Climate 411

There They Go Again, Part Two: Mercury Controls on Power Plants

By Steve Cochran / Published: December 14, 2010

“And they said it couldn’t be done …”

When it comes to cleaning up pollution, never underestimate the power of innovation.

Five years ago, the Environmental Protection Agency (EPA) faced a court deadline to regulate mercury pollution from power plants. Mercury is a potent neurotoxin that harms brain development in fetuses and growing children. But some in the utility industry argued that the technology was not available to achieve rigorous pollution reductions.

In 2005, EPA accepted those claims and issued a weak rule — one that was later thrown out by a federal appeals court.

EPA will take up the issue of the toxic pollution discharged from power plants soon — this coming March. Hopefully, they will keep in mind that industry pessimists who said it could not be done were wrong.  Fast-moving innovation is delivering cost-effective mercury reductions right now, while growing America’s clean air technology industry. So this time around, EPA should not listen to the “sky is falling” claims — and should move ahead with rules that will protect Americans’  health. 

Here’s more about the 2005 mercury rules:

Coal industry claims ACI technology isn’t feasible

Coal-fired power plants are the largest human-made source of mercury emissions in the United States. In 2004 and 2005, EPA considered several means to reduce power plant mercury emissions. The protective solution to implement the Clean Air Act would have required each coal-fired power plant to reduce mercury emissions by 90 percent through Activated Carbon Injection (ACI), a control technology that had been used in the waste-to-energy industry for many years and was already being successfully used by coal-fired power plants by the early 2000s.

But some members of  the coal-fired utility industry claimed that ACI technology was many more years away from full-scale deployment, and projected that it would be 2018 before ACI could be feasibly installed at most power plants:

  • A spokesman for the Electric Reliability Coordinating Council urged EPA to use “realistic assumptions about the current state of mercury control technology.” (Nesmith, Jeff, Rules on Mercury to Be Fine-Tuned, Atlanta Journal-Constitution, April 30, 2004, p. A6.)
  • An official with Indianapolis Power & Light Company stated “If we can get a man to the moon, I’m sure we can get to 90 percent [mercury reduction] over time, just not now.” (Webber, Tammy, EPA Orders Industry to Cut Mercury by 70%, Indianapolis Star, March 16, 2005, p. A1.)
  • EPA’s final rule mirrored industry claims:  “Although EPA is optimistic that such controls may be available for use on some scale prior to 2018, it does not believe that such controls can be installed and operated on a national scale before that date.”

ACI technology proven feasible and cost-effective

Utility industry pessimists were wrong about the feasibility, scalability and cost of using ACI to reduce mercury pollution from coal-fired power plants. After EPA issued its weak rule (the one that was thrown out in court), many state and local governments stepped up to the plate and required power plants to protect public health from mercury pollution. Responding to the demand created by these state and local controls, companies have delivered cost-effective mercury control technology that is performing even better than hoped for.

As of June 2010, a large number of coal-fired power plants have ordered or installed mercury control technology — so many that, combined, they generate more than 62,000 megawatts of electricity, which is enough to serve more than 60 million American homes. Here’s a list of all those plants. Overwhelmingly, they have chosen to install ACI technology — the same kind that Clean Air Act pessimists dismissed five short years ago as unrealistic and impractical.

The Government Accountability Office reports that ACI systems have become even more effective at removing mercury from flue gas as they have been deployed in the electric utility industry. The GAO says, “Data from power plants shows that these boilers have achieved, on average, reductions in mercury emissions of about 90 percent” — and that applies to a variety of coal types burned in different boiler configurations. The GAO also says that this magnitude of reduction can be expected from the boiler configurations used at nearly three-fourths of the coal-fired utility boilers in the U.S.

Costs and benefits of ACI technology

ACI technology has turned out to be an efficient and affordable pollution control, and the cost of capturing mercury from power plants has dropped dramatically.

According to the Department of Energy’s National Energy Technology Laboratory, the 2008 cost to capture a pound of mercury was 1/6 the 1999 price. Advancements in the sorbents used to remove mercury have allowed ACI to be used for a wider range of coal qualities than was expected in 2005 (read more in this GAO report [PDF].) ACI systems now cost a fraction of other air pollution control devices.

“But there they go again …”

In spite of all the powerful evidence that mercury controls are available and highly cost-effective in protecting human health, some industry voices continue to argue against requiring them.

For instance, the U.S. Chamber of Commerce — ignoring the facts — still claims that mercury control solutions are not available.

Some in the utility industry persuaded EPA to bet against mercury control innovation the last time around, and as a consequence, EPA set policies that recklessly failed to protect human health. But state action and a nimble U.S. clean air technology industry has proven, yet again, that America can innovate to deliver the pollution reductions we need to protect our health and the health of future generations.

Now we need EPA to carry out the law to ensure all Americans are protected by clean air standards addressing toxic mercury from power plants.

Also posted in Energy, Policy / Read 1 Response

Debunking Clean Air Scare Tactics: Part One, Acid Rain

By Steve Cochran / Published: December 2, 2010

There they go again. Economic meltdown. Higher consumer costs. Massive job losses. These are among the predictions of doom surrounding EPA’s current and forthcoming round of clean air protections. If they sound familiar, they should. Time and again, from the enactment of the Clean Air Act in 1970 to today, prophets of doom have predicted that disastrous consequences would flow from cleaning the air we all breathe. And time and again, those dire predictions have been wrong. The Clean Air Act has protected American health and our environment for decades while our economy has grown. It is a legislative success story that continues today.

This series will examine what the naysayers have said about Clean Air Act protections and how those wild predictions compare to the statute’s actual record of protecting Americans from toxic air pollution and its devastating effects on human health and the environment. We start with the acid rain program in the Clean Air Act Amendments of 1990.

Part One: The Acid Rain Program

These maps compare annual wet sulfate deposition at the time of the 1990 Clean Air Act Amendments and today's deposition levels, depicting the extraordinary progress that has been made. Source: NADP data.

Predictions of Doom

Twenty years ago, and twenty years after enacting the modern Clean Air Act, Congress took up the matter of acid rain, which was devastating ecosystems across the East and Northeast. Acid rain is caused by air pollution including sulfur dioxide emissions from coal-fired power plants. For the first time ever, the Clean Air Act Amendments of 1990 used the groundbreaking tool of a market-based cap and trade system to reduce sulfur dioxide emissions.

Industry fought the acid rain program with scare tactics throughout the legislative debate, warning that it would wreak havoc on the economy:

  • The Edison Electric Institute predicted the Clean Air Act Amendments would cost the electric utility industry up to $4.5 billion a year.
  • The Business Roundtable projected the total economic cost would be $104 billion a year.
  • American Electric Power Company warned of “the potential destruction of the Midwest economy.”
  • In an editorial that dismissed the scientific case for reducing acid rain, the Atlanta Journal and Constitution warned that “Americans can expect their power bills to skyrocket for nothing.”

Protecting our Health and Environment

Twenty years later, peer-reviewed EPA studies required by the Clean Air Act show that sweeping public health benefits have resulted from the reductions in air pollution achieved under the 1990 Clean Air Act Amendments. While the legislative debate about acid rain focused on environmental harm, public health reaped great benefits because sulfur dioxide pollution from power plants forms not only acid rain, but also particulate pollution that is particularly dangerous to breathe.

EPA estimates that the pollution reductions achieved under the 1990 Clean Air Act Amendments will in this year alone:

  • Save 160,000 lives,
  • Avoid 130,000 cases of acute bronchitis and 130,000 heart attacks,
  • Prevent 86,000 emergency room visits,
  • Keep children in school and prevent 3,200,000 lost school days and
  • Keep workers on the job and prevent 13,000,000 lost work days.

These profound public health benefits are paired with dramatic reductions in sulfate deposition, and damaged environments have begun to recover from the ill effects of decades of acid rain.

Costs and Benefits

Not surprisingly, the cost of achieving the tremendous public health and environmental benefits of the Clean Air Act Amendments of 1990 were a fraction of industry forecasts, and significantly below EPA’s own projections. In 1990, power companies predicted that reducing sulfur dioxide pollution would cost $1000-$1500 per ton and electricity prices would increase up to 10% in many states (Factsheet, Committee on Energy and Commerce, Industry Claims About the Costs of the Clean Air Act [PDF], June 16, 2009). In fact, the actual pollution reduction cost has been between $100 and $200 per ton for most of the program, and electricity prices fell in most states. Acid rain has been dramatically reduced and the limits on sulfur dioxide pollution were met faster and at a strikingly lower price than anyone expected in 1990.

The benefits to public health and the environment outweigh these costs many times over. EPA’s analysis of the costs and benefits of the Clean Air Act projects that in 2020 the benefits of the 1990 Clean Air Act Amendments will exceed the costs of compliance by a factor of 30 to 1. Studies by the Office of Management and Budget and private researchers support these conclusions as well.

The predictions of doom in 1990 overlooked the power of American innovation unleashed by the goals of the Clean Air Act Amendments and the market-based system Congress established to achieve them. Unlike previous programs that specified what pollution controls must be used, the acid rain program set enforceable and descending limits on total pollution, but let industry experiment, innovate and find the most cost-effective means to lower pollution. These results are a striking rebuke to the critics who said it could not be done.

Also posted in Health, Policy / Read 10 Responses

API Misses the Mark: Why Refineries Will Do Just Fine Under ACES

By Britt Groosman / Published: August 25, 2009

The American Petroleum Institute (API) recently took a break from hosting anti-cap-and-trade rallies for oil company employees, and used its spare time to put out a study claiming the American Clean Energy and Security Act (ACES) would be unfair to American oil refineries. Unfortunately their study uses some dubious assumptions – and makes some even more questionable claims.

API’s study (carried out by consulting firm Ensys Energy) outlines two major complaints.

  • First, API whines that the bill only sets aside 2.25 percent of emissions allowances for refiners, while the electricity sector gets 35 percent of the available allowances.
  • The second, related claim is that ACES would increase the cost of doing business so much that companies would turn to cheaper overseas refineries instead.

Before we even address those complaints, there’s one thing I have to point out — API is relying on bad modeling and cherry-picked results to create its case.

  • The results quoted in API’s news release come from running a scenario that severely restricts international offsets and allows no expansion of low-carbon technologies beyond what would happen without a clean energy bill. There’s no basis for those assumptions, but they do manage to skew the results to make refineries look more vulnerable.
  • However, if we consider the “basic case” (or, “most likely”) model outcome in Ensys’ report, it is clear that the activity of domestic refineries is expected to increase compared to their current levels.

But let’s ignore the study results for a minute, and just take a look at API’s two complaints.

First, API seems to think refineries are getting picked on because they aren’t getting as many free allowances as the electricity sector. But — they ignore the reasons why the two are not comparable.

  • The electricity sector allowances they’re talking about actually benefit American consumers. The allowances are first handed to local distribution companies, or LDC’s, but the value of the allowances doesn’t stay there. LDCs are required to use the value of those allowances to protect consumers from electricity price increases. Giving allowances to the LDC’s really means giving allowances to American ratepayers.
  • Oil refineries, in contrast, are private companies whose owners are free to pocket any money they get from their emissions allowances. So giving allowances to oil refiners really means — giving money to oil refiners. (API might like those two ideas equally, but no one else does.)

Of course, if the oil refiners were willing to accept the same regulations as utilities, and guarantee that their emissions allowances would be used to lower the price of a gallon of gasoline, that’s an idea worth discussing. API’s study doesn’t put that offer on the table, though.

Second, API says that America could become dangerously dependent on foreign refineries. (API President Jack Gerard says, “Climate legislation should not come at the expense of U.S. economic and energy security.”)

But – U.S. refineries have cornered 90 percent of the market for domestic gasoline. Homegrown refineries dominate the market because there are, inherently, strong cost advantages for domestic production, and little incentive to send business overseas.

  • Different states have different regulations governing oil refining, which favors local businesses and makes it difficult or impossible for foreign refineries to compete.  In fact, in other environmental scenarios, such as emissions standards for cars, industries claimed exactly that – no company could possibly create 50 slightly different products to sell under 50 different state rules, and only local businesses could thrive under those conditions.
  • It’s also significantly easier and cheaper to ship crude oil than refined gasoline. That makes it much more efficient to import crude oil and do the refining right here at home. That’s a physical difference that won’t go away if we pass a clean energy bill.

EDF did our own analysis of the impact of climate legislation on oil refineries.  Here’s what we found:

  • The expected added cost from a clean energy bill, per gallon of refined gasoline, is less than one cent per gallon.
  • Analysis also suggests that refiners can be expected to pass on the majority of any cost increase to their customers.
  • As a result, between 1.4 and 1.7 percent of total allowances would be enough to compensate domestic refineries – in full — for the added costs associated with reducing their process emissions.
  • Since ACES allocates 2.25 percent of allowances to oil refiners, EDF believes the allocations set out in ACES are more than generous.

Given all this, the bill should not affect the competitiveness of American refineries.

A larger problem might be the unfortunate effect of API’s study on the average American consumer. Outside the industry, a lot of people don’t draw a distinction between “oil” and “gasoline.” A quick read of news articles about the study could imply that ACES will increase America’s dependence on foreign oil – when one of the most valuable aspects of the bill is that it will do just the opposite. Under ACES, the EIA predicts that the U.S. would reduce its consumption of oil by 344 million barrels in the year 2030 alone. That’s a vital benefit to our national security as well as our environment.

A whopping amount of our own oil and the imported oil would still be refined into gasoline here, in spite of API’s fears. After all, even their own biased study predicts increasing U.S. refinery activity.  All in all, clean energy legislation is still good for all Americans – including oil refineries.

Also posted in Climate Change Legislation, Economics / Read 2 Responses