The new carbon pollution rules the Obama administration announced on Monday will help spur the natural gas industry and renewable energy like wind and solar power, but executives and analysts said they did not see the nation’s reliance on coal disappearing anytime soon. The intent of the Environmental Protection Agency proposal — to reduce carbon pollution from the nation’s power plants 30 percent from 2005 levels by 2030 — is to reduce the dependence on coal, which generates roughly 40 percent of the country’s electricity.
For new wind farms installed last year in the Plains, prices reached $21 per megawatt hour (MWh). That’s effectively two cents per kilowatt hour ($0.021/kWh). Furthermore, the price for wind energy is stable and predictable for 20 years, unlike some electricity sources which require continual fuel inputs and are subject to price fluctuations.
“The politics and the energy economics will move in somewhat different directions,” said Cal Jillson, a professor of political science at Southern Methodist University. “And I think the smartest thing to do is to keep an eye on the energy economics rather than on the political histrionics.” Texas is the nation’s largest carbon emitter from sources covered by the EPA proposal, according to federal data. But it’s also the nation’s top wind power producer, and solar power in the state is on an upswing. Last month, a report showed renewable energy production in Texas that is tracked through a credit program climbed about 12 percent in 2013 from a year earlier.
Republicans are crowing this week about Democratic divisions over U.S. EPA’s proposed power plant carbon limits, but within their own ranks is a less-acknowledged split over whether emissions should be dealt with at all. That some in the GOP see greenhouse gases as a real environmental threat is no surprise to close congressional observers. As their party coalesces behind a message of regulatory overreach by EPA and uses the proposed rule as a political cudgel against Democrats, however, Republicans who acknowledge the threat of unchecked emissions are far from any coordinated effort to offer an alternative to the regulation.
The Senate’s top Republican today compared U.S. EPA’s new proposal for existing power plant carbon dioxide emissions to another perennial GOP target — Obamacare. Senate Minority Leader Mitch McConnell (R-Ky.) said that like the controversial 2010 health care law, the utility rule would open the door for Washington, D.C.’s power elite to expand its control over the American middle class, particularly in states like his own where coal-fired power plays a leading role.
The Obama administration uncorked its carbon rule yesterday. Now one major question is whether Congress will try to put it back in the bottle. Lawmakers worked yesterday to put a fingerprint on the historic regulations with their own measures, prompting potentially a flurry of climate-related legislation not seen since the marathon sessions on cap and trade in 2010.
“Every state is going to have to take a look at its own power grid and its own emissions and make a decision as to how it wants to go about complying with these rules,” said Mary Nichols, chairwoman of the California Air Resources Board (ARB), which runs California’s cap-and-trade program. “We are convinced that when they do that, they will look at California’s approach and that it has a lot to offer.”
CONVENTIONAL wisdom, strongly promoted by the natural gas industry, is that natural gas drives down American emissions of carbon dioxide, by substituting for carbon-rich coal. The climate stabilization plan announced by the Obama administration on Monday relies on that. But in other ways, cheap natural gas drives emissions up. “It’s a seesaw,” said Michael W. Yackira, chairman of the Edison Electric Institute, the trade association of the investor-owned electric companies. Some of the factors are hard to quantify, making it uncertain whether, in the long term, natural gas’s net effect is positive for climate control.
Even before yesterday’s announcement, the most contentious issue in this rule has been whether EPA has the authority to regulate beyond an individual power plant and allow states to switch fuel sources, increase renewable energy capacity and push for demand-side efficiency — options two through four. The first building block, in which power plant operators invest in technology to lower the amount of heat lost during operation, is the choice that most resembles traditional standards to improve air quality. But the potential savings are relatively minimal, says EPA’s rule — about 6 percent by 2020. But by using all four blocks, the country could lower emissions by 4 ½ times more.
“A new Washington Post-ABC News poll … shows that a significant majority of Americans from both parties support limits on greenhouse gases from power plants, even if it means higher utility bills. That includes people in coal-producing states including Kentucky, which gets almost all of its electricity from coal.