“Greenhouse Gas Strategies for Coal-fired Plant Operators,” Hot Topic Hour, June 28, 2012

In March 2012, EPA proposed a new Greenhouse Gas (GHG) standard that would limit emissions from all new power plants to 1,000 lb CO₂/MWh, effectively banning any new coal-fired plants. Existing plants will have to address GHG emissions under a different rule, the so-called “Tailoring Rule,” which governs PSD (pre-construction) and Title V operating permits.

Debbie Fox, an Environmental Attorney at the McIlvaine Company, discussed the impact of EPA’s greenhouse gas regulations on existing coal-fired power plants. If an existing plant plans to make a major modification, the facility must obtain a PSD (pre-construction) permit and employ the Best Achievable Control Technology (BACT) for CO₂.  Based on EPA guidance and permits issued to date, BACT for CO₂ may include energy efficiency measures, numerical CO₂ emission limits and fuel requirements. EPA has also insisted that Carbon Capture and Storage (CCS) be thoroughly considered in the BACT analysis, even if it is ultimately rejected. Existing plants will also have to address GHG emissions when they renew their five-year operating permits and Debbie discussed the implication of EPA’s greenhouse gas rules on permit renewals.

David D. Doniger, Policy Director, Climate and Clean Air Program at the Natural Resources Defense Council (NRDC), reviewed this week’s decision by the D.C. Court of Appeals upholding EPA’s efforts to regulate greenhouse gases under the existing Clean Air Act.  In particular, the Court supported EPA’s “endangerment” decision which formed the basis for regulating CO₂ as an air pollutant. The Court also upheld the “Tailoring Rule” which raised or “tailored” statutory thresholds to accommodate CO₂ emission quantities.  David also gave an assessment of EPA's proposed CO₂ standards for new power plants and addressed options for EPA and the states to address CO₂ emissions from existing power plants under the Clean Air Act.

The final 30 minutes of the recorded discussion was primarily an exchange of views between David and Bob McIlvaine as to how the environmental and the utility industry could reduce confrontation and work on a more collaborative basis. David says that NRDC and other environmental associations are working on a draft proposal for a flexible policy to most cost- effectively achieve environmental goals. This recommendation will be covered in his blog at http://switchboard.nrdc.org/blogs/ddoniger/

David agrees with Bob that new coal-fired power plants are per se not a target. He supports the concept of new coal-fired power plants with carbon sequestration and even focus on carbon emissions over the lifetime of the plant. This would open the door to new ultrasupercritcals without carbon capture initially but the addition of CCS at a later date. 

Debbie cited a Duke plant in her analysis. It was required to justify a new coal-fired power plant based on reduction of carbon at its other plants which exceeded the carbon emissions of the new plant. McIlvaine would submit that this is a template which could open the door to the construction of many new plants in the U.S.

Let’s examine the assertion that is too expensive to build a new coal-fired power plant due to the price of natural gas. First of all, most utilities are aware of the fact that the world price of LNG is $20/MMBtu and that the U.S. would become an exporter of natural gas if it could do so profitably. Gas-to-liquids represented in a huge proposed plant in Alaska would be very attractive if there is a big disparity between local gas cost and liquids pricing. So any chance of long term low gas prices would depend on the price of oil dropping to $50/barrel.

Europe has re-phrased the new coal question by formulating a strategy where coal remains a percentage of the total fuel mix over the next 25 years. With this strategy old coal-fired power plants are being replaced with new ultrasupercriticals with highly efficient air pollution control equipment. The result is not only CO₂ reduction as high as 30 percent but reduction of other pollutants by as much as 80 percent. How important is this?

Debbie in her speech estimated the relationship between SO₂ and CO₂ relative to harm to the environment at 1,000-1. This was based on the EPA guideline that 100 tons per year of SO₂ is the threshold for action vs. 100,000 tons per year for CO₂. Maybe this is not the best number but the need to determine the relative relationship is essential for creating a collaborative rather than a confrontational atmosphere. The reason is that if the harm from any initiative can be quantified by a number then a constructive conversation can be made about the accuracy of the number. If instead we are dealing with absolutes such as “now new coal” then confrontation will continue.

When the debate is focused on the numbers, understanding and compromise are more easily obtained. Debbie used 1,000 to l for SO₂ harm vs. CO₂ on a per ton basis. A comprehensive McIlvaine analysis used 100 to l in comparing the harm reduction in switching the entire coal- fired fleet to ultrasupercrticals with the latest APC equipment. Replace Old Coal Plants with New

This study shows that there would be an equivalent reduction in harm of 3 billion tons of CO₂/yr. The cost would be negligible because the new power plants would consume 30 percent less coal and would operate with the latest automation. There is only 1.7 billion tons of CO₂ generated by power plants. Therefore the reduction of the other pollutants is more important in the aggregate.

McIlvaine has developed an important tool which will help peg the relative harm of CO₂ vs. other pollutants. A new metric entitled “Quality Enhanced Life Days” (QELD) developed by McIlvaine for the hospital industry is equally useful for this evaluation.

Sustainability Universal Rating System

This webinar can be the starting point for a less confrontational approach between environmentalists and industry.

Debbie’s power point presentation can be viewed at Debbie Fox - McIlvaine - GreenhouseGasRegulations - 6-28-12.pdf