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Déjà vu: Pushback to U.S. Clean Power Plan Reminiscent of 2011 Mercury Rule

By Susan Tierney,  Managing Principal, Analysis Group, Inc.

This post originally appeared on World Resources Institute's Insights blog.

Did you notice the massive blackout on April 16th, 2015?Reversed-GoldBackground

Actually, I didn’t either. That’s because the electric system didn’t falter. The fact that April 16th came and went without a reliability glitch was both nothing unusual and also a really big deal. Because history has a habit of repeating itself, it’s worth understanding why April 16th was a remarkable (and remarkably dull) milestone in electric-industry history.

The Origins of the Mercury and Air Toxics Standard (MATS)

Back in 2010, just under a third of all U.S. power-plant capacity burned coal to produce electricity. Many of those plants were emitting unhealthy levels of toxic air pollution, which forthcoming regulations from the Environmental Protection Agency (EPA) would limit. Critics of EPA’s rule doubted that manufacturers and installers could get enough pollution-control equipment into the market and on to power plants fast enough to meet the deadline under the new Mercury and Air Toxics Standard (MATS) – and that taking so much of the nation’s generating capacity off line all at once would inevitably lead to an unreliable electric system.

Before the EPA finalized its MATS rule at the end of 2011, countless groups published estimates of how many coal plants would retire due to the EPA regulations. The North American Electric Reliability Corporation (NERC) warned that “with [the mercury rules] as the primary driver, the industry faces considerable operational challenges to complete, coordinate and schedule the necessary environmental retrofits.” Others, including opponents of the rule, argued that, in the name of reliability, the rule would need to be delayed.

In December 2011, EPA issued the final MATS rule, which gave owners of affected power plants until April 16, 2015, to either bring their plants into compliance with the new requirements or cease their operations.

That date passed two weeks ago without incident. The lights didn’t dim.

Why not? First, the EPA stood by its commitment (made in November 2011 by then-Assistant EPA Administrator Gina McCarthy in testimony to the Federal Energy Regulatory Commission, the agency with responsibility for electric system reliability) that “In the 40-year history of the Clean Air Act, EPA rules have never caused the lights to go out, and the lights will not go out in the future as a result of EPA rules.”

Part of the reason for that is that the EPA is nowhere near as rigid or anti-business as many observers like to portray it. The final EPA rule gave power-plant owners the ability to request an additional year of time to comply, and allowed yet another year in unusual cases where continued operation of a plant would be needed for reliability. According to the National Association of Clean Air Agencies, as of March 2015, owners of 38 percent of the 460 coal-fired power plants affected by the MATS rule had requested additional time to comply and, of those, the EPA granted an extension to 95 percent.

Kentucky power plant. Photo by Cindy Cornett Seigle/Flickr

Second, the electric industry is already transitioning to rely less on coal, even without the MATS rule. Between 2011 and the end of 2014, 21.5 gigawatts (GW) of coal-fired power plants retired. The fact that these retirements occurred before the MATS deadline indicates that something other than EPA's regulations is driving the least-efficient and oldest coal plants into retirement.

Coal's ardent supporters may prefer to point the finger at EPA, but the truth is that market conditions are responsible: relatively flat electricity demand, increased supply from power plants using other domestic energy sources (natural gas, wind and solar), and price competition between natural gas and coal. Another 14.6 GW of power plants have retired or will retire in 2015. This total amount of coal-plant retirements (36.1 GW) falls at the mid-point of estimates made during the 2010-2011 period.

Third, the electric industry is dynamic. The market has responded to signals that additional electric resources are needed to replace old ones. Many projects have come forward: new power plants, upgraded transmission facilities, rooftop solar panels, energy-efficiency measures and energy-management systems. These varied responses are the norm, collectively maintaining reliability and modernizing the power system along the way.

That’s why there were no blackouts on April 16th, despite all the dire warnings.

History Repeats Itself

The reliability theme is re-emerging once again, as the states and the electric industry face the prospect of EPA finalizing its “Clean Power Plan” to control carbon pollution from the nation’s power plants. In anticipation of the final rules coming out this summer and of power plant owners having to comply with them by 2020, many observers are saying that the electric system's reliability will be jeopardized if the EPA goes forward as planned. The latest warning came last month with a new assessment published by NERC, calling for more time to allow the industry and the states to respond to the forthcoming carbon-pollution rules.

Such warnings are common whenever there is major change in the industry, and they're not without value: They play an important role in focusing the attention of the industry on taking the steps necessary to ensure reliable electric service.

But warnings lose their value when they are read as more than what they are. Notably, the reliability concerns currently being raised by some observers about EPA’s Clean Power Plan presume inflexible implementation, are based on worst-case scenarios, and assume that policy makers, regulators and market participants will stand on the sidelines until it is too late to act.

There is no historical basis for these assumptions. Reliability issues will be worked out by the dynamic interplay of actions by regulators, entities responsible for reliability, and market participants, all proceeding in parallel to find solutions.

EPA’s proposed carbon-pollution rule provides states and power plant owners with the means to prevent reliability problems by giving them a wide range of compliance options and plenty of operational discretion (including various market-based approaches, other means to allow emissions trading among power plants, and flexibility on deadlines to meet interim targets). And EPA Administrator McCarthy has stated repeatedly that her agency will write a final rule that reflects the importance of a reliable grid and provides the appropriate flexibility.

One of the best ways to assure electric reliability will be for states to actively avail themselves of the Clean Power Plan’s flexibility, rather than “just say no.” States that do not take advantage of this flexibility and then suggest that EPA’s regulations led to unreliable and uneconomic outcomes may be courting a self-fulfilling prophecy. The more states sit in the driver seat and figure out how to arrive at the emissions-reduction destination in a manner consistent with their goals and preferences, the more likely it is that they’ll accomplish them.

Posted in Clean Power Plan, Energy, Greenhouse Gas Emissions, Health| Comments are closed

Three Climate Leadership Openings Corporate America Can't Afford to Miss

By Ben Ratner, Senior Manager, Corporate Partnerships Program

Too much ink has been spilled on the anti-climate furor of the Koch brothers. If we lose on climate, it won’t be because of the Koch brothers or those like them.

It will be because too many potential climate champions from the business community stood quietly on the sidelines at a time when America has attractive policy opportunities to drive down economy-endangering greenhouse gas emissions.

Corporate executives have the savvy to understand the climate change problem and opportunity. They have the incentive to tackle it through smart policy, and the clout to influence politicians and policy makers. Perhaps most importantly, they can inspire each other.

And today, they have a chance to do what they do best: lead. Corporate climate leadership has nothing to do with partisanship – it’s ultimately about business acumen.

For starters, here are three immediate opportunities smart companies won’t want to miss.

1. Clean Power Plan: Will spur new jobs and investments.

The Obama administration’s plan will cut emissions from coal plants by 30 percent by 2030. This is expected to trigger a wave of clean energy investment and job creation. It will also seize energy efficiency opportunities and take advantage of America’s abundant and economic supply of natural gas.

Every company with an energy-related greenhouse gas footprint has something to gain from a cleaner power mix. Each one of those companies therefore has a stake in theClean Power Plan.

Google and Starbucks – two large and profitable American companies by any standard – are among more than 200 businesses that have already stepped up to voice their support.

Who will follow them?

2. First-ever methane rules: Will make industry more efficient.

The U.S. Environmental Protection Agency’s upcoming methane emission rules are another opportunity for business leaders to weigh in.

The rules are part of a White House plan that seeks to reducemethane emissions – a major contributor to global warming and resource waste – by almost half in the oil and gas industry.

Globally, an estimated 3.6 billion cubic feet of natural gas leaks from the sector each year. This wasted resource would be worth about $30 billion in new revenue if sold on the energy market.

Some oil and gas companies that have already taken positive steps include Anadarko, Noble and Encana, which helped develop the nation’s first sensible methane rules in Colorado.

Engaging to support strong and sensible national standards isa good next step for companies in this space. And for others with a stake in cleaning up natural gas, such as chemical companies, and manufacturers and users of natural gas vehicles.

3. New truck standards: Can help companies cut expenses and emissions.

New clean truck standards are scheduled for release this summer. Consumer goods companies and other manufacturers stand to see significant dollar and emissionsavings as they move their goods to market.

Cummins, Wabash, Fed Ex, Con-Way, Eaton and Waste Management are among those that applauded the decision to move forward with new standards.

Putting capitalism to work

American business leadership is still the global standard and will remain so if it adds climate policy to its to-do list. While it will take time to build the bi-partisan momentum for comprehensive national climate legislation, there are immediate opportunities to move the needle.

Which companies will take the field?

Image source: Flickr/Don McCullough

This post originally appeared on our EDF Voices blog.

Posted in Clean Power Plan, Economics, Energy, Greenhouse Gas Emissions| Comments are closed

Ozone Pollution in the West: The Good, the Bad, and the Ugly

Source: Wikipedia

By Jon Goldstein, Senior Policy Manager, US Climate and Energy Program

Long familiar in major urban areas, smog – what we experts call “ground-level ozone” pollution – is quickly becoming a serious problem in the rural mountain west, thanks to rapid expansion in oil and gas development. Smog serious health impacts like aggravated asthma, chronic bronchitis, heart attacks, and even premature death. In areas like the Upper Green River Basin in Wyoming, smog levels have sometimes rivaled those in Los Angeles.

Now, the Environmental Protection Agency and several western states are putting the pieces in place to fix this problem: EPA through proposed revisions to  the health-based ozone standard that will better protect people from pollution, and states like Wyoming and Colorado through strong policies that are helping to reduce the sources of ozone pollution in the oil and gas industry.

In official public comments filed this week with EPA, EDF and a broad coalition of western environmental and conservation groups supported a more protective ozone standard and pointed out the importance of this issue to the intermountain west–where most of the country’s oil and gas production from federal lands occurs.

Ozone is a story with important public health consequences that calls to mind the old Western, “The Good, the Bad and the Ugly,” though perhaps in a slightly different order.

The Bad:

Ozone is a harmful air pollutant, and bad news from a health perspective. Countless studies (including those in the mountain west) have shown that elevated levels of ozone pollution can cause painful breathing, lung inflammation, and are associated with increased hospital admissions and emergency room visits. EPA’s independent expert science panel, on the basis of the latest scientific evidence, unanimously recommended a stronger federal ozone limit to protect public health with an adequate margin of safety, as the law requires.

Strong ozone standards are just as necessary today in intermountain west – where many residents are living amidst large-scale oil and gas developments – as in urban settings. That’s why our comments urge EPA to revise the existing federal ozone pollution standard of 75 parts per billion (ppb) to a more protective 60 ppb.

The Ugly:

As drilling has rapidly increased in areas like Wyoming’s Upper Green River Basin, Utah’s Uinta Basin, the San Juan Basin in New Mexico and in suburban areas of Denver, Colorado so too have harmful ozone levels. In all, as many as thirty-three counties currently in attainment across the Intermountain West have experienced ozone levels above the range recommended by EPA’s Clean Air Scientific Advisory Committee. Of these 33 counties, 17 (52%) are home to oil and gas development.6 Specifically:

  • Wyoming: Fremont, Laramie, Teton, Uinta, Campbell, Carbon counties;
  • Colorado: El Paso, La Plata, Montezuma, Mesa, Rio Blanco and Garfield counties;
  • Utah: Weber, Utah, Tooele, Washington, Box Elder, Carbon, San Juan, Salt Lake, Davis, Duchesne, and Cache counties;
  • New Mexico: Dona Ana, Bernalillo, Eddy, San Juan, Valencia, Luna, Lea, Santa Fe, Grant, and Sandoval counties.

To be clear, the latest available science and EPA’s independent scientific advisors along with the nation’s leading public health and medical societies all suggest a stronger standard is needed to protect public health; this is not a problem of EPA’s making. Citizens in these counties already face exposure to potentially unhealthy levels of ozone pollution.  The only thing that’s changing is that EPA is acting, consistent with its responsibilities under the nation’s clean air laws, to strengthen those standards so they reflect latest scientific information and can provide people with transparent information about air quality in their communities.

Without additional commonsense air quality measures, growing oil and gas development expected in the mountain west could only compound this problem. In Wyoming, for instance, there are plans for as many as 34,246 new oil and gas wells across the state, some in locations that impact existing ozone nonattainment areas, and some that may cause future compliance concerns.

The Good:

Fortunately, it’s not too late to fix the problem. Several states have already enacted or are finalizing emissions reduction requirements on pollution from the oil and gas industry that will bring about substantial reductions in emissions and help to reduce ozone pollution:

  • Colorado’s nationally-leading rules that substantially reduce emissions of methane and volatile organic compounds from oil and gas production.
  • Wyoming’s recently instituted requirements to reduce pollution from new and modified oil and gas sources in the Upper Green River Basin through regular, mandatory leak detection inspections. A statewide approach is needed to better target new problem areas, but the state deserves praise for a proposal to extend these strong requirements to existing pollution sources in the basin as well.
  • Utah has made some positive steps, in particular, by requiring that devices known as pneumatic controllers used by the oil and gas industry be retrofitted with lower emitting models.

Coupled with recently announced plans for a federal methane rule from EPA and rule to minimize waste from the Bureau of Land Management, these state requirements will have positive impacts for air quality. Moreover, policies that keep methane – the main ingredient in natural gas – out of the air and in the pipeline benefit not only the environment, but also the industry (through additional gas sales) as well as the beneficiaries of the royalties paid on a resource that’s no longer being wasted.

Better standards are needed to protect us all from ozone pollution, but luckily, sensible controls on the major sources of this pollution in the western US are there for the taking. As states in the region and federal regulators continue to lead toward better pollution reduction rules, this can be one Western with a happy ending.

This post originally appeared on our Energy Exchange blog.

Posted in Energy, Health, News, Policy| Comments are closed

Illinois Legislators Pledge Support for EPA’s Proposed Carbon Regulations

By Dick Munson, Director, Midwest Clean Energy, Environmental Defense Fund

While the Environmental Protection Agency (EPA) sorts through the more than 1.6 million comments received on its proposed Clean Power Plan (CPP), one group is stepping out to pledge its support of the landmark proposal. 53 Illinois legislators recently signed a letter urging the EPA to finalize the plan, which will set limits on carbon pollution from existing power plants for the first time ever.

Power plants currently account for nearly 40 percent of the nation’s carbon pollution and Illinois’s proposed target would result in a 33 percent reduction in the state’s carbon output by 2030. Fortunately, due to impressive state efforts to invest in clean energy over the past few years, Illinois is well-positioned to meet the challenge.

CPP is an economic opportunity

The Illinois legislators argue the CPP will help the state “achieve even greater cuts in our emissions, health benefits for all our citizens, and will spur further growth in our state’s economy.” The CPP will further the state’s transition to a clean energy economy by attracting investment in innovation, creating more jobs, and keeping electricity prices affordable.

Illinois is already home to nearly 100,000 clean energy jobs, and that number is expected to grow nine percent this year. To put that into perspective, the clean energy sector is roughly equal to the size of the state’s real estate and accounting industries combined.

Furthermore, the state’s energy efficiency standard, established in 2008, has already saved consumers nearly a billion dollars.

Illinois supports the EPA, clean energy

These members of the General Assembly said the EPA has both the clear authority as well as the responsibility to reduce greenhouse-gas emissions that contribute to global warming. Unlike some states that have reacted to the plan with the-sky-is-falling predictions, Illinois state leaders “pledge to work with both U.S. EPA and Illinois EPA to ensure we have a strong plan that works for Illinois to reduce carbon emissions.”

This kind of support is a clear choice for Illinoisans; clean energy is popular in the Land of Lincoln. Hart Research found a whopping majority of Illinois voters – 71 percent – support EPA enforcing new limits on carbon pollution. A separate poll by Fairbank, Maslin, Maullin, Metz & Associates (FM3), and Public Opinion Strategies found remarkable support for investing in clean energy: 95 percent for energy efficiency, 88 percent for wind energy, and 80 percent for solar energy.

To thank the legislators for their leadership, a coalition of environmental groups produced a short video featuring Tony Award-winning director, Anna D. Shapiro:

EPA’s final rule is expected by June 2015, after which each state must develop an implementation plan to reduce carbon pollution and meet its target. EDF looks forward to continuing its work with legislators and regulators on the development of an effective plan that builds on Illinois’ already substantial clean energy progress.

This post originally appeared on EDF's Energy Exchange blog

Posted in Clean Power Plan, Energy| Read 1 Response

US-China climate pact a "game changer" for clean energy

(This blog by Karin Rives originally appeared on EDF Voices)

President Barack Obama and President Xi Jinping of the People's Republic of China. Source: Flickr/White House

For the first time, the world's two largest greenhouse gas emitters have pledged to reduce carbon pollution. This is a game changer, writes Fred Krupp, president of Environmental Defense Fund, in a Wall Street Journal op-ed piece.

The agreement between the United States and China will be a giant boost for clean-energy markets.

Having the world’s two largest economies competing to accelerate the adoption of no-carbon and low-carbon technologies will send one of the most powerful market signals we have ever seen, Fred writes.

China, spurred by its smog-burdened cities and the growing costs from the impact of climate change, will be increasing its already substantial investments in solar and wind, working with the U.S. on new approaches to cleaner energy and reducing the country’s reliance on fossil fuels.

And America’s fears of competition from China may now be cast in a new, positive direction: Who will dominate – and profit from – the renewable-energy resources that will power the world’s low-carbon economy?

In the past century, fossil fuels were the surest route to wealth and power. Now, the companies that produce and sell carbon-free and low-carbon technologies – from solar and wind to energy efficiency and nuclear – will be advantaged.

And the U.S. must demonstrate that it is up to the task of competing with China in all of these areas, Fred writes.

His full article is available to subscribers of the Wall Street Journal.

Posted in Greenhouse Gas Emissions, International, News, Policy| Comments are closed

Flexible Pollution Rules can Boost the Economy: 5 Reasons Why

By Diane Munns, Senior Director, Clean Energy Collaboration

economy_378x235

Source: Flickr/Brookhaven National Lab

Nobody likes being told what to do.

Gina McCarthy, head of Environmental Protection Agency, knows that. So she asked her agency to craft a plan that leaves it up to states to shape their energy future – as long as they cut carbon emissions from power plants.

Often lost in the heated debate over EPA’s Clean Power Plan, however, is the fact this built-in flexibility will also give a boost to clean technology ventures, and speed up energy innovations already under way in many states. It could bring down costs for consumers, and maybe even give a much-needed boost to our economy.

Here’s how.

1. Flexibility will foster creativity.

All states have different strengths and weaknesses, and their infrastructure varies. Under EPA’s plan, a state can choose to close or upgrade coal plants, join a carbon market such as the Regional Greenhouse Gas Initiative, invest in zero-carbon renewable energy sources, boost energy efficiency programs, or take any other step to meet the individual goal EPA set for the state.

Chances are, many state strategies will be multi-pronged and collaborative. The best and most viable solutions will surface to the top and be exported as best practices to other states. In fact, states and utilities looking to get ahead of the game are already beginning the discussions needed to one day craft plans.

2. State plans can be tweaked and improved over time.

States have 15 years to meet their individual carbon reduction goals. This is not supposed to be a rush job, no matter how urgent the climate challenge.

So a state that needs to abandon plans for a certain new technology, or that wants to switch to a more affordable solution, will likely have time to do so. The long-term planning horizon will allow new technologies and business models to be tested and take hold.

3. As old plants close, new and cost-effective technologies move in.

The EPA rules are being proposed at a time when utilities nationwide are pondering how to best replace aging infrastructure. Three-quarters of all coal-fired power plants are at least 30 years old, which means they only have about a decade left to operate.

This transition is expected to speed up over the next few years as a 2015 deadline for reducing mercury emissions and other harmful pollutants from power plants draws near.

With carbon storage still out of reach, no off-the-shelf technology available to affordably cut pollution from coal plants – and with natural gas, a fossil fuel, not a long-term viable alternative – we expect utilities to increasingly turn to renewable generation and energy efficiency solutions to meet EPA’s goals.

Energy efficiency remains the single best value for the dollar and it can easily be deployed within the 15-year timeframe.

4. A changing energy landscape will bring new business.

As zero and low-carbon technologies become more valuable and competitive over time, there will be more opportunities for companies to move into this space – and to flourish.

For years already, utilities have been switching from coal to natural gas, a cleaner and cheaper fuel that emits about half the carbon coal does. Industry analysts expect this transition to speed up in anticipation of the new power plant rules.

As state regulators push utilities to comply with the EPA emissions targets, look for new opportunities for industry and entrepreneurs to reduce emissions and improve efficiencies at natural gas plants.

Other businesses will scale up investment in alternative energy sources as the market for such technology gains value and broadens. There are already many active players in this emerging industry, and they want to grow in the United States and beyond.

5. Coming: A new way to produce and consume energy.

States working to cut emissions from fossil plants will be exploring new approaches – not just for energy production, but also for how we consume energy. There is “low-hanging fruit,” untapped opportunities for carbon reduction and customer savings, that won’t require additional power plant investments.

Expect EPA’s plan to fuel smarter utility business models where power companies are rewarded for helping consumers save energy rather than wasting it. The environment will benefit, as will American households and businesses.

This post originally appeared on our EDF Voices blog.

Posted in Clean Air Act, Clean Power Plan, Energy, Green Jobs, Greenhouse Gas Emissions, Policy| Read 2 Responses
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