The Obama administration’s final Clean Power Plan—the centerpiece of the president’s strategy to address climate change—includes several changes from a 2014 draft, to make it easier for states to comply and still reduce carbon emissions, supporters say.
But many construction companies and groups associated with the industry, from cement and steel producers to construction unions, worry that the regulation will cost jobs and boost the cost of electricity.
Several states vehemently opposed to what they call the U.S. Environmental Protection Agency's "war on coal" say they will file lawsuits to have the regulation struck down. If successful, the legal challenges could delay or even prevent the regulation from going into effect for years.
The final regulation, released on Aug. 3, will cut U.S. carbon pollution from the power sector by 870 millions tons, or 32% below 2005 levels, in 2030, according to EPA.
Environmental groups and their Democratic allies in Congress strongly support the rule.
Opponents contend that new rule essentially will hobble construction of new coal plants, lead to early shuttering of existing ones and raise electricity bills. Moreover, they say, the EPA is on shaky legal ground in requiring states to develop plans to reduce carbon dioxide (CO2) emissions.
Former EPA Air office chief Jeff Holmstead said in a statement that “EPA just doesn’t have authority under the Clean Air Act to require states to restructure their whole electricity systems... I don’t think it will pass muster in court.”
Nevertheless, Bob Perciasepe, president of the non-profit Center for Climate and Energy Solutions (C2ES), told reporters on Aug. 3 that although state officials may publicly oppose the regulations, privately most are “thinking hard” about how to comply with them.
“The legal issues will play out, and they have on every major EPA rule for many, many decades. It’s not like a new thing that there will be litigation on this,” says Perciasepe, a former EPA deputy administrator. However, he added, “We think the best way forward for business and states is just to start to work on the plans.”
David Willliams, Fluor Corp. vice president of sales, power, concurs. “The writing is kind of on the wall,” he says. “Our utility customers seem to be waiting on the sidelines waiting to see what the states are going to do."
Wiliams adds, "Once the dust settles on these lawsuits, I think some coal plants will be retrofit [with carbon capture and sequestration (CCS) technology]; I think more will be shut down, and I think it will be purely economic issues—whatever is cheaper---solar, nuclear, or whatever the options are, or applying some of the technologies to keep these coal plants running.”
Williams says that for decades EPA has been issuing regulations governing various pollutants, including ground-level ozone, acid rain and sulfur dioxide. In each case, he says, EPC contractors have developed ways, such as technologies to control carbon emissions, to help utilities meet the new standards.
The final Clean Power rule makes concessions to states' and industry concerns. For example, it gives states more time to develop plans to reduce CO2 emissions from powerplants. State plans are due to EPA in September 2016, but states that need more time can request extensions of up to two years for final submissions. States also have more time to comply—EPA says interim compliance requirements begin kicking in in 2022 instead of 2020, and emission reductions are phased in on a gradual “glide path” to final targets in 2030.
The final rule also gives states more flexibility in achieving emissions cuts. They may join with each other to exchange credits to achieve overall reductions. In addition, there are more incentives for early credits for renewable and energy-efficiency projects and nuclear projects already under construction can be part of the mix.
Moreover, the rules include a “safety valve” to prevent closing coal plants deemed critical to grid reliability.
Jim Hunter, director of the International Brotherhood of Electrical Workers’ Utility Dept., says that his union is pleased that EPA added more flexibility and included the safety valve provision.
But Hunter adds, “Having a philosophy of more renewables, energy efficiency, all those things are great, but we know that big baseload powerplants are what provide stability for the system.
Hunter says, "Renewables are intermittent…and without having a real strong backbone of coal and nuclear, the reliability of the system becomes in jeopardy.”
He adds that potential renewable-energy jobs won't carry the pay levels of those lost in building coal plants. “The renewable jobs are not the same quality as nuclear and coal jobs—they are usually lower paying, less benefits.”
Coal production in the U.S. has steadily declined in the years since President Obama took office. But not all of that decline is caused by regulation. With the availability of cheap natural gas, the economics of fossil-fuel production have changed, according to the U.S. Energy Information Administration.
The new regulation is certain to play a role in the presidential debates and run-up to the 2016 elections. But C2ES’ Perciasepe says that the die has been cast. “I think that by the time the election takes place, many states will have their plans in place.”