Study of U.S. Power Company Air Emissions Has Good News, Bad News

Study of U.S. Power Company Air Emissions Has Good News, Bad News
Source: GreenBiz.com

WASHINGTON, April 6, 2006 - A new report evaluating air pollution trends among the 100 largest electric power producers in the U.S. shows that emissions of sulfur dioxide (SO2) and nitrogen oxides (NOx) have fallen markedly in recent years, but carbon dioxide (CO2) emissions increased and will likely spike in coming years. Benchmarking Air Emissions of the 100 Largest Electric Power Producers in the United States 2004 (PDF) was released by the Ceres investor coalition, the Natural Resources Defense Council (NRDC) and the Public Service Enterprise Group Inc. (PSEG), one of the electric power generation companies included in the report.

The report, which focused on companies generating 88% of the nation's electricity, found that overall emissions of SO2 and NOx fell by 44% and 36%, respectively, between 1990 and 2004. The drops are largely the result of stricter pollution-control standards enacted in the 1990 Clean Air Act amendments.

Conversely, CO2 emissions rose 27% in the same 14-year period. And the report predicts a bigger increase in the years ahead due to an unprecedented surge of new U.S. coal-plant proposals that would emit substantially more CO2 than other sources generating the same amount of power. There are currently more than 130 new coal plants proposed across the U.S., and the Energy Information Administration (EIA) projects a 66% increase in coal-based power production and a 43% increase in CO2 emissions by 2030. The EIA projection assumes no controls on CO2 emissions at the power plants.

The report comes amid increasing public concern and intensifying pressure for limits on heat-trapping emissions from U.S. power plants and rising investor concern about companies' long-term financial risk from climate change. In the absence of federal regulations, business uncertainty is growing as more U.S. states and regions move to enact their own limits on CO2 emissions from power plants. The U.S. government has opted for voluntary controls on carbon dioxide, but last year the U.S. Senate adopted a resolution calling for mandatory emission limits.

"This report makes clear that SO2 and NOx regulations succeeded in reducing pollution and minimizing financial exposure for companies," said Mindy S. Lubber, president at Ceres and director of the Investor Network on Climate Risk, which is comprised of 50 institutional investors managing nearly $3 trillion in assets. "However, voluntary approaches for curbing greenhouse gas emissions are not working. Instead of reducing pollution, we now have a spate of new coal plants and inevitable greenhouse gas limits on a collision course that puts companies and shareholders at financial risk."

"The report helps us assess our own performance, the performance of competitors, and the industry as a whole in the context of the policies we advocate," added Neil Brown, manager of governmental affairs and external communications at PSEG. "Our view is that our industry can -- and should -- make significant improvements in environmental performance and that this goal can be accomplished in ways that are affordable for energy customers and mitigate risk for energy company investors. PSEG continues to support improved environmental performance by the electric power industry, including a national program of mandatory CO2 controls."

The report analyzes 2004 data submitted to the U.S. Environmental Protection Agency (EPA) and the Energy Information Administration by the nation's 100 largest power companies that collectively operate nearly 2,000 power plants. The report focuses on four power plant pollutants -- mercury, CO2, SO2 and NOx -- which cause or contribute to significant environmental and public health problems, including acid deposition in lakes, streams and forests (SO2, NOx), ground-level ozone, or "smog," a lung and asthma irritant (SO2), regional haze (NOx and SO2) and global warming (CO2). In addition, mercury is a neurotoxin that can collect in tissues of fish and is especially dangerous to pregnant women. The report includes mercury data, based on the Toxics Release Inventory published annual by the EPA.

The study found that a small number of companies produce a relatively large amount of emissions, with three companies alone - American Electric Power, Southern Company and Tennessee Valley Authority - responsible for 24% of the industry's SO2 emissions, 21% of the NOx emissions, 19% of the CO2 emissions and 22% of the mercury emissions.

The report also found wide disparities in emission rates -- the amount of pollution generated for every kilowatt of electricity produced -- reflecting differences in management strategies, fuel mix and pollution control technologies. For example, although American Electric Power produced seven times more electricity than PG&E, the company was responsible for 109 times the CO2 emissions. And Southern Company produced about 58% more electricity than Entergy, but emitted 400% more CO2.

According to the report's sponsors, this kind of comparative analysis is useful for policymakers considering regulatory approaches; public interest organizations concerned about public health and consumer costs; and financial analysts and investors assessing company risk exposure as global warming emission limits in the U.S. gain more momentum.

In addition to the aggregate corporate emissions data for 2004 provided in this report, data for 2003 and specific power plant data for 2003 and 2004 are now available in spreadsheet form at online. To download sortable data tables from this report, please visit NRDC's Web site.