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Shale Gas Dethrones King Coal


The EPA unfurled a new rule last Friday limiting emissions at new American coal plants to just 60 percent of what they currently spout. E&E News reports:

The rule would limit new coal plants to emitting 1,100 pounds of CO2 per megawatt-hour. A typical coal plant today emits 1,800 pounds of CO2 per MWh. New gas plants that use combined-cycle technology would be limited to 1,000 pounds of CO2 per MWh, which is close to the 1,135 pounds per MWh that gas plants emit on average today.

To get emissions down to acceptable levels, new coal plants will have to implement expensive carbon capture and storage (CCS) systems. These systems, which pull carbon dioxide out of the air and sequester it underground, still have a long way to go before they can be implemented at cost-effective levels. Just last week, cost overruns forced Norway to shutter a marquee CCS plant that it had once hailed as an achievement on par with the moon landing.

Though the administration didn’t go so far as to limit emissions on existing plants, the limits and the costs the new rule will entail will essentially halt new coal plant production. Howard Herzog, a senior research engineer with the Massachusetts Institute of Technology’s Energy Initiative, told E&E News that “unless you see a really big spike in gas prices, you see gas plants being built and no coal plants.”

Greens, of course, are happy about this, especially given the fact that roughly a third of all US emissions come from power plants. Coal pollutes the air (something China knows all too well) and emits twice as much carbon dioxide as natural gas. President Obama already outlined plans to halt financing of new coal plants overseas in a speech earlier this summer, and the World Bank followed suit with a similar pledge a month later.

But let’s give credit where credit is due: this new rule wouldn’t be possible with fracking and the glut of shale gas America is currently enjoying. We can only afford to be choosy about where we’re getting our energy because we have multiple cost-effective options. Natural gas burns a lot cleaner, and it’s dirt-cheap. Shale gas is green, and the EPA’s new ruling on coal might be natural gas’s biggest eco-victory yet.

[A bulldozer moves coal at Foresight Energy LLC’s Shay coal mine in Carlinville, Illinois, U.S. Photo courtesy of Getty Images]

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  • DirtyJobsGuy

    Be careful here, the EPA rule may trap existing plants as well. For years the power industry and EPA played this game over maintenance and upgrades. For several pollutants, existing plants were grandfathered (i.e. only new plants had to implement the latest requirements). Older plants were permitted to run but could not modernize or otherwise increase output without triggering the new rules. EPA was always sniffing around for violations to exploit. If you cleaned something and the plant improved efficiency you made more power (without burning more fuel), but EPA called this an upgrade. You would then be liable for millions in upgrades.

    The EPA crowd doesn’t like any fossil fuel. The best thing to do now is to replace the current single administrator of the EPA with something like the NRC with a politically balanced commission. Less room for fancy political games.

    • SLEcoman

      Excellent point. It all started when EPA decided that a repair counted as a physical change that increased emissions, and the 1977 Clean Air Act Amendments said that any physical change that increased emissions was a modification subject to New Source Review. EPA concluded at the time obviously Congress didn’t expect EPA to have to approve or review every repair of an existing stationary source, so EPA created the routine maintenance, repair, or replacement (RMRR) exemption to NSR. In 1999, with no prior notice, EPA announced that it had changed the definition of routine from routine for the industry and equipment to routine for that particular stationary source. This allowed EPA to bring action against various power producers for replacing tubes in their boilers, and later for replacing condenser tubes. Since virtually any stationary source that uses a boiler or using cooling water has replaced either boiler and/or condenser tubes, virtually all stationary sources are in violation of the EPA’s interpretation of NSR. For electric generating units (EGUs) that means virtually all existing EGUs could be declared has having been modified and then be required to meet EPA’s new CO2 New Source Performance Standard (NSPS).

  • Loader2000

    In a democracy, one way or another, in spite of special interests, people get what they want most, even if they sometimes don’t like the consequences of it after they get it. What most people want most, regarding energy and CO2 production, are moderate to cheap energy prices and cuts in CO2 emissions that won’t cost very much. This will continue to be the case until temperature catastrophe knocks at their door and comes into the house (if it comes at all). Even then, there is a good chance that people will prefer simply altering their patterns of who grows what, where, and where do they live, rather than deal with super high energy prices. Incidentally, higher temperatures are not an environmental problem, they are mostly a human food production problem. Historically, in the geological record, higher temperatures have been correlated with greater continental rainfall and more species diversity, at least in the long run.

  • crabtown

    “Prices will necessarily skyrocket.”
    So how long before we see stories of the elderly freezing because they can’t afford to heat their homes?

  • SLEcoman

    According to the EIA’s September Electric Power Monthly (contains July data), average delivered cost of natural gas was 86% HIGHER than the delivered cost of coal to power plants ($4.42/MMBtu vs. $2.38/MMBtu). Not surprisingly, YTD thru July, natural gas fired power generation is DOWN 13.9% and coal fired generation is UP 13.4% vs. the same period in 2012.

    And remember that typically natural gas prices are higher in winter than in summer, while coal prices show little seasonal variation.

    So can you at least be intellectually honest and point out that even with the shale gas revolution, coal fired generation beats on natural gas fired generation on an operating basis?

    If you want to talk about total cost of power generation, which do you think is lower, operating a paid off coal-fired power plant with much lower operating costs or a new natural gas fired power plant that will have significant capital recovery costs as well as higher operating costs?

  • Milton Recht

    Of course, the EPA does not do a complete analysis. The decrease future demand for coal in the US from fewer new coal plants and increased costs in existing coal plants, which will increase electricity prices and lower power demand from these plants, will lower the price of coal. Coal has other uses besides electricity production and coal will be used more in those areas. The extra CO2 produced in those non-electricity producing areas may or may not produce more CO2 than coal electricity production. Likewise, production and installation of carbon capture equipment in coal plants produces greenhouse gases. Decommissioning of existing coal power plants and building of gas-powered power plants also produces greenhouse gases.

    Plus, one has to anticipate how individuals are likely to react to an increase in electricity prices. Some alternatives, such as using wood burning fireplaces for warmth instead of electric heating might be worse than letting the power plants continue without carbon capture.

    Additionally, utility regulators allow price increases for capital improvements and new plants will be on the books for a higher cost than older plants and will increase the consumer’s cost of electricity. A higher electricity cost lowers the amount use and can have negative effects if things like air-conditioning use declines during heat waves,
    which will increase illness and mortality for the elderly and those with respiratory problems. The increase in medical costs and value for increase deaths should also be factored into the value equation of mandating carbon

    Increase electricity costs will also decrease the value of switching to electric vehicles and fewer will be sold and more gasoline-powered cars will remain on the roads.

    Unless EPA looks at the totality of all effects from mandating carbon capture, there is uncertainty as whether there is an overall benefit to the mandate and whether there will be an actual overall decline in CO2 equivalent greenhouse gas production.

    • SLEcoman

      Good point. The biggest issue probably will be US manufacturing jobs leaving the US for other economies (e.g. India, China, etc.) that have lower power costs (and much higher carbon intensity) than the US. Thus, it is highly likely that the regulation intended to reduce global CO2 emissions will have the perverse impact of increasing global CO2 emissions. In 1980 the US had 34 operating aluminum smelters, now we have 7 with at least 2 of the 7 likely to close, and electricity cost has been either the primary or sole factor driving these smelters to close. And where has been the biggest growth in aluminum production? In China which produces 80% of its power from coal.

  • SLEcoman

    “coal pollutes the air” what an over simplification! One could say coal-fired power plants without modern pollution controls pollute the air. But how about in the US? When have we reduced emissions enough? The EPA is now requiring new coal-fired electric generating units (EGUs) in reduce mercury emissions even though:
    1. mercury emissions from US coal-fired EGUs represent <3% of mercury deposition in the US;
    2. mercury concentrations in the stack gases of coal-fired EGUs are only 5-13 parts per BILLION;
    3. Compliance with mercury removal requirements cannot be assured because compliance mercury concentration levels are below the levels of detectability;
    4. There is no correlation between mercury deposition rates in the US and the location of coal-fired power plants;
    5. Seychelles Islanders have mercury blood concentrations 10-15 times higher than the EPA's maximum limit, and there are no signs of mercury induced health problems among Seychelles Islanders;
    6. One volcanic eruption like Mt. Saint Helens can easily emit more mercury than all US coal-fired EGUs put together.

  • SLEcoman

    In reporting on EPA’s new CO2 New Source Performance Standards (NSPS) for electric generating units (EGUs), where is the outrage that the EPA is violating the Clean Air Act (CAA) in promulgating this rule? The CAA requires that NSPS must only require the use commercially proven technology. Yet, when Administrator McCarthy cited four examples of the use of carbon capture and sequester (CCS) technology, only one facility is operating and it is not an EGU (Great Plains Gasification), and the other three examples are EGUs that are yet operating commercially.

    Moreover, even if CCS was commercially proven, it couldn’t be deployed nationally because the EPA hasn’t issued regulations on how to get a permit to inject CO2, except where CO2 can be used for enhanced oil recovery (EOR). And even if CCS is used for EOR, it may not be possible to use it in the US. The one example Administrator McCarthy cited that is actually operating, Great Plains Gasification, sells its CO2 to oil producers in Saskatchewan due to regulatory problems with using CO2 for EOR in North Dakota.

    I guess the rule of law does not apply at Via Media when it involves something that WRM doesn’t like, such as coal-fired power plants .

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