The New CO2 Emissions Standards and Coal

As most of our readers know, the Obama administration announced on Tuesday a proposal to limit the amount of carbon dioxide that a new power plant can emit. The rule would disallow power plants from emitting more than 1,000 pounds of CO­2 per megawatt hour of electricity produced (EPA). As it so happens, coal plants typically emit 1,600 lbs of CO­2/mWh, while the average natural gas plant emits 800 lbs of CO­2/mWh (NY Times Editorial). Needless to say if this rule were to pass, the future of coal power would be in serious jeopardy.

            Coal, once the power of choice in America, has been in decline in recent years. The EIA has predicted that coal production will fall to 900 million tons in 2012, a 16 year low (Walsh, Climate Rules). The only new coal plant to be built in the Obama administration is an experimental carbon capture and sequestration plant in Mississippi (Walsh). The current decline of coal however has had less to do with regulations and more with the low price of natural gas, as utilities have begun switching from coal to natural gas (Walsh, War on Coal).

            It seems that unless coal adapts, it will be phased out. One potential answer is using carbon capture and sequestration technology. However, using CCS technology is not currently financially viable, and may not be for a decade or more (The Economist). The coal industry has responded to these new rules by saying that the regulation is a job killer and will expose the U.S. to volatile natural gas prices (Walsh, Climate Rules). Utilities however have hard a largely muted response, pointing out that coal has already been on the decline due to natural gas prices (Walsh).

            Phasing out coal makes good environmental and economic sense. The traditional pollutants released from coal such as mercury and SOx directly affect human health and the environment, while CO­2 indirectly affects the world through global warming. These pollutants are externality costs borne by society. Clean Air Act regulations exist to combat these externalities, and the new CO­2does the same. If coal declines in part to these regulations, it will be because the societal cost of coal is too high to be competitive. As coal declines, capital and labor will shift to from coal to different industries, ultimately helping the economy as a whole.

            While coal power plants may no long be built in the U.S., coal mining will still have a future as an export commodity. Developing nations such as China and India that do not have the same regulations as the U.S. will keep demanding coal, keeping U.S. coal mining alive for the foreseeable future. However, it would not be surprising if by 2050 even these countries have phased out coal due to low natural gas prices and better renewable technology. Ultimately, coal is something society should try and move away from, if possible. It’s simply too dirty in every respect of the word for it to make sense to keep using, in light of other readily available alternatives. 

Citations:

The Economist, Mar. 31, 2012, A Blow to Coal, http://www.economist.com/node/21551545, Accessed Mar. 29, 2012.

Editorial, New Rules for New Power Plants, The New York Times, Mar. 28, 2012, http://www.nytimes.com/2012/03/29/opinion/new-rules-for-new-power-plants.html?_r=1&scp=1&sq=carbon&st=cse, Accessed Mar. 29, 2012.  

EPA: Environmental Protection Agency, Mar. 27, 2012, EPA Proposes First Carbon Pollution Standard for Future Power Plants/Achievable standard is in line with investments already being made and will inform the building of new plants moving forward, http://yosemite.epa.gov/opa/admpress.nsf/bd4379a92ceceeac8525735900400c27/9b4e8033d7e641d9852579ce005ae957!OpenDocument, Accessed Mar. 29, 2012.

Walsh, B., Mar. 27, 2012, Climate Rules: Why Natural Gas Will Be the Big Winner in New Greenhouse Gas Regulations, Ecocentric Blog at Time Online, http://ecocentric.blogs.time.com/2012/03/27/climate-rules-why-natural-gas-will-be-the-big-winner-in-new-greenhouse-gas-regulations/?iid=ec-article-mostpop1, Accessed Mar. 29, 2012.

Walsh, B., Mar. 1, 2012, War on Coal: Why Polluting Plants Are Shutting Down Nationwide, Ecocentric Blog at Time Online, http://ecocentric.blogs.time.com/2012/03/01/war-on-coal-activists-help-shut-down-polluting-plans-in-chicago-and-around-the-u-s/, Accessed Mar. 29, 2012. 

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