By John Kemp
LONDON, Sept 23 The U.S. Environmental
Protection Agency's proposed carbon pollution standard for new
coal-fired power plants, published on Friday, is "arbitrary,
capricious (and) an abuse of discretion," under the
Administrative Procedure Act.
The federal courts should toss it out if the agency persists
in adopting the rule in its current form.
On the basis of the evidence presented in the proposed rule,
no rational decision-maker could conclude that partial
implementation of carbon capture and storage (CCS) for new
coal-fired power plants constitutes the best demonstrated system
of emission reduction and should therefore be adopted as the
performance standard for all new coal-fired power plants.
In writing the rule, officials have defied the law, which
requires the Environmental Protection Agency (EPA) to consider
"adequately demonstrated" technology and take cost into account,
to require new coal-fired power plants be equipped with a
technology that has not been shown to be commercially viable
anywhere in the United States.
The agency reaches its decision to require partial capture
of CO2 by an odd route.
The EPA claims "existing and anticipated conditions mean
that few if any solid fossil fuel-fired (power plants) will be
built in the foreseeable future." Any gas-fired ones are likely
to choose technologies that already comply with the standard.
As a result the EPA projects this proposed will result in
"negligible CO2 emission changes, quantified benefits, and costs
by 2022," which means it need not worry too much about the
potential impact on power prices.
That finding is disingenuous. If gas prices rise
significantly, as some analysts think they might, "some
additional new coal-fired generation capacity may be built
beyond 2020" as the EPA acknowledges.
The real benefit, and real cost, of the EPA's proposal is
that it would prevent coal-fired power plants being built unless
they were equipped with partial CCS, whatever happens to gas
prices, significantly reducing the portfolio flexibility of
NO RELEVANT CASES
The EPA claims "nearly all of the coal-fired power plants
that are currently under development are designed to use some
type of CCS."
The EPA switches back and forth between "few if any" and
"nearly all" in a deeply misleading manner: of the tiny number
of coal-fired projects currently being planned, "nearly all" of
those proposed would use CCS.
The EPA then cites four projects that are currently under
construction or development that employ CCS technology. But not
one of them has actually entered service yet and no one knows
how they will perform in practice.
Southern Company's Kemper County Energy Facility,
currently under construction in Kemper County, Mississippi, is
the most advanced. But it is only 75 percent complete and has
run billions of dollars over budget.
SaskPower's Boundary Dam project is under construction. The
Texas Clean Energy Project is at the planning stage. And the
Hydrogen Energy California project is still on the drawing
"Each of these projects has obtained some governmental
financial assistance" the EPA admits. The reason is that CCS is
still far too expensive to compete with other forms of power
GREAT PLAINS SYNFUELS
The EPA highlights the Great Plains Synfuels Facility, part
of the Basin Electric Power Cooperative, in North
Dakota, a giant facility that produces natural gas from lignite,
as an example of a gasification process successfully equipped
with CCS technology.
"The Great Plains Synfuels Facility is a coal gasification
facility that has captured at least 50 percent of its produced
CO2 for use in enhanced oil recovery operations since 2000," the
The Great Plains Synfuels Plant is an engineering
masterpiece. Conceived after the first oil shock, it was the
largest construction project in North America in 1981-82, much
of it built during the coldest winter in 100 years.
It produces natural gas for customers in the Midwest,
supplies carbon dioxide to an enhanced oil recovery project in
Canada, and makes a range of other specialty chemicals.
But the plant required prodigious amounts of federal
assistance. It was loss-making when it opened and had to be
taken over and bailed out by the federal government in 1985.
The official history, superbly told by Stan Stelter in his
monograph on "The New Synfuels Energy Pioneers: A history of the
Dakota Gasification Company and the Great Plains Synfuels Plant"
makes fascinating reading; I cannot recommend it highly enough.
But no one familiar with the plant's history could think it
is a good example of why gasification and CCS is a
cost-effective solution to the problem of emissions reduction.
None of this seems to bother officials at the EPA. Its own
rulemaking establishes there is not a single relevant instance
of CCS being successfully implemented in the United States
without substantial federal financial assistance. Not one
project has been implemented on a commercial basis. And only one
project has as yet actually captured any CO2.
Still the EPA notes laconically: "The projects in
development for new coal-fired generation are few in number, and
most would already meet an emission limit based on
implementation of CCS. As a result, a standard based on partial
CCS would not have a significant impact on nationwide energy
"For example, the Hydrogen Energy California facility plans
to capture approximately 90 percent of the CO2 in the emission
stream," according to a footnote. But planning is not the same
thing as doing, let alone doing profitably.
Necessity is the mother of invention. During national
emergencies such as World War Two, the Cold War and the Space
Race, engineers made enormous technical advances under intense
pressure to find a solution to previously intractable problems.
The EPA's rule seems to rely on a similar approach to
technological forcing: mandate a technology, and hope the
engineers will solve all the problems.
MAKING WAR ON COAL?
Critics accuse the EPA of making war on coal; the rulemaking
suggests they are right.
The EPA contemplated whether new natural gas combined cycle
(NGCC) plants should also be required to implement partial CCS
systems. But "the EPA considered whether NGCC with CCS could be
identified as .. adequately demonstrated for new stationary
combustion turbines, and we decided that it could not."
"At this time, CCS has not been implemented for NGCC units,
and we believe that there is insufficient information to make a
determination regarding the technical feasibility of
implementing CCS in these types of units," the EPA wrote -
without apparent irony.
"The EPA is aware of only one NGCC unit that has implemented
CCS on a portion of its exhaust stream. This contrasts with coal
units where, in addition to demonstration projects, there are
several full-scale projects under construction and a coal
gasification plant (North Dakota) which has been demonstrating
much of the technology ... for more than ten years."
At least for coal, "CCS technology has been adequately
demonstrated, and its implementation costs are reasonable," the
EPA concludes. In fact nothing could be further from the truth.
The EPA is abusing natural language to suggest projects
which have not yet entered into service, some of which are still
on the drawing board, somehow prove the technology is viable and
can be implemented cost effectively.
The Clean Air Act, passed by Congress, requires the EPA to
pay due attention to costs and technical feasibility when it
draws up new standards. In this instance, the agency has
flagrantly ignored those requirements, misconstrued the record,
and proposed a rule that far exceeds the intention of
There may be a very good case for employing CCS technology
to reduce CO2 emissions from coal-fired power plants, but the
EPA has not made it in this proposed rule. Other federal
regulations have been thrown out by the courts for much less.
The EPA has rushed the production of this rule. It should
have waited until more power plants actually had operational CCS
systems before insisting it become mandatory for all new ones.
If the agency insists on pressing ahead regardless, the
federal courts should not hesitate to strike it down as an abuse
of the constrained discretion with which the agency is entrusted
under the Clean Air Act.