The Obama administration on Friday set the first-ever limits on greenhouse gas emissions from power plants, but their impact could be minimal because they don’t apply to existing plants and there are few coal-fired power plants being built in the United States.
Just two new coal-fired power plants are expected to open next year, according to data from the Energy Information Administration, and there are none set to open in 2015.
“As you look at current projections this rule won’t in itself get much in the way of reductions,” said Kevin Kennedy, who directs the U.S. Climate Initiative at the World Resources Institute, a think tank that focuses on the environment and economic development.
However, Kennedy said, the rule does send a signal that the Obama administration promises to deal with planet-warming carbon emissions. The real test will come next year when the Environmental Protection Agency puts out its greenhouse gas standards for existing power plants.
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EPA put forth the limits for future power plants as a first step in President Barack Obama’s promise to tackle climate change. The rule would require new coal-fired power plants to install costly technology to capture carbon and store it underground. The EPA standard would require future coal plants to generally meet a limit of 1,100 pounds of carbon dioxide emissions per megawatt hour. They currently emit an average of more than 1,700 pounds per megawatt hour.
The American Coalition for Clean Coal Electricity, a coal industry trade group, called the rule an effective ban on the construction of future coal-fired power plants.
“The president’s decision today is an escalation of the war on coal, and what that really means for Kentucky families is an escalation of his war on jobs and the Kentucky economy,” said Senate Minority Leader Mitch McConnell, a Kentucky Republican.
EPA administrator Gina McCarthy said the technology exists to capture and store the carbon, and the Department of Energy has billions in grants to help make it work.
“I believe this proposal, rather than killing the future of coal, actually sets a certain pathway forward for coal to be a part of the diverse energy mix in this country,” she said.
The future of coal in the U.S. is in question regardless of the EPA rule. America’s natural gas revolution has produced cheap and plentiful supplies that compete with coal in the electrical generation market.
That’s combined with environmental rules to push coal from the domestic market, leading U.S. companies to look at increasing exports to China and India, where coal remains popular.
The coal industry hopes, though, that interest in U.S. coal plants could return if the price of natural gas rises in the future.
The industry is expected to mount a legal challenge to the EPA rule on new power plants, which will be finalized after a public comment period.
The EPA’s rule takes away the industry’s flexibility to deal with changing market conditions like a rise in natural gas prices, said Scott Segal, a lobbyist who represents coal-burning utilities and other energy firms.
But Segal said the rule for future power plants is just the appetizer.
The main course will be the upcoming standards for existing power plants, he said.
Environmental groups are getting ready to wage that fight.
“We must rein in the unlimited carbon pollution belching out of the nation’s existing electric power plants, those that are driving climate chaos today,” said Natural Resources Defense Council President Frances Beinecke.
Coal still accounts for 37 percent of U.S. electricity generation, although its share has dwindled from 50 percent just a few years ago, and natural gas is catching up.
McCarthy said the rules for existing power plants will come by June 2014.
Developing those rules will require the EPA to work with the states rather than set an across-the-board limit on greenhouse gas emissions.
McCarthy said not to expect carbon capture and storage to be used to curb emissions from existing power plants.
EPA is going to have to be flexible on those, she said, and account for the differences among the states.
McCarthy said EPA is starting talks now the state and local governments on how to deal with existing plants.