Photo by SNVV, Deposit Photos
Earlier this year, the Environmental Protection Agency (EPA) announced new rules that aim to eliminate carbon dioxide emissions from the nation’s electricity sector by 2040. Many in the energy industry are now warning that that may not be a great idea and could “destroy the grid”.
In May, the EPA under President Biden announced new rules that would cut carbon dioxide emissions from existing power plants by 2040, as well as set limits for new gas-fired combustion turbines, existing coal, oil and gas-fired steam generating units, and certain existing gas-fired combustion turbines.
The EPA announced “Consistent with EPA’s traditional approach to establishing pollution standards for power plants under section 111 of the Clean Air Act, the proposed standards are based on technologies such as carbon capture and sequestration/storage (CCS), low-GHG hydrogen co-firing, and natural gas co-firing, which can be applied directly to power plants that use fossil fuels to generate electricity.”
“As laid out in section 111 of the Clean Air Act, the proposed new source performance standards (NSPS) and emission guidelines reflect the application of the best system of emission reduction (BSER) that, taking into account costs, energy requirements, and other statutory factors, is adequately demonstrated for the purpose of improving the emissions performance of the covered electric generating units”, the EPA’s website reads.
The World Resources Institute notes that “The power sector accounts for a quarter of the greenhouse gas emissions in the United States and is responsible for toxic air pollution that disproportionately affects disadvantaged communities.”
Dan Lashof, U.S. Director of the World Resources Institute, said in May that “The EPA’s proposed rule sends an unequivocal signal to American power plant operators: the era of unlimited carbon pollution is over.”
Many in the energy sector are concerned, however, that the rapid shift away from fossil fuels could cripple the industry and “destoy the grid”. Last week, they warned that the new rules from the EPA are “unworkable” and that the proposal relies “too heavily on costly technologies that are not yet proven at scale.”
The Center of the American Experiment (CAE) warned last week that the EPA’s new rules would “cause massive rolling blackouts in the Midwest” and warned that preventing these blackouts would cost the industry another $246 billion through 2055 due to the new regulations.
The $246 billion breaks down to $7.7 billion annually on average through 2055, a number which is greated than the EPA’s projected $5.9 billion annual benefit to the entire country if the proppsals are finalized.
The CAE said that the “EPA only examined the difference between the Post IRA Base Case and the impact of the regulations, which it claims are small. In doing so, EPA committed the regulatory equivalent of studying the structural integrity of the top floor of a 100-story building without doing so for the preceding 99 floors.”
The EPA “does not appear to have the expertise necessary to enact such a sweeping regulation on the American power sector,” CAE wrote in its comments.
The Edison Electric Institute, a leading trade group for U.S. energy companies, also filed comments in response to the EPA’s proposals this week, highlighting that the EPA’s assertion that the efficacy of hydrogen blending and CCS has been adequately demonstrated is legally insufficient.
Two of the “proven” technologies cited by the EPA in its proposal are CCS and hydrogen blending. A majority of CCS projects have underperformed or failed across the world, according to a 2022 report by the Institute for Energy Economics and Financial Analysis, while hydrogen blending is a technique that is neither completely safe nor effective, according to a 2022 report by the Pipeline Safety Trust.
Mark Christie, a top official for the Federal Energy Regulatory Commission (FERC) warned in June that “catastrophic consequences” could await the U.S. if the premature retirement of fossil fuel-fired power plants continues before green energy alternatives are ready to supply large amounts of power to the grid.