ERCC Remarks on EPA’s Proposed Clean Air Act Standards for Greenhouse Gas (GHG) Emissions from New Power Plants

March 27, 2012

Scott Segal, executive director of the Electric Reliability Coordinating Council (ERCC), made the following remarks regarding the proposal.  ERCC is a coalition of energy companies:

“We have begun the process of reviewing the Administration’s current proposal to establish rules for greenhouse gas (GHG) emissions from power plants.  At first blush, we believe that the proposal is short-sighted and marks a real departure from the Administration’s goal of an ‘all of the above’ energy strategy.  The rule would effectively ban the future of almost half of our current electric portfolio.  Here are some points to consider:

1. The GHG rule must be placed in the context of many other rules – such as the air toxics rule, the visibility rule, and the interstate rule – that have the effect of increasing the price of energy for consumers by double digits in some areas, and have the effect of making industry less competitive and destroying jobs as each plant closes.

2. EPA says that it has no current plans to regulate existing power plants for GHGs.  We have little confidence that the Administration will adhere to this view, particularly after the election is over.

3. The Administration claims that there is a ‘path forward’ for coal in this rule.  However, the path runs through installation of carbon capture and storage (CCS) technology – which makes it treacherous indeed.  CCS technology is still highly speculative, likely expensive, and EPA has provided no assurance that it will help with inevitable permit delays. 

4. EPA says its rule is doing nothing to future coal-fired projects that low market costs for natural gas aren’t already doing.  And yet, if the Administration succeeds with the multiple agency initiatives to regulate hydraulic fracturing and if demand strategies like vehicle use, power production, or chemical production continue to expand, static price assumptions for gas may prove highly unreliable.

5. Many environmentalists have criticized existing coal-fired power plants for failure to keep up with the times, even in light of the billions spent on environmental compliance by the sector.  However, if EPA essentially bans the future for the sector, the incentive to further innovate will decline, and reliance on existing technology may continue.  All of this is at cross purpose with EPA’s stated goals.

6. Last, the alleged statutory purpose of the regulation is to reduce global warming.  However, by banning the future of efficient and effective coal in the United States, coal may instead by exported and used overseas thus eliminating any supposed environmental benefit while retaining tremendous energy cost, job loss, and squandered energy security here at home.