If the new regulation from the EPA is approved, it could mean higher energy costs and fossil fuel power plant closures.

Biden’s EPA Rules May Shut Down Fossil Fuel Power Plants

On Thursday, the Environmental Protection Agency (EPA) under President Joe Biden released a proposed set of power plant emissions rules that would significantly impact coal-fired facilities.

The new regulations would mandate that such power plants use carbon capture technology or shut down by 2040.

Large natural gas facilities, deemed “base load,” would be required to either capture 90% of emissions using carbon capture and storage (CCS) by 2035 or convert to burning 96% hydrogen by volume by 2038.

Smaller natural gas-fired plants could comply by using more efficient forms of natural gas.

The Public Has a Review Period

While the public has a review period, this regulation, if approved, would result in higher energy costs and the closure of fossil fuel power plants, according to industry experts.

The EPA predicts that the rule would produce $85 billion in climate and public health benefits by 2042 but cost firms around $14 billion to follow. The EPA expects to see some coal plant retirements; however, the agency stresses that states and businesses have the flexibility to make decisions that suit them best.

The EPA also predicts that the process would result in a small increase in electricity prices by 2030, followed by stabilization by 2040. Coal production for power production would fall by 15% by 2040, while natural gas would decline by 2%, according to EPA estimates.

Coal-fired Plants Could Be in Grave Danger

Coal-fired facilities could escape the stricter emissions standards if they opt to shut down by 2032, while those that shut down by 2040 could comply by producing 40% of their input heat through natural gas burning. The EPA chose not to upgrade standards for new coal units based on CCS because the agency expects “no further new units.”

However, Michelle Bloodworth, president of America’s Power, a coal trade organization, argued that the rule was “designed specifically to cause the premature closure of coal power plants,” which she characterized as “one of our most dependable and affordable sources of electricity.” Former Trump EPA transition advisor Steve Milloy criticized the rule for overstepping the EPA’s bounds under the Clean Air Act (CAA), comparing it to the EPA’s proposed rules restricting tailpipe emissions.

In June 2022, the Supreme Court reduced the EPA’s power to regulate power plant emissions, stating that Congress did not authorize the EPA to take a “generation shifting approach” when developing Obama-era proposed rules under the CAA. Democratic and Republican legal experts disagree about whether the president’s signature climate law, the Inflation Reduction Act (IRA), authorizes the EPA to engage in comparable regulations.

Before the rule was released, Republican Attorney General Patrick Morrisey of West Virginia, who led the lawsuit challenging the Obama-era proposal, indicated that he would contest similar rules from the Biden administration.

Biden has pledged to reduce carbon emissions to 50% of 2005 levels by 2030 and achieve net-zero carbon emissions by 2050 while targeting 100% carbon pollution-free electricity by 2035, according to Axios.

The tailpipe rules and power plant rules are anticipated to be finalized in 2024 at the earliest.

Updated 5/12/23

You can register to attend a webinar on this topic, below is information on how to register:

EPA will host two webinars offering:  an overview of the proposed rules, information on how to effectively engage in the regulatory process, and an opportunity to participate in a Q&A session.  

  • June 6, 2023 at 2:00 PM Eastern Time
  • June 7, 2023 at 5:30 PM Eastern Time: 

Target audience:  Tribal Environmental Professionals, Communities and Organizations with Environmental Justice Concerns  

Register to attend the June 6th webinar.

Register to attend the June 7th webinar. 

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