The Environmental Protection Agency (EPA) is likely to miss the deadline to finalize the anti-coal New Source Performance Standards, energy analysts say.
The agency is scheduled to finalize the rule, which would require new power plants to emit a maximum of 1,000 pounds of carbon dioxide per megawatt hour of electricity produced, thereby negatively affecting the coal industry, by April 13.
Yet legal trouble and congressional resistance make it unlikely that EPA will make the deadline.
“If EPA is convinced what it would come out with is legally vulnerable, the delay makes absolute sense,” Frank O’Donnell, the president of Clean Air Watch, told the Free Beacon. “I'd rather they take a little longer and make sure they get it right.”
EPA and White House officials are huddling to consider how they can modify the regulations to survive legal challenges, according to the Washington Post.
“A lot of people, myself included, think this approach is almost certain to get struck down in court,” Jeffrey Holmstead, an energy-industry attorney at Bracewell & Giuliani LLP who headed up the EPA’s air division during the Bush administration, told the Post in a separate story.
Holmstead and others say the EPA does not have the authority under the Clean Air Act to set rules for all new power plants.
“We’re very concerned about the potential for delay,” David Doniger, climate director at Natural Resources Defense Council, said at a recent Capitol Hill forum. If the EPA misses the April deadline, Doniger said, “groups like ours will take steps to have it enforced.”
Environmental groups are pressuring the Obama administration and have rallied supporters to submit more than two million comments on the proposed rules.
But the regulations have run into stiff resistance from the energy industry, Republicans, and also Democrats from coal country.
Opponents say the rules effectively ban construction of new coal-fired power plants by holding them to the same emissions standard as cleaner-burning natural gas plants.
Democratic Sens. Joe Manchin (W.V.), Joe Donnelly (Ind.), Heidi Heitkamp (N.D.), and Mary Landrieu (La.) asked the Obama administration in a March 14 letter to reconsider provisions holding new coal-fired plants to the same standards as gas-fired plants.
“Such a requirement is unprecedented under the Clean Air Act and will have the unfortunate effect of preventing the construction of new coal plants or the upgrading of existing sources,” the group wrote in the letter. “We urge you to consider an alternative approach.”
“Not only would this rule have a devastating effect on our coal production, this rule would endanger the reliability and sustainability of our electricity supply,” Manchin added in a statement.
“It's not a poorly written rule so much as a muddled one that conflates those two too readily,” Competitive Enterprise Institute energy policy analyst William Yeatman said in an interview.
“Instead of taking a subcategory of an industry, it took two disparate industries, combined them together, and then said the best system of emissions control technology for a coal-fired power plant is to be a gas-fired power plant,” Yeatman said.
Environmental advocates argue coal is on the decline in any case.
“Everybody who follows these issues knows the real reason coal use has gone down is because natural gas has become cheaper and so much more abundant,” O’Donnell said. “The EPA rules on the new sources would have no affect on that situation because, as far as I know, there're no new coal plants in the works anyways.”
But Yeatman and others say it would be folly to over-rely on natural gas.
“There's this misconception that there's been this wholesale shift from coal to natural gas,” Yeatman said. “There's only one region where natural gas has competed with the price of coal, and that's in the southeast. In the rest of the country coal's about twice as cheap.”
Natural gas is also subject to volatile price spikes. Overreliance on natural gas can lead to sharp increases in energy prices, such as the one that occurred in New England during a cold snap in late 2012. Energy prices rocketed to four to eight times normal rates.
The New Source Performance Standards could be a bellwether for Obama administration attempts to capitalize on its pledge to reduce carbon emissions. The rules would only affect new plants coming online and not existing power plants, which are one of the main emitters of greenhouse gasses.
Environmental groups such as Clean Air Watch see the standards as a stepping-stone toward regulating existing plants.
Meanwhile, energy advocates see the rules as the administration’s first attempt to hamstring conventional energy plants.
The proposed regulations are “an obvious effort to speed up the exit of coal from the market,” said Benjamin Zycher, an American Enterprise visiting scholar.
“Combined cycle gas plants meet the proposed standards fairly easy,” Zycher said. “But no coal plant yet. That technology would essentially double the cost of coal. This is the opening shot in the EPA's effort under this admin to put the squeeze on all conventional fuels.”
For now, both sides are holding their breath.
The EPA did not respond to requests for comment.