Exorcising power

The EPA recklessly endangers U.S. electricity generation.

In April, the Environmental Protection Agency (EPA) signed coal’s death warrant. The final rule, imposed under the authority of the Clean Air Act, is designed to drive coal-fired plants out of service in the name of emissions reductions and impose burdensome regulations on the new natural gas plants needed to replace them. If you already think electricity is expensive and unreliable, buckle up, because it’s going to be a wild ride.  

The EPA’s final rule will force the premature retirement of coal plants, which comprised 23 percent of U.S. electricity generation in 2019. Coal plants that expect to operate beyond 2039 will need to reduce their emissions by 90 percent by 2032 — eight short years away. Coal plants that must shutter by 2039 will still be required to reduce their emissions by 16 percent by 2030.  

This is only achievable if coal plants co-fire 40 percent of the time with natural gas, which requires new or expanded infrastructure in the coal plants. It will also require more natural gas to meet new demand, not less. New natural gas plants also must eliminate 90 percent of their emissions by 2032, but existing natural gas plants have been mercifully spared for now. 

The EPA leaves it to the coal operators to decide how 90 percent emissions reductions will be met. However, the agency expects that plants will comply through carbon capture and sequestration (CCS) technology, which will face many challenges in deploying at scale in a commercial context.  

Only two carbon capture power plants are currently operational in North America — Petra Nova in Texas, and Boundary Dam in Saskatchewan. In Petra Nova’s three years of operations between 2017 and 2020, it ended up capturing only seven percent of the generating station’s total emissions and suffered 367 days of outages. When oil prices dropped in 2020, the project was mothballed but resumed operations in late 2023. This is despite receiving $190 million in U.S. government grants and $250 million from Japan’s government. Boundary Dam has seen similar outages, technical difficulties, and underperformance. 

These projects are the only demonstrations of the experimental technology that the EPA expects every coal-fired plant to install within eight years — or shut down. Taking all bets on how many coal-fired plants will go offline before 2032! (Here’s a hint: The EPA, in its recent regulatory impact analysis, is betting that coal generation will decline 94 percent by 2045 compared to its current policy baseline.)  

Policy choices like these will have consequences for consumers. An analysis by Isaac Orr and Mitch Rolling (familiar names to our readers), who now lead Always On Energy Research, found that the EPA’s final rules continue to make the same devastating mistakes in the proposal, resulting in massive rolling blackouts that would plunge 8.8 million people into darkness in the Midcontinent Independent System Operator (MISO) region.  

“EPA’s final rules are devastating to the Midwest, which has been heavily reliant upon coal-fired power plants to keep the lights on. Thankfully, our analysis was cited by a 27-state coalition led by West Virginia that has sued the federal government to stop the implementation of these dangerous and irresponsible rules,” says Orr.  

The rule could run afoul of the U.S. Supreme Court’s 2022 decision in West Virginia v. EPA. In the case, the court could not find a “clear congressional authorization” for the EPA’s authority to regulate greenhouse gas emissions through generation shifting.  

Does this sound familiar? It should. In that Supreme Court case, the Obama-era Clean Power Plan and the Trump administration’s Affordable Clean Energy rule were in question. The EPA’s new rule attempts to achieve the same goal but claims that the rule regulates emissions from individual plants rather than mandating a specific shift in technologies. 

When asked about the legality of their rule before a panel of senators at the Environment and Public Works Committee hearing, EPA administrator Michael Regan said, “We are not attempting to be cute or step outside the Supreme Court’s ruling.” Never mind that these regulations on “individual” plants will have drastic sector-wide effects that ought to receive clear congressional authorization.  

Another coalition, led by the Competitive Enterprise Institute and includes Center of the American Experiment, has urged Congress to review the rule using its powers under the Congressional Review Act (CRA). The CRA is a powerful tool that can be used to overturn regulations made by executive branch agencies, and the consequences of the EPA’s power plant regulations on the U.S. economy warrants a closer look by Congress.  

Ensuring energy is reliable and affordable ought to be the U.S. government’s priority on this issue; the EPA has no business acting like the nation’s de facto grid manager. Let’s hope this final rule doesn’t push all coal plants off the grid.