As part of a continuing effort to address climate change, the
United States Environmental Protection Agency ("EPA") has
released a revised proposed rule seeking to significantly reduce
carbon dioxide ("CO2") emissions from all new
coal- and natural gas-fired power plants. The proposed rule,
announced by EPA on September 20, 2013, would establish the first
uniform national limits on the amount of carbon-based emissions
from new power plants.
EPA's proposal replaces an earlier 2012 proposal to regulate
CO2 emissions from electric generating units under the
Clean Air Act. As now proposed, EPA is establishing separate New
Source Performance Standards for coal- and natural gas-fired
electric generating units. Initially, EPA sought a single standard
for new generating units, regardless of whether the units used coal
or natural gas to operate.
Under EPA's revised draft rule, new coal-fired units would need
to meet a limit of either 1,100 pounds of CO2 per
megawatt-hour over a 12-month rolling average operating period or
between 1,000 and 1,050 pounds of CO2 per megawatt-hour
based on an 84-month rolling average operating period. With respect
to either standard, new coal-fired units would be required to
install "partial" carbon capture and sequestration
technology ("CCS"), an emerging technology, as the best
system of emission reduction to lower CO2 emissions. By
requiring partial CCS technology, EPA estimates that new coal-fired
units would emit approximately 30 to 50 percent less CO2
than a coal-fired unit without CCS technology.
With respect to new natural gas-fired units, larger units with a
capacity of at least 850 million Btu's per hour
("mm/Btu/h") would need to meet a limit of 1,000 pounds
of CO2 per megawatt-hour, while smaller units with a
capacity of less than 850 mm/Btu/h would be subject to an emissions
limit of 1,100 pounds of CO2 per megawatt-hour.
According to EPA, the most common type of fossil fuel-fired units
being planned or built is natural gas-fired with combined cycle
technology, which EPA concludes "is an inherently lower
CO2-emitting technology" than a typical new
coal-fired plant of the same size. EPA asserts that no additional
emissions control technology will likely be required for new
natural gas-fired units to meet either limit.
The proposal to regulate carbon dioxide from new power plants is
EPA's first major initiative since President Obama announced
his Climate Action Plan this past June (http://www.whitehouse.gov/sites/default/files/image/president27sclimateactionplan.pdf).
EPA plans to follow its proposed rule on new power plants with a
far-reaching one seeking to establish CO2 performance
standards for existing coal and gas-fired units. In a presidential
memorandum dated June 25, 2013 (http://www.whitehouse.gov/the-press-office/2013/06/25/presidential-memorandum-power-sector-carbon-pollution-standards),
President Obama directed EPA to issue proposed carbon pollution
standards for modified, reconstructed and existing power plants by
June 1, 2014, and to finalize such standards by June 1, 2015.
EPA is accepting comments on the proposed rule setting
CO2 emission standards for new power plants for 60 days
following publication in the Federal Register. EPA will hold
hearings on the proposed rule and has indicated that it plans to
issue a final rule within the next year. This final rule is
expected to face a court challenge.
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