Ken Silverstein EnergyBiz Insider Editor-in-Chief

The administration would implement so-called cap-and-trade rules designed to reduce the toxin by 70 percent by 2018. But 14 states are now balking at that rule released in March 2005. They say that by allowing those plants that exceed the limits to sell their "credits" to those that cannot meet the requirements would create "hot spots" hovering over the polluted areas. Utilities, by comparison, say that a free market approach provides flexibility and allows them to avoid "fuel-switching," whereby they would have to run their generators with natural gas -- instead of coal -- that is more expensive.

"The mandatory declining caps, coupled with significant penalties for noncompliance, will ensure that mercury reduction requirements are achieved and sustained in a cost-effective manner," the Environmental Protection Agency says. It adds there is "no reason to believe that there will be utility-attributable hot spots anywhere in the country."

The United States has roughly 1,100 coal-fired power plants that release 48 tons of mercury a year. The so-called Clean Air Mercury Rule will work in two phases: The first will cut mercury emissions to 38 tons per year in 2010 while the second will limit releases to 15 tons a year in 2018. The pollutant is released when coal is burned and flows out of facilities' smoke stacks, then it falls into the ground and water.

The cap-and-trade program is modeled after an existing -- and effective -- one to cut sulfur dioxide. But mercury and sulfur dioxide are fundamentally different. Mercury has a greater potential to fall back to earth, some scientists say, which places prospective "hot spot" communities at risks. Data collected over eight years by Penn State University for the Department of Environmental Protection, for example, show mercury levels 47 percent higher in areas closer to power plants.

"Several independent studies have shown how local efforts to control mercury protect public health, improve air quality and clean the environment," says Pennsylvania Environmental Secretary Kathleen McGinty, who makes a de-facto case against a cap-and-trade system that would give some plants a pass. A Florida Everglades study showed that mercury concentrations found in fish and wading birds there dropped by 60 to 70 percent due to local mercury emission reduction efforts.

Forty-five states have issued advisories warning people to limit their fish consumption because of mercury contamination. Nationwide, more than 10 million lake acres and 400,000 river miles are under mercury advisories. Mercury is particularly insidious because it can be spread globally. The EPA estimates that about 50 percent of the mercury deposits in the United States emanate from local sources while another 40 percent comes from outside the country's borders, mostly Asia.

Effective Technologies

Both policymakers and utilities have been under pressure to do something about mercury. One of the results has been the introduction of new technologies that work to cut most pollutants, including mercury. Modern generators can limit those emissions but the older plants that are far less efficient are the ones with the biggest problems.

That's why the environmental community favors mandatory mercury reductions and forcing utilities to use the latest technologies, which they say can cut as much as 90 percent of all such emissions. WE Energies and the Department of Energy, for example, are involved in a mercury removal program. It began operating in January 2006 and has worked to reduce mercury emissions by 90 percent.

ADA-ES, a Colorado-based company making mercury control equipment, says that WE's success can be replicated. Since July 2005, it has signed nine contracts for the sale of pollution-control technology to be installed on generating units totaling 4,500 megawatts.

Such advances have pushed 21 states to go beyond what the federal government is now doing. Many of those states, that include California, New York and Texas, aim to achieve 90 percent reductions in shorter time frames. Minnesota would cut mercury at the state's largest coal-fired power plants by about 90 percent over the next seven years. The plan, which must be approved by the state legislature and signed by the governor, could take effect by 2010. Georgia, meantime, is considering a proposal to reduce mercury levels by at least 80 percent by 2010.

Connecticut was the first state to try to make significant cuts in mercury. The collaborative effort among industry, environmentalists and lawmakers produced a rule that they say will cut mercury emissions from coal generators by 90 percent by 2008. Some argue that the law is one of convenience, given that coal only makes up 7.5 percent of Connecticut's generation supply.

PSEG Power Connecticut agreed to the law, saying that it recognized the concerns of the community. Along those lines, the measure is not only reasonable and cost effective but it also provides a level of certainty, PSEG says. It adds that the company supports similar efforts at the national level, noting that coal makes up a quarter of all energy produced by the utility everywhere it operates.

But, coal-dependent utilities say that the technologies are not yet commercially available and that the president's flexible approach is best. Take Atlanta-based Southern Co., which operates one of the nation's largest coal-burning fleets: The utility says that it can meet the new federal mercury standards and cut the pollutant by 70 percent. It says that it will take 10 years and cost $6 billion to do so.

"Mercury is a multi-state and regional problem, just like acid rain and ground level ozone pollution, and it should be handled in the same way through a cap and trade program," adds Doug Biden, president of the Electric Power Generation Association.

Even now, the administration's mercury plan is undergoing court challenges. But, unless or until a judge overturns the blueprint, it will remain the law. Clearly, concerns exist over hot spots while many states and environmental activists say that utilities can do better than what the president has proposed.

Until now, however, mercury levels have been unregulated. Further in-fighting would only serve to delay progress. Once the technologies to cut mercury become even more widespread, more aggressive actions can be taken. It's time to ease tensions, and mercury levels.

For far more extensive news on the energy/power visit:  http://www.energycentral.com .

Copyright © 1996-2005 by CyberTech, Inc. All rights reserved.