Martin Schneider
GHG Monitor
4/4/2014
Environmental Protection Agency Administrator Gina McCarthy’s appearance before House lawmakers this week took on familiar refrains, with Republicans repeatedly pressing McCarthy on the agency’s New Source Performance Standards that essentially mandate carbon capture for any new coal-fired power plant as well as on the agency’s plans for new regulations for existing plants. “EPA continues to regulate too much, too fast. No wonder so many job- creating companies are holding back on new investment,” said Rep. Fred Upton (R-Mich.), chair of the House Energy and Commerce Committee, at an April 2 joint hearing of the House Energy and Power Subcommittee and Environment and the Economy Subcommittee. “They not only face rising energy and compliance costs, but also uncertainty as to what those new regs are going to require. The worst of EPA’s regulatory agenda may be yet to come, especially with the greenhouse gas regs for power plants. We have yet to see fully what EPA plans to propose for these existing … power plants, or the full impact on consumers’ electric bills and unemployment. But if we allow that agenda to continue without proper oversight, we may well see higher costs, more jobs lost and widespread problems.”
The question of whether CCS technology has been adequately demonstrated and the requirements in the 2005 Energy Policy Act addressing EPA’s reliance on demonstration projects as the basis for the standards were a key focus of the hearing, with Republicans asserting that EPA was not following the law in its approach to the NSPS and McCarthy strongly defending the agency’s actions.
The New Source Performance Standards rule will set separate CO2 emissions standards for coal and gas units and provides incentives for plant developers to install carbon capture and storage technology. Depending on whether plant operators decide to measure CO2 emissions over a 12- or 84-month operating period, individual coal units would have to cap emissions at between 1,000 and 1,100 lbs CO2/MWh and gas-fired turbines, depending on their size, must also meet a CO2 emissions limit of between 1,000 and 1,100 lbs MWh over a 12 month period. The rule also identifies the “partial” capture and storage of roughly 30 to 50 percent of a plant’s emissions as the “best system of emission reduction” technology for coal plants.
Whitfield: CCS ‘So Far Off’
Rep. Ed Whitfield (R-Ky.), the chairman of the Energy subcommittee, questioned McCarthy on EPA’s reliance on CCS projects that were not yet in operation and had received federal R&D funding as the basis for the NSPS. “Under your new source performance standards for new electric utility generating units, you specifically set the emission standards based on three plants in the United States—one in Mississippi, one in Texas and one in California,” Whitfield said. “The one in Texas has … not even started construction. The one in California, they have not even started construction. The one in Mississippi is being constructed. It’s not in operation yet. None of them would be built without funding from the federal government and/or tax credits under the Clean Coal Power initiative, and the 2005 Energy Policy Act specifically says … if a facility is receiving funds from the Clean Coal Power initiative you cannot say that it’s been adequately demonstrated.” Likewise, Rep. Joe Barton (R-Texas) told McCarthy: “Now, you are an intelligent woman. I think you’re an honest woman. I think you’re an able administrator. How can in good conscious you allow these new emission standards to be promulgated when they’re based on technology that hasn’t been demonstrated yet and, by law, says you can’t use these emission standards from these demonstration projects because they’re not in commercial operation?”
McCarthy responded that EPA’s interpretation of the Energy Policy Act is that the agency cannot rely “solely on the basis of EPAct-funded projects, but we can look at them in the context of a larger and more robust technical and scientific record. And that’s essentially what we’re doing. We know that CCS has been used and is being used at the commercial scale in other industries, and it has been for many years. The technology is available; each component of that technology has been in use, has been tested and is viable. And so we are looking at these larger projects that are full-scale power plants that are under construction or being developed within the context of that larger and more robust context.” She added, “This proposal actually requires only partial CCS. It’s an ability to move this technology forward and to recognize that it is an opportunity for coal.”
Stating that “CCS is so far off,” Whitfield asserted that “America is being jeopardized by this kind of action” because “those people who are involved in the utility business tell us explicitly that they cannot build a new coal-powered plant.” McCarthy acknowledged the role of coal as a part of the energy mix going forward and emphasized the need for CCS. “I think we’ve indicated many times that this country is relying on coal,” she said. “Coal will be part of the energy mix for decades to come. We know where investment is heading in new coal facilities and all of them that you’re talking about, while some of them have received DOE funding they are all relying on advancing CCS, recognizing that they’re going to be around for decades.”
