Share

POLITICS: PennAve

Natural gas, not location, key to state emissions cuts under EPA proposal

By |
Climate Change,EPA,PennAve,Energy and Environment,Coal,Zack Colman,Electricity,Greenhouse Gases,Power Plants

At first blush, it's a head-scratcher — how could Washington, a state known for its hydroelectric power and greenery, be expected to slash nearly 72 percent of its carbon emissions when North Dakota needs to cut only 10.6 percent?

When it comes to the Environmental Protection Agency's proposed rule for reducing carbon emissions from power plants, which seeks reductions 30 percent below 2005 levels by 2030, not everything is as it seems. The steepest proposed emissions cuts weren't based on region or coal dependency as much as they were on the ability to squeeze more out of natural gas generators.

The EPA used a methodology that relies on four basic categories, but hinges heavily on the second — the amount of natural gas that each state has the capacity to generate. While states lacking natural gas generation would be asked to curtail emissions less under the proposed rule, which is scheduled to be finalized in June 2015, that doesn't necessarily mean those states caught a break.

"In states where that's not feasible, you're going to see a lot less of a target," said Kyle Aarons, a senior fellow with the Center for Climate and Energy Solutions. "But that doesn't mean the state has it any easier. They just have to take more advantage of those other blocks."

The EPA first assumed that all coal-fired power could achieve a 6 percent improvement in efficiency, though some utilities have said that's a lofty goal. Next, it projected states would ideally ramp up to a 70 percent utilization rate of natural gas generators as coal-fired power comes offline. Then it projected renewable energy potential based on regional historical trends. Finally, it assumed a 1 to 1.5 percent annual increase in energy-efficiency improvements beyond the power plant between 2020 and 2030. States with nuclear power generation received a 6 percent credit as an incentive to prevent early retirements of plants facing economic headwinds.

In Washington's case, the EPA was operating knowing that the state plans to shutter its last coal-fired facility, located in Centralia, by 2025. Considering the state already produced the fifth-fewest emissions in 2012 under the EPA's formula, shutting down the Centralia power plant will do a bulk of the state's heavy lifting.

North Dakota, though, doesn't have much natural gas capacity, and its coal-fired power plants are newer — getting a 6 percent bump in efficiency is unlikely. Instead, it probably will rely on a mix of additional renewable energy capacity and measures to improve energy efficiency at the consumer level, said Michael J. Bradley, an energy and environmental consultant. The same is true of coal-producing states such as Kentucky, West Virginia and Wyoming.

States wouldn't have to pursue the measurements in each category as calculated by the EPA, though the agency has final say on the implementation plans states must complete beginning in June 2017. They could choose to add more renewables instead of focusing on energy efficiency — that might be prudent anyway, some experts said, reflecting a belief that the EPA might have been a bit rosy in its energy-efficiency projections.

Renewable energy is likely where the bickering will be loudest, experts said, as that will become a key component for states that can't readily transition to natural gas. There also will be a lot of peeking into neighbors' yards — Mark DeLaquil, a partner at Baker Hostetler, noted Georgia is likely to wonder aloud why it needs to shave 44 percent from its carbon diet when Alabama needs to shed under 27 percent.

But while conservative groups, industry and Republicans have suggested coal- and industry-heavy regions like the Southeast, Midwest and Appalachia would shoulder an inordinate burden, experts said that doesn't appear to be the case, though they said it's too early to tell if the proposed cuts would have any effect on electricity prices.

"I had the same expectations coming into this," Bradley said. He looked toward Southern Co., the largest utility operating in the South that had been synonymous with coal until it started gobbling up natural gas generation in recent years — natural gas and oil now supply 45 percent of its power. "They seem to be conveying a message that they're very well positioned to handle further reductions."

The emissions targets should put to rest the "perception of the Southeast as being the bastion of coal," DeLaquil said, emphasizing the amount of natural gas in the region that was reflected in EPA's calculation. The Midwest, already rich in wind energy and home to several states with renewable electricity mandates, also does fairly well on the renewable energy portion of the EPA's calculation.

Some states have easier paths to their reductions than it appears. The EPA assumed large reactors under construction in Georgia, South Carolina and Tennessee would start operating, which would take care of a significant chunk of the respective 44, 51 and 39 percent emissions reductions they must achieve.

The nine Northeast and Mid-Atlantic states that comprise the Regional Greenhouse Gas Initiative, a cap-and-trade scheme known as "RGGI," likely are already close to having a plan that meets the EPA's approval. That's made the program attractive to other states as well. Tom Wolf, the Democratic gubernatorial candidate in Pennsylvania has pledged to join it.

"If you're in RGGI you're probably close to in compliance with the law just by tweaking your program," said Brendan Collins, a partner in the environmental and natural resources practice with Ballard Spahr LLP. "They're probably going to wind up in the same place that the rule makes them go."

View article comments Leave a comment
Author:

Zack Colman

Staff Writer
The Washington Examiner