CEI Comments on EPA's Review of its Carbon Dioxide (CO2) Performance Standards for New Coal-fired Power Plants

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Thank you for the opportunity to comment on the Environmental Protection Agency’s (EPA) review of its carbon dioxide (CO2) performance standards for new coal-fired power plants.1 The Competitive Enterprise Institute (CEI) strongly supports EPA’s proposed revisions of the standards and the analysis—the best system of emission reduction (BSER) determination—on which the standards are based.

I. Introduction EPA sets emission performance standards for new (future) sources in numerous industrial categories under Section 111 of the Clean Air Act. Such standards are to reflect “the degree of emission limitation achievable through the application of the best system of emission reduction which (taking into account the cost of achieving such reduction and any non-air quality health and environmental impact and energy requirements) the Administrator determines has been adequately demonstrated.” Under the Obama administration, EPA determined that partial carbon capture and storage (CCS) is the best system of emission reduction for CO2 emitted by new coal power plants. Based on that determination, EPA required new units to meet an emission performance standard of 1,400 lbs. CO2/MWh.2 In the present rulemaking, EPA proposes to revise its BSER determination and the associated performance standards. EPA finds that partial CCS is too costly and geographically limited to be the adequately demonstrated BSER. Instead, EPA proposes to determine that BSER is “the most efficient demonstrated steam cycle (e.g. supercritical steam conditions for large units and subcritical steam conditions for small units) in combination with the best operating practices.” Based on that determination, EPA proposes to set performance standards of 1,900 lbs. CO2/MWh for new large coal power plants, 2,000 lbs. CO2/MWh for new small units, and 2,200 lbs. CO2/MWh for new coal refuse-fired units.3

II: Overview of Key Points

1. EPA is correct: Partial carbon capture and storage is too costly and geographically limited to provide uniform (industry-wide) performance standards for new coal power plants.

2. EPA’s October 2015 final rule is a de facto ban on investment in new coal generation—a policy Congress never authorized and would reject if put to a vote. EPA’s proposed revisions will both repair a breech in the separation of powers and help keep electricity prices affordable for consumers.

3. Although EPA’s 2014 and 2012 proposed rules are not the focus of the current rulemaking, those actions are relevant to the larger policy discussion. The 2015 standard evolved from more aggressive proposals that are inexplicable apart from an unlawful ambition to kill the future of coal-based power.

4. EPA’s review of D.C. Circuit Court of Appeals case law should include additional discussion of National Lime Association v. EPA. Lime’s ruling that new source standards must be “achievable” in all parts of the country strengthens EPA’s argument that CCS is not an appropriate BSER because its water-intensity makes it prohibitively expensive in arid regions.

5. Another geographic constraint, although not discussed by EPA, may be even more critical. Only two utility-scale commercial CCS power plants exist in the entire world. Selling CO2 to nearby enhanced oil recovery (EOR) projects is central to their business plans. Only eleven states have EOR projects.

6. EPA should review whether CCS in commercial practice—that is, in partnership with EOR—is a bona system of emission reduction. National Energy Technology Laboratory (NETL) estimates indicate that the combination of CCS and EOR emits 1.4-2.6 times more CO2 than a conventional coal power plant. III: Carbon capture and storage is too costly to qualify as an adequately

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Re: Docket ID No. EPA-HQ-OAR-2013-0495; Review of Standards of Performance for Greenhouse Gas Emissions from New, Modified, and Reconstructed Stationary Sources: Electric Utility Generating Units; 83 FR 65424

Marlo Lewis, Jr.