EPA head, coal exec air differences on carbon rules

Apr 24 - McClatchy-Tribune Content Agency, LLC - Matthew Tresaugue Houston Chronicle

 

The Environmental Protection Agency's top official tried Thursday to reassure wary power grid operators and electricity producers that a federal plan for reducing climate-altering pollution would not turn out the lights.

"Let me be clear about this," Gina McCarthy, the EPA's administrator, said at the IHS Energy CERAWeek conference. "There is no scenario, standard or compliance strategy I will accept where reliability comes into question."

Her pledge comes amid anxiety over the Obama administration's push to reduce emissions of carbon dioxide from coal-burning power plants sharply while rapidly expanding the use of wind, solar and cleaner-burning natural gas. Some companies and states, including Texas, warn that the proposed regulation would threaten electricity reliability by forcing coal units to retire prematurely.

But McCarthy said the shift within the power sector is inevitable.

The plan "does not seek to swim against the current. It's wind in our sails," she said, pointing out that many companies already have invested billions of dollars to use energy more efficiently while bringing online more gigawatts of zero- or low-carbon sources of electricity. Coal plants are the nation's largest source of greenhouse gas emissions.

"This is some serious investment," she said. "Clearly, you're spending that money increasingly on strategies that reduce carbon, like efficiency or solar, or just on making sure your operations are as up-to-date and high-performing as possible because the economics make sense."

In the next few months, the agency is expected to finalize a rule for reducing carbon dioxide emissions 30 percent from 2005 levels by 2030.

While some companies say the proposed target is achievable, others contend the rules are not feasible in states that rely heavily on coal.

"Why are we working so hard to push ourselves off the cliff?" said Greg Boyce, CEO of St. Louis-based Peabody Energy, the nation's largest coal company by output.

In a blistering attack on the federal plan, he said it would "hurt people and cripple economies for negligible environmental benefit."

McCarthy said coal would remain one of the nation's leading sources of electricity, providing about 30 percent of projected capacity in 2030. At the same time, the new rule would encourage companies to modernize plants, improve efficiency and generate more power from sources cleaner than coal, such as natural gas and wind, she said.

McCarthy said industry "never fails to meet the standards we set," because its leaders are innovative and work closely with the EPA in developing the rules.

Still, others at CERAWeek said the agency's far-reaching rule will be the most litigated environmental regulation of all time. Several aspects of the plan could face legal challenges, including the disparity of its state-by-state targets for pollution reductions and aggressive pace for compliance.

"The question is, can they write something that stays largely intact?" said Kathleen Barron, a senior vice president at Exelon, a Chicago-based utility that is supportive of the EPA's plan.

Several states and coal companies already have asked a federal court to block the regulation before it's finalized, asserting that the EPA does not have the authority to regulate coal plants' carbon pollution. Two of the three judges sounded skeptical of the argument when parties presented it last week before the U.S. Court of Appeals for the District of Columbia Circuit.

McCarthy said she is confident that the rule has no "constitutional defect."

Texas, which is not part of the suit, has said it's being required unfairly to make deeper cuts than other heavily polluting states because it's already moving toward the EPA's goals through the use of natural gas and wind. In assigning the reductions, the agency says it took into account what each state could achieve without causing economic harm.

Thirteen states and the District of Columbia are backing the EPA's plan.

"The baseline issue is a hard one," Barron said during a conference panel on the EPA's plan. "They want states to go from where they are now to somewhere much better."

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