New fossil-fueled electric generation plants will have to meet strict emissions standards for carbon dioxide under a proposed rule announced Friday by the Environmental Protection Agency.
The limits on carbon dioxide emissions apply to new coal and natural gas-fired plants. But they will have a greater effect on coal units, which emit almost twice as much carbon dioxide as natural gas units.
The proposed rule is unlikely to affect Oklahoma in the near future, since the state's two largest electric utilities have no current plans to build coal plants. Those plans are in line with the broader utility industry, which is moving toward natural gas for new power plants.
Oklahoma Gas and Electric Co. wants to put off building a new power plant until at least 2020, and has said any new plant would be powered by natural gas. Public Service Co. of Oklahoma plans to phase out its last two coal units in Oklahoma by 2026 and replace the generation with natural gas.
PSO spokesman Stan Whiteford said the utility could be affected by the proposed rule when it decommissions its last coal unit at Northeastern Station near Oologah by 2026.
“These new carbon dioxide limits could very well have an impact on our decision on new generation at that time,” Whiteford said. “Of course, by then, there could be additional advancements in the technology to handle emissions.”
Oklahoma Municipal Power Authority, which plans a new natural gas-fired plant near Ponca City, is studying the EPA's proposed rules, said spokesman Drake Rice. At first glance, it doesn't appear the proposed limits will affect the authority's new natural gas plant, he said. Construction is expected to start in the spring.
Spokesmen for OG&E and PSO said their companies are reviewing the proposed rules for new power plants to see if they might hold clues to another round of regulations by the EPA. The agency is expected to propose rules on carbon dioxide emissions from existing fossil-fueled electric plants by June 2014.
Limits on new plants
The proposed rule on carbon dioxide emissions from new plants calls for limits of between 1,000 and 1,100 pounds of carbon dioxide per megawatt hour of generation. Utilities can choose several options for determining how they will account for the emissions depending on the fuel type.
“These standards will also spark the innovation we need to build the next generation of power plants, helping grow a more sustainable clean energy economy,” EPA Administrator Gina McCarthy said in a statement.
Most new natural gas plants will be able to meet the proposed carbon dioxide limits, EPA said. A typical coal unit without any emissions-capture technology emits about 1,800 pounds of carbon dioxide per megawatt hour.
The agency said new coal plants could meet the standards in a cost-effective way with existing technology, a point disputed by critics who said the carbon-capture and storage methods suggested by the agency haven't been proven on a commercial scale.
In a statement, Sierra Club Executive Director Michael Brune said the proposed rules showed the Obama administration was serious about fighting pollution.
“Each year, more and more Americans are threatened by extreme weather events brought on by carbon pollution,” Brune said. “And up until now, there have been no national standards for the amount of carbon pollution power plants can dump into our air. Big polluters have been getting a free ride for decades, while Americans foot the bill in the form of asthma attacks, respiratory illness, floods, wildfires and superstorms.”
Oklahoma Sen. Jim Inhofe, R-Tulsa, a frequent critic of the EPA and a climate-change skeptic, said the rules will have little effect on a global basis. He said they will harm the economy and raise consumer prices.
“The middle class will be the ones who suffer from these regulations,” Inhofe said. “Jobs in our energy sector will begin to disappear; businesses will find it cheaper to operate overseas; and the price to warm a home in the winter or cool in the summer will skyrocket.”
Oklahoma Attorney General Scott Pruitt, who is fighting several lawsuits against the EPA, said his office is reviewing the potential effects of the proposed rule on Oklahoma's power producers and consumers.
The U.S. Supreme Court ruled in 2007 that EPA had the authority to regulate carbon dioxide emissions as a pollutant under the Clean Air Act. Carbon dioxide makes up 84 percent of greenhouse gases emitted from all sources in the United States. Other greenhouse gases include nitrous oxide, methane and various fluorinated gases.
At a glance
Power shifting to natural gas, wind, sunshine
NEW YORK — Tough new limits on the amount of heat-trapping emissions new power plants can emit will likely accelerate a shift away from coal-fired power and toward electricity generated with natural gas, wind, and sunshine.
Power prices for homes, businesses and factories may eventually rise, and nuclear power could return to fashion.
The rule proposed by the Obama administration Friday will have little effect on the mix of power sources and electricity prices anytime soon because it only applies to new power plants and is likely to be challenged in court. Even so, market forces are already reshaping power markets in the same way the rule will. A boom in natural gas production in the U.S. has dramatically increased supplies, sent prices plummeting and prompted a shift away from coal.
The rule requires new coal plants to be built with extremely expensive equipment to reduce carbon dioxide emissions. That will make coal look prohibitively expensive to regulators and utilities planning for the future. By comparison, natural gas-fired plants, which emit half as much carbon dioxide as coal plants, along with wind turbines and solar panels, will look like a bargain.
Jason Bordoff, director of Columbia University's Center on Global Energy Policy, called the rule “consistent with already evolving market trends toward the use of natural gas instead of coal” and described it as “cost-effective.”
Nonetheless, it creates financial winners and losers as the energy landscape changes for companies and customers.