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EPA Settlement Foreshadows Upcoming Battle On Regulation of Greenhouse Gas Emissions From 500 Existing Power Plants

Settlement Comes As New Obama EPA Administrator To Face Confirmation

Victory for Sierra Club’s Beyond Coal Campaign – 142 Coal Plants Shut Down Thus Far

But Can A “New Source Review” Strategy Do The Job and Shut Down Dinosaur Coal Plants?

“”The closures would reduce AEP’s emissions by 84,000 tons of sulphur dioxide per year plus 12 million tons of carbon dioxide, a key global warming gas, the parties announced.”

The three coal-fired plants are “dirty and outdated plants that should have been cleaned up or retired decades ago,” said Shannon Fisk, an attorney for the Sierra Club. “We’re glad AEP is going to retire these aging dinosaurs.”  Akron Beacon, AEP to stop burning coal at Ohio coal-fired power plant, two others under revised clean-air agreement  (2/26/13)

EPA just announced a modified settlement with major midwestern coal power plants.

COLUMBUS, Ohio, February 25, 2013 (ENS) – The U.S. EPA, eight states and 13 citizens groups have reached an agreement with American Electric Power that requires the nation’s largest power company to cut air pollution at 16 of its coal-fired power plants across the Midwest and South.

The settlement comes in a lawsuit originally filed in a federal court in Ohio in 1999 and is a modification of a prior 2007 settlement in a federal-multistate air pollution lawsuit.

Is it a good deal? What does it mean?

Will it serve as a model for EPA’s upcoming regulatory strategy to existing power plants?

(with modest GHG emissions reductions, trade-offs, economic benefits for polluters, compliance delays, and 200 MW of renewable energy, it surely smells a lot like the kind of compromise presented in NRDC’s December Report. NRDC suggested that their Report was the template for EPA regulation)

Yes, the EPA’s proposed modified settlement with midwestern coal power plants will reduce current pollution emissions.

But the pollutant reductions under the settlement are:

• actually LESS than the original prior 2007 settlement agreement; 
• will save the polluter over $1 BILLION in compliance cost under the 2007 settlement; and 
• allows 43 other units at 16 other dinosaur coal plants to continue operating and delay retirement for an even longer period of time. 

The environmental benefits of the deal involve two things:

1) traditional SOx, NOx, and PM pollutant emissions reductions are lower, but they will come earlier; and

2) greenhouse gas emissions benefits: 3 coal plants will be shut down or switch fuel to allegedly less carbon intensive natural gas, leading to an estimated 12 million tons in CO2 emissions reductions.

So, in evaluating the merits of the revised settlement, the first question becomes:

Is a 12 million ton CO2 reduction from those 3 units – with a $1 billion windfall savings to the polluter – worth allowing 43 other dinosaur coal units to continue massive GHG emissions and to delay retirement for another generation?

Has this question been framed in news accounts?

From a Quick Google, it is apparent that news reports in the northeastern states involved in the settlement have focused almost exclusively on the alleged reductions in traditional pollutants, SOx, NOx and paticulate matter (e.g. typical story from NJ:  N.J. to get $700,000 in pollution deal)

Those news reports sharply contrast with other states, particularly the coal states, where the deal is perceived as a threat to coal and coverage leads with the shutdown of the coal plants (e.g. typical story from Ohio:. American Electric Power to stop burning coal

And virtually all news reports – regardless of geography – , like Governor Christie’s press release, make no mention of the climate change and GHG emissions/existing power plant elephants in the room.

Obviously, Gov. Christie has an incentive to dodge the climate implications of the settlement, given his horrible record on climate change.

So, the real significance of the EPA settlement is being downplayed or ignored – both on its comparative merits viz a vis the 2007 Settlement and for its larger climate change context.

The larger context – those climate change elephants in the room – are

• the upcoming EPA regulatory strategy for greenhouse gas emissions from 500 existing power plants; and
• how this settlement plays out in the confirmation battle over Obama’s new EPA Administrator
• how this settlement is received by the new “Climate Movement” – Bill McKibben’s Keystone XL Campaign

EPA GHG Regulatory Strategy in Obama’s Second Term

Will EPA rely on the same “modest” GHG regulatory strategy announced in Obama’s first term, a strategy that assumed that the real significant GHG reductions would come from a cap/trade program enacted by Congress?

Politically, by design, that “modest” EPA regulatory strategy was intended to be a small bore, incremental, low cost program to avoid alienating industry and Republicans in the hope of cultivating bi-partisan support for a cap & trade bill in Congress.

But, now that Congress has rejected cap/trade, Tea Party climate denial Republicans control the House,  and the recently announced Sanders/Boxer “fee/rebate” “Gold Standard” climate bill in the US Senate has little support, the question becomes:

will EPA retain the Obama first term “modest” regulatory strategy in light of no chance for Congressional action?

Or will EPA go large?

This settlement sheds both regulatory and political light on that question and is a signal of the upcoming battle over GHG emissions from over 500 existing power plants.

I)  Background

Technically, the EPA Revised Settlement involves a Clean Air Act “New Source Review” enforcement case that began way back in 1999, when EPA filed enforcement complaints on November 3, 1999. In that complaint, EPA alleged that AEP:

made major modifications to major emitting facilities, and failed to obtain the necessary permits and install the controls necessary under the Act to reduce sulfur dioxide, nitrogen oxides, and/or particulate matter emissions, and further alleged that such emissions damage human health and the environment;

That initial enforcement case resulted in a December 10, 2007 Settlement Agreement, that the Justice Department and US EPA called the largest ever.

(Eight northeastern states, including NJ, intervened in December 1999 – that was during the Whitman Administration, so current Gov. Christie is taking credit for the work of his predecessors, not his Administration)

Technically, the primary regulated pollutants of concern in the case are Sox, NOx and PM (particulates), which adversely impact public health and ecosystems.

But the most significant pollutant of concern is CO2 – and greenhouse gas (GHG) emissions that contribute to climate change – is not part of the settlement.

The EPA regulatory strategy for GHG emissions reductions from over 500 existing power plants will rely on the same provision of the Clean Air Act that has been used for these NSR enforcement cases that have dragged on for years.

This real issue this case brings into question is whether the current EPA NSR regulatory strategy can effectively reduce GHG emissions from over 500 existing coal power plants.  

We don’t think so.

More to follow on that in future posts (until then, see:

• Can Obama Deliver on Climate Change Rhetoric?
• Obama Seeks To Revive Cap and Trade Legislation (Not Really, That’s Just Cover)

II)  New EPA Administrator’s Confirmation

The next elephant in the room is how this settlement will impact the confirmation debate for Obama’s second term EPA Administrator.

Of course, legislators from coal producing and coal burning states will see this as another example of Obama’s “War on Coal” (despite the fact that it shuts or forces refueling of just 3 of 46 coal units).

Environmentalists are likely to exaggerate the implications (despite the fact that it shuts or forces refueling of just 3 of 46 coal units).

Will the new EPA candidate duck this fight?

Will beltway environmentalists play it straight and honestly present the implications? (see Sierra Club’s “Beyond Coal” campaign)

How will the newly emergent “Climate Movement”  respond to this set of regulatory and political issues?

Stay tuned.