US president Barack Obama’s rally against climate change has, in the eyes of some, turned into a war against coal.
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Under Obama’s Clean Power Plan, the Environmental Protection Agency (EPA) is proposing to regulate carbon emissions from new and old power plants – a move the American Coal Council (ACC) is “gravely concerned about” – in order to cut carbon pollution from the power sector by 30 % below 2005 levels.
Alison Lundergan Grimes, a contender for a senate seat in the coal mining state of Kentucky, which has recently lost 7,000 coal mining jobs, says in her campaign video that the “EPA is targeting Kentucky coal with pie-in-the-sky regulations that are impossible to achieve”. Grimes’s words are representative of how many of the coal producing states in America view the proposed changes.
But as the coal industry rallies against the EPA, many have noted that it isn’t just regulation that could curb the use of coal. A combination of the increased integration of cheap and abundant natural gas into the energy mix, coupled with tightening EPA regulation, could send coal into a death spiral.
EPA regulations outlined
The proposed EPA regulations include adding greenhouse gases to a list of restricted pollutants, for which major polluters are already required to obtain clean air permits. Under the proposals, all new coal-fired power plants will have to meet an emissions limit of 1,100 pounds of carbon dioxide (CO2) per megawatt-hour. To achieve this, power plants would have to deploy the best available technology, most likely carbon capture storage (CCS).
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By GlobalDataThe EPA’s ability to set these standards was upheld by the Supreme Court in June and, in April, a proposal from the EPA to regulate smog from coal plants that drifts across state lines was also upheld by the Supreme Court.
The coal industry was recently criticised for running a coal and climate event alongside UN emissions negotiations in Poland.
The EPA’s latest offensive on coal, announced in early June, which is currently under public discussion, is a proposal to regulate CO2 emissions from existing coal and gas-fired power stations. In 2015, it proposes setting each state its own emission goals, which are expected to be met by efficiency measures, integration of renewables and nuclear, or by joining regional cap and trade systems.
Piling on the pressure
The biggest challenge to coal is the EPA’s proposed regulation limiting emissions on new coal-fired power plants.
“These new standards effectively take coal off the table as an option for new generation resources,” the ACC said in a May statement.
The coal industry is opposed to CCS because it says the technology isn’t fully developed or commercially viable; basically it is too expensive. The Energy Information Administration (EIA) estimate it costs $6,599 per kilowatt, six times the price of new natural gas combined cycle unit without CCS.
World Coal Association Chief Executive Milton Catelin says this particular proposal will “tie the construction of new higher efficiency, low emissions coal plants to commercially untested CCS facilities, and does nothing to reduce carbon emissions from coal globally”.
Gas – an equally matched enemy?
Others say restrictions on building coal-fired power plants will push America’s energy mix further towards natural gas.
“This is a short sighted measure that will simply encourage fuel-switching to gas,” Catelin says, adding, “This switch will reduce energy security by weakening the energy mix, driving up gas – and therefore electricity – prices and will only deliver modest, short-term emissions reductions – natural gas is not a low emission energy source, it needs CCS as well.”
In 2013, production of dry natural gas reached its highest recorded annual total, according the EIA.
However, some see this shift from coal to natural gas happening even without the EPA regulations.
Assistant Professor of Energy Resources Engineering at Stanford University, Jennifer Wilcox, says: “The biggest impact [on coal] has to do with the cost and availability of natural gas more than any of the EPA proposals.
“Natural gas is becoming more integrated in the US and it’s due to the availability and cost – not necessarily from the pressure of coal regulations.”
The ACC, however, appears to view the EPA’s proposals as a push towards natural gas.
“EPA is picking winners and losers in the energy economy of the future,” the ACC says.
For the first time ever, a coal-fired power plant is being retrofitted with CCS.
“EPA apparently assumes that natural gas will remain a low cost fuel in perpetuity. The fact is, no one can predict what market prices will be, especially three, five, ten or more years down the road,” the industry body added, pointing to fluctuations in the natural gas market, price hikes in some regions and deliverability issues during last year’s cold spell.
US coal economy – headed for a new direction?
America has more coal than any other country in the world and it is responsible for about 40% of US electric generation, as well as over 800,000 direct and indirect jobs, according to the ACC. It’s a vital part of the country’s energy mix and though the industry should be poised for change, many believe it’s not being replaced anytime soon.
Josh Holmes, chief of staff to Mitch McConnell, Republican Senate minority leader for Kentucky, told The Guardian: “The people who are ready to throw in the towel on this industry have absolutely no idea what they are talking about.” He added: “There is no miracle solar panel that is going to change the way America produces energy right now.”
However, natural gas, renewables and the intensifying global warming debate means coal is rapidly falling out of favour.
Whether all the EPA regulations are enforced in their current form or whether they are watered down, coal’s share of the energy mix could get smaller and smaller unless it embraces CCS and other such technologies.
If CCS can deliver, it will offer the industry a lifeline and a chance to thrive in a climate change conscious era. Therefore, as the industry continues its battle against Obama’s climate change mission, it will no doubt be watching closely as two coal-fired power plants with CCS – Kemper County energy facility in Mississippi and Boundary Dam in Canada – come online this year and next.
All new coal-fired power plants will have to meet an emissions limit of 1,100 pounds of CO2 per megawatt-hour.
The coal industry is opposed to CCS because it says the technology isn’t fully developed or commercially viable.
In 2013, production of dry natural gas reached its highest recorded annual total.
Natural gas, renewables and the intensifying global warming debate means coal is rapidly falling out of favour.
Picture credit: Kiril Havezov
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