated combined cost of the two rules; however, the Edison Electric Institute, an industry trade group, claims the combined new rules will cost utilities up to $129 billion and eliminate one-fifth of America's coal electrical generating capacity.

In 2010 coal was used to product 45 % of electricity while oil was used to generate less than 1% of electricity, so the MSTS rule is intended for coal plants. The nation's coal-fired power plants were built as the nation grew and industrialized in the first half of the 20th century when coal was the most abundant and cheapest available fuel. With the existing power plants in place coal is still much cheaper than natural gas for generating electricity, but the tightening of regulations by EPA under the Mercury and Air Toxics Standards and the Cross-State Air Pollution Rule (even with recent modifications) will decrease that financial advantage because coal burns dirtier than natural gas. In addition, the recent availability of shale gas has lowered the cost of natural gas and provided a potentially reliable supply.

These new regulations will require existing plants to meet emission standards that are at least as stringent as the top 12% best-performing coal facilities and may force some plants to convert to natural gas fuel or to shut down entirely. The generating capacity will have to be replaced with new plants that burn cleaner fuels and produce less pollution, but the cost of power will increase. Several state utility commissioners say they fear the agency's recent rules will push up electricity prices or could even hurt electric-system reliability if too many power plants are shut down. That is countered by the EPA who states that less than 1% of the national generating capacity will be lost.
According to EPA there are about 600 power plants covered by these standards. They emit harmful pollutants including mercury, non-mercury metallic toxics, acid gases, and organic air toxics including dioxin.

Our modern society requires power - that is not going to change. The cost of power is a key factor in determining the cost of production, and the cost of living. 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. Coal produced 45 % of electricity, nuclear power generated 20% of the electricity used, natural gas generated 24 % 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, but some fuel will need to be used to spin the turbines. In all probability natural gas will be substituted for coal. There will be economic impacts to the reduction in demand for coal in the United States, the cost to convert, replace and upgrade power plants, and increasing the demand for natural gas.

Natural gas is the cleanest of the fossil fuels. Burning natural gas in the place of coal emits fewer harmful pollutants, but methane, the principle component of natural gas, is itself a potent greenhouse gas. Methane has an ability to trap heat almost 21 times more effectively than carbon dioxide. This past year researchers at Carnegie Mellon University compared greenhouse gas emissions from the Marcellus Shale region with emissions from coal used for electricity generation. The authors found that natural gas from the Marcellus shale had lower life cycle greenhouse gas emissions than coal for production of electricity by 20–50% depending upon plant efficiencies and natural gas emissions variability. Shale sourced natural gas could provide a reliable source of natural gas for our nation in this century and might make the conversion of some power generation worthwhile. However, before we push a significant portion of our electrical generating capacity from coal to natural gas, we should ensure that we will have the natural gas supplies available at the time and location that it is needed to produce a reliable electrical grid.

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