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Obama unveils historical attempt to curb coal power plants emissions

Published by MAC on 2014-06-08
Source: Mining.com, The Guardian (2014-06-04)

Obama unveils historical attempt to curb coal power plants emissions

Cecilia Jamasmie

Mining.com

2 June 2014

US President Barack Obama unveiled Monday his awaited new environmental policy aimed to curb the country's greenhouse gas emissions by 30% by 2030, with all the states having until 2017 to comply with the new rules.

The 645-page document, developed by the Environmental Protection Agency (EPA), is a centrepiece of the Obama administration's climate change strategy. It is also the first time in the history of the US that a President imposes limits on power plant emissions, which could transform a sector that currently relies on coal for nearly 38% of electricity.

The rule, scheduled to be completed a year from now, gives much flexibility to the states, as they can decide how to meet the reductions. This includes expanding renewable-energy generation, working with other states to create regional plans and investing in or creating new energy-efficiency programs.

Each state will have a different reduction standard, and the national average will be 25% by 2020 and 30% by 2030, according to the EPA. The agency is asking states to submit implementation plans by June 2016, but the EPA is also giving states the option to extend that by one year.

Critics of the agency are already questioning the rule's costs and benefits. The US Chamber of Commerce released a report last week predicting it would cost the economy $51 billion and 224,200 jobs each year. The report prompted a top EPA spokesman to respond with a blog post the same day.

"The U.S. Chamber of Commerce released a report that makes unfounded assumptions about the EPA's upcoming proposal for common sense standards to cut the harmful carbon pollution from power plants," wrote Tom Reynolds, EPA associate administrator for external affairs and environmental education.

According to the agency, the new rules will shrink electricity bills by an estimated 8% by increasing energy efficiency and reducing demand on the electricity system.

But beyond figures, EPA's head Gina McCarthy said both the government and the industry have "a moral obligation" to act on climate.

"When we do, we'll turn climate risk into business opportunity, we'll spur innovation and investment, and we'll build a world-leading clean energy economy," she said in her speech.

"The science is clear. The risks are clear. And the high costs of climate inaction keep piling up," she added.

Winners and losers

Experts believe West Virginia will be the hardest hit by the new measures. The state, one of the US's three poorest by household income, sits at the heart of coal country. Official figures also show the state gets 95% of its power from the fossil fuel.

The National Association of Manufacturers argues the plan will severely hurt American competitiveness.

The EPA backfires saying the regulations could yield over $90 billion dollars in climate and health benefits.

From a public health perspective, smog and pollution drops that would also be achieved through the plan, would translate into a $7 health benefit for every dollar invested in the plan, McCarthy says.

And, according to the agency's estimates, reducing exposure to particle pollution and ozone could prevent up to 150,000 asthma attacks in children and as many as 3,300 heart attacks by 2030, among other impacts.

The rules, when finalized, are expected to have an impact that extends far beyond the United States.

National Post Editor Kelly McParland, for one, believes they will benefit Canada:

"It may be good news for Canada, in a backhanded kind of way. With no plan of its own, Washington has spent a good deal of time complaining that Canada lacks an adequate strategy to address the emissions issue. Coal is by far the dirtiest way to produce electricity, and Canada uses far less of it than the U.S. - and is farther ahead in reducing its usage - yet Washington keeps citing Canadian emissions policies as a significant reason Mr. Obama hasn't been able to bring himself to make a decision on the Keystone XL oil pipeline."

Coal-fired power plants have already been closing across the country. Department of Energy data indicates the number has fallen from 633 in 2002 to 557 in 2012 and it expects 60 gigawatts of coal-fired power - one-fifth of total US coal capacity in 2012 - will retire by 2020.


Obama unveils historic rules to reduce coal pollution by 30%

• New EPA rules spur prospects for deal to end climate change
• Climate groups welcome 'momentous development'
• Coal lobbyists say plans will create new US energy crisis

Suzanne Goldenberg, US environment correspondent

The Guardian

2 June 2014

The Obama administration unveiled historic environment rules cutting carbon pollution from power plants by 30% on Monday, spurring prospects for a global deal to end climate change but setting up an epic battle over the environment in this year's mid-term elections.

The new rules, formally announced by the Environmental Protection Agency, represent the first time Barack Obama, or any other president, has moved to regulate carbon pollution from power plants - the largest single source of carbon dioxide emissions that cause climate change.

The EPA said the regulations, which would cut carbon pollution from power plants 30% from 2005 levels by 2030, would "fight climate change while supplying America with reliable and affordable power".

The EPA administrator, Gina McCarthy, said the new rules would be critical to Obama's efforts to deliver on his promise - to Americans and the international community - to fight climate change.

"The EPA is delivering on a vital piece of President Obama's climate action plan by proposing a clean power plan that will cut harmful carbon pollution from our largest source - power plants," she said in a statement.

"This is not just about disappearing polar bears and melting ice caps," McCarthy said in a speech at EPA headquarters. "This is about protecting our health and protecting our homes. This is about protecting local economies and this is about protecting jobs."

The new rules were not as ambitious as some environmental groups had hoped. America is already a third of the way towards meeting the national average of a 30% cut in emissions. Some states, especially those in the north-east, have already exceeded the standard.

Even so, reaction from environmental groups to the new power plant rules ranged from "momentous" to "historic". Al Gore said the new rules were "the most important step taken to combat the climate crisis in our country's history".

Michael Brune, executive director of the Sierra Club, said "today, the president made good on his promise to American families that his administration would tackle the climate crisis, and clean up and modernize the way we power our country."

In an initiative organised by Ceres, the green investor network, 128 companies and 49 investors managing $800 billion in assets, sent letters to the White House and leaders of both parties in Congress supporting the new rules as "a critical step" to dealing with climate change.

But a lobby group for the coal industry - which will be hit hardest by the new rules - said the regulations would hurt the economy and lead to power outages. "If these rules are allowed to go into effect, the administration, for all intents and purposes, is creating America's next energy crisis," the American Coalition for Clean Coal Electricity said.

Obama had initially sought to deal with climate change through Congress. But after that effort collapsed, and with Republicans in Congress uniformly opposed to cutting carbon emissions - or even acknowledging climate change was occurring - Obama decided last year to use his executive authority to cut carbon pollution.

In her announcement on Monday, McCarthy hit back at criticism from industry and conservative groups that the rules will lead to power outages or higher electricity prices. "Critics say that their energy bills will skyrocket. Well, they're wrong," she said.

McCarthy said the new rules would result in pollution savings that amount to "double what every power plant in America generated in the way of pollution in 2012."

The result, she said, would be lower medical bills and fewer trips to the emergency rooms, especially for kids with asthma, the elderly and infirm.

McCarthy says the plan "is also about environmental justice" because "lower-income families and communities of color are hardest-hit."

Emissions creeping up again

Power plants are the largest single source of carbon pollution, accounting for nearly 40% of the emissions that cause climate change.

Obama, in his weekly radio address on Saturday, said it was past time to set national limits on carbon dioxide emissions - just as the EPA has done for years with arsenic, mercury and other toxins.

"Right now, there are no national limits to the amount of carbon pollution that existing plants can pump into the air we breathe. None," he said. "They can dump unlimited amounts of carbon pollution into the air. It's not smart, it's not safe, and it doesn't make sense."

Carbon dioxide emissions from power plants had been falling since 2005, because of the economic downturn and because of the switch from coal to cheaper natural gas.

Ethan Zindler of Bloomberg New Energy Finance said the power industry was already about a third of the way towards the 30% goal.

But emissions crept up last year and again in the first months of 2014, and the regulations would put America on course for long term and lasting cuts to carbon pollution.

Andrew Steer, the chief executive of the World Resources Institute, said it was a "momentous development" for America's efforts to deal with climate change.

"It's the most important action available to cut US emissions - and the Obama administration has seized the opportunity," he said. "These new standards send a powerful message around the world that it's time to face the global threat of climate change."

The rules could affect 1,600 power plants. About 600 of these operate on coal, including many that are nearly 50 years old and will have the most difficulty meeting the new standards.

Under the rule, states and power companies will have a range of options to meet the new standards: switching from coal to cleaner-burning natural gas; forming cap-and-trade markets; expanding renewables such as wind and solar power; or encouraging customers to use less energy by moving to more efficient heating and cooling systems and appliances.

That's a departure for the EPA, which generally has focused on curbing emissions from specific smoke stacks.

But the Natural Resources Defense Council, which produced models that helped guide the EPA, said a system-wide approach would make it easier and cheaper for power companies to reach the new standard.

The 30% national target will not be applied uniformly across the country. The EPA will set individual reductions targets for each state, taking into account their energy mix, according to those briefed on the plan.

States have until 2016 to come up with a strategy for meeting the targets. However, the EPA rules will not come into force in all states until 2020, according to one individual briefed on the plan.

"They are not going to spread it out smoothly all over the place like creamy peanut butter," said Vicki Arroyo, who heads the climate centre at the Georgetown University law school. "It's going to be more lumpy than that. Some states will have less ambitious targets, and some states will have more."

The idea is to take account of the available energy sources in each state, as well as the measures some states have already undertaken to cut carbon pollution. North-eastern states have already cut their power plant emissions by 40% compared with 2005.

McCarthy said Monday the plan is tailored for the states. "The glue that holds this plan together ... is that each state's goal is tailored to their own circumstances ... each state's different, so each goal, and each path, can be different," she said.

Arroyo said it was possible the rule could bring about the same level of reductions in carbon pollution as a climate change bill that was defeated by Congress five years ago.

The new EPA rule bypasses Congress, relying on Obama's executive authority and supreme court decisions, to propose new rules under the Clean Air Act.

The Chamber of Commerce, the country's biggest business lobby, said last week the new rules would cost the economy $51bn and put 224,000 people out of work.

Coal-mining companies, some power companies and Republican state officials have accused the EPA of overstepping its authority, and will be studying the bill closely for possible legal challenges.

In their rebuttal to Obama's radio address, the Republicans said the new standards would "kill coal" and lead to power outages.

"We'll all be paying a lot more money for electricity - if we can get it," said Wyoming senator Mike Enzi.

But Obama has been marshalling his own supporters. Environmental and public health groups have been pushing hard for the new rules.

Researchers from Harvard and Syracuse universities put out a study last week saying that curbs on carbon pollution would also reduce smog and soot, avoiding premature deaths from heart attacks and lung disease.

That campaign effort is due to pick up again on Monday. Obama is scheduled to hold a conference call with the American Lung Association and other public health groups on Monday afternoon.

White House officials spent Sunday briefing governors and business leaders about the new rule.


EPA's new carbon regulations could cut coal emissions by 20%

Cecilia Jamasmie

Mining.com

29 May 2014

The upcoming rules will be a key test to see whether the president and his Environmental Protection Agency (EPA) are able to curb greenhouse gas emissions without hurting the country's economy.

US President Barack Obama is reportedly planning to announce fresh carbon emissions cuts next week, which will allow states to use cap-and-trade regulations to force the coal industry pay for the pollution it generates.

The highly anticipated plan, reports the New York Times, will be the first imposed limits on power plant emissions in the history of the US. It is expected to cut coal plant emanations by up to 20%.

They will also be the most aggressive part of Obama's climate change policy, and a key test to see whether the president and his Environmental Protection Agency (EPA) are able to help curbing greenhouse gas emissions without hurting the country's economy.

The EPA, reports The Wall Street Journal, is expected to finalize the directive by mid-2015 and present a plan to implement the rule by end of the year.

Some states, such as California, already have cap-and-trade schemes. There is also an ongoing regional plan in the Northeast and Mid-Atlantic States of the country. However, the upcoming announcement will open up the strategy to all states.

the 3,000-page rule is more than likely to trigger lawsuits and claims of job losses. It will also prompt Obama critics too claim he has stepped up his dubbed "war on coal."

According to Los Angeles Times, the 3,000-page rule is more than likely to trigger lawsuits and claims of job losses. It will also prompt Obama critics too claim he has stepped up his dubbed "war on coal."

Experts believe that West Virginia will be the hardest hit by the new measures. The state, one of the US's three poorest by household income, sits at the heart of coal country. Official figures also show the state gets 95% of its power from the fossil fuel.

According to environmental group Sierra Club, 165 of the US's 600 coal plants are already set to be closed in the next few years as they cannot comply with toxic metal regulations or beat natural gas, which burns more cleanly.


Halved since 2011, EPA rules to push coal price down another 20%

Frik Els

Mining.com

4 June 2014

The International Energy Agency's latest forecast of energy trends for the next 20 years forecasts a significant fall in the share of fossil fuels in the global energy mix.

Nevertheless to meet the world's energy demands through 2035, the cumulative investment in coal mining amounts to $735 billion, with a further $300 billion needed in transportation infrastructure, mainly railways.

This over $1 trillion investment needed does not include the actual mining operation nor the costs of transporting the coal, which typically account for a large share of the delivered cost of coal.

Investment in coal supply is much less expensive per equivalent unit of output than oil or gas and power-hungry China will be responsible for 40% of the world's investment in coal mining over the next couple of decades.

The outlook in the US is very different.

New legislation by the US Environmental Protection Agency announced this week virtually impossible to build new coal power plants in the country without carbon capture and sequestration (CSS) technology.

It's noteworthy that the IEA figures takes into account the widespread adoption of CSS, an expensive and unproven technology, over the time period of its forecast.

A new research note from Capital Economics says the EPA's new rules designed to curb US emissions of carbon dioxide from the power sector by as much as 30% from 2005 levels by 2030, will reduce the demand for coal and put downward pressure on prices.

In addition, 15% of existing US coal burning capacity is due to be shut down by 2016 under the new rules

Over 90% of US coal is used for electricity generation, so even a small reduction in demand could have a large impact on prices. In addition, 15% of existing US coal burning capacity is due to be shut down by 2016 under the new rules:

"Even before being passed, the EPA's legislation proposed in September has already effectively prevented new coal fired power plants from being built, as investors are unwilling to back a plant which may not be able to adhere to any new regulations.

"Higher gas prices in the US over the last year have encouraged power plants to burn more coal and less gas, supporting coal prices. These regulations are likely to remove that support, even with higher gas prices, as clean burning gas is seen as the only feasible way to meet the new standards."

From a pre-financial crisis peak of more than $190 a tonne, steam coal fell to $65 late by March 2009. The recovery was swift with prices more than doubling by January 2011 at more than $140.

Since then the international thermal coal prices have been on a steady decline averaging $75 in May. Capital Economics sees the price falling to $60 a tonne by end of next year.

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