U.S. carbon emission limit to speed up end of coal age

The Obama administration proposed on Tuesday the first-ever limit on greenhouse gas emissions from new power plants, a move that analysts said would contain construction of coal-fired power stations and accelerate the demise of the coal era.

The U.S. Environmental Protection Agency (EPA) put forward a standard of 1,000 pounds (454 kg) of carbon-dioxide emissions per megawatt-hour, a limit considered to raise electricity prices and filter off coal plants unless they were retrofitted with carbon-capture technology, which was yet neither economically viable nor commercially available.

The limit was calculated so precisely as to shove away only coal-fired facilities from the fleet of power plants. The average U.S. natural gas plant emits 800 to 850 pounds of carbon-dioxide per megawatt-hour, while coal plants emit an average of 1,768 pounds.

Indicating that the Obama administration was in favor of natural gas plants instead of coal ones, this proposal could push coal out of the electricity-generation business if implemented and have sparked protests from the coal industry.

A standard of 1,000 pounds per megawatt-hour for coal plants would "require something that doesn’t exist as a commercial technology," said Vic Svec, a spokesman at Peabody Energy, the largest coal mining company in America.

Although the proposed rule would not apply to existing power plants or new ones built over the next 12 months, utility companies announced that they planned to shut down plants rather than upgrade them with pollution-control technology.

The EPA didn’t understand how hard it was to find skilled workers to install pollution-control equipment, said Nick Akins, CEO of American Electric Power Co., the biggest user of coal in America. Retrofit costs at larger plants could be hundreds of millions of dollars.

"Higher utility bills and fewer jobs are the only certain outcomes from this reckless attempt to override Congress’s repeated refusal to enact punitive caps on carbon dioxide emission." said Hal Quinn, President and CEO of National Mining Association (NMA).

"After Congress refused to pass carbon caps, the administration insisted there were other ways to skin the cat, and this is another way – by setting a standard deliberately calculated to drive affordable coal out of the electricity market," said Luke Popovich, NMA’s mouthpiece.

The EPA rule may strike the last nail on the coffin of coal plants, experts said. As a matter of fact, low natural gas prices had been prompting utilities to shut coal plants at an accelerating pace.

"Inexpensive natural gas is the biggest threat to coal," said Jone-Lin Wang, head of global power research for IHS CERA, an energy research company.

Thanks to a surge in production from shale-rock formations, the United States have seen cheap and abundant natural gas in recent years.

The U.S. wellhead natural gas prices had fallen to 3.14 dollars per thousand cubic feet in December 2011 from the peak of 10.79 dollars in July 2008, according to the Energy Information Administration (EIA). On the contrary, coal prices has jumped an average of 6.7 percent a year in the past decade.

Moving in tandem with the EPA rule, the market forces overshadow the future of coal plants.

"We have in this country 492 coal-fired power plants." said Lester Brown, "106 of them are now scheduled to close this year, next year."

Actually, even if gas prices spike in future, the proposed rule would still ensure a cut in the nation’s carbon output, analysts here said.

Michael Brune, executive director of the Sierra Club, which aims to close all coal-fired power plants in the country, said the new rule "captures the end of an era" during which coal provided most of the nation’s electricity.

For the past decades, coal produced more electricity than all other fuels combined, and as recently as 2003 accounted for almost 51 percent of electricity generation. However, by 2035 coal was expected to generate 39 percent of U.S. electricity, according to the EIA.

The greenhouse-gas rule has been in the works since 2009 when the EPA determined that carbon dioxide was a pollutant that endangered the public under the Clean Air Act.

The rule echoed Obama’s "all-of-the-above" energy policy, in which he proposed to double clean energy investments, including solar power and wind energy, and put an end to four-billion-dollar subsidies given to the oil industry.

The Obama administration also increased fuel-efficiency standards on cars and trucks to an average of about 55 miles per gallon (about 4.28 liters per 100 km) by the year 2025, aiming to save an average family some 8,000 dollars over the life of a car.

Raising emission standards for automobiles, increasing fuel efficiency and closing coal-fired power plants will contribute to the progress "in not only reducing air pollution, in the sense how it affects our health, but also reducing carbon emissions," said Lester Brown, president and founder of Earth Policy Institute, an environmental organization based in Washington DC.

He also noted that "the government for a few decades has been used tax incentives for wind power," as a result states like South Dakota and Iowa got "20 percent of their electricity from wind turbines."