Trump Makes His Biggest Move Yet to Try to Save Coal Plants

Source: By Jennifer A Dlouhy, Bloomberg • Posted: Friday, June 21, 2019

Yet the Environmental Protection Agency’s rewrite of the Clean Power Plan, which was signed Wednesday in Washington, will do little to halt a nationwide shift away from coal and toward cheaper electricity generated by wind, sun and natural gas.

EPA Administrator Andrew Wheeler said the policy change would remove the “heavy hand” of government from meddling in the power sector, creating an opening for companies to build new coal plants.

“I don’t know who is going to invest in a coal-fired power plant, but we’re leveling the playing field to allow that investment to occur,” Wheeler told reporters at the agency’s headquarters after an event with industry lobbyists, conservative activists and coal miners. The new rule “will continue our nation’s environmental progress, and it will do so legally and with proper respect for the states,” he said.

The EPA’s final “Affordable Clean Energy” cuts carbon dioxide emissions by encouraging efficiency upgrades at individual power plants, replacing an Obama-era approach of driving wholesale changes to the power sector. The final rule empowers states to develop performance standards for plants based on assumptions about the kind of efficiency gains — known as heat-rate improvements — that can be eked out by plugging duct leaks, installing advanced soot blowers and making other upgrades at the sites. State regulators also will be able to consider the age and remaining useful life of power plants in tailoring requirements for individual facilities.

Read more: Trump to Swap Obama’s ‘Clean Power Plan’ for Modest Upgrades

The measure that the Trump administration is replacing — former President Barack Obama’s Clean Power Plan — aimed to drive broader changes in the U.S. electric mix and threatened to spur a wave of coal plant closures. That measure compelled states to make systemwide changes in the name of cutting emissions, from bolstering energy efficiency and adding renewables to shutting coal-fired plants altogether and even displacing natural gas.

Even though the Clean Power Plan never went into effect, having been halted by the Supreme Court in February 2016, the U.S. is on track to meet its original goals of reducing greenhouse gas emissions 32% from 2005 levels by 2030. Those declines have come as state regulations spurred utilities to adopt more renewable wind and solar power and the lower cost of natural gas encouraged a shift toward that fossil fuel.

The U.S. is experiencing “a wave of coal retirements — and we don’t think we’re near the end of it,” said Nicholas Steckler, head of U.S. power for BloombergNEF. “Coal is inferior to natural gas in many ways today — it’s less flexible, it’s higher cost, even its fuel is generally more expensive, and, of course, it’s dirty. It has so many reasons stacked against it.”

Some 65 gigawatts of coal-fired electric generating capacity have gone offline since 2011 — with another 41 gigawatts pending retirement and 105 gigawatts at risk of closure, according to BloombergNEF.

Environmentalists and New York Attorney General Letitia James have vowed to battle Trump’s replacement rule in federal court, arguing the EPA is shirking its responsibility to protect public health and the environment. The power plant measure comes as the agency separately moves to ease rules curbing greenhouse gas emissions from automobiles and oil wells.

For States, EPA Climate Rule Means More Work: Bloomberg Law

The rule is “an unlawful life-extension program for coal plants masquerading as a climate rule,” said Conrad Schneider, advocacy director for the Clean Air Task Force, an environmental advocacy group. “The ACE rule simply checks the box of a Trump campaign promise in a futile attempt to save the coal industry by calling for investments in old, dirty coal plants that will run harder and longer, resulting in increased pollution.”

The agency had predicted its initial plan would unleash more particulate matter pollution, or soot, and the asthma attacks, respiratory diseases and premature deaths tied to it. The EPA said Wednesday that its final rule is projected to reduce carbon dioxide emissions in 2030 by about 11 million short tons over what would happen without the Clean Power Plan in place.

Industry advocates say the Trump administration is curbing federal government overreach and leveling the playing field.

“It won’t necessarily be the saving grace for coal,” but “this regulation gives coal a fighting chance,” said Nick Loris, an economist with the Heritage Foundation. The EPA is following the rule of law and removing “government-imposed barriers that will lead to increased innovation, competition and efficiency that will ultimately drive down pollution.”

The EPA’s new approach is rooted in Clean Power Plan foes’ arguments that the agency does not have legal authority to regulate emissions beyond the boundaries of existing plants. In some cases, efficiency gains spurred by the new rule could encourage utilities to run their coal power plants more often, undercutting the potential environmental benefits and actually leading to more emissions at the sites.

Improvements required under the final rule should “enhance” the effectiveness of coal plants, allowing them to generate power more efficiently and produce more of it, said Michelle Bloodworth, president of the American Council for Clean Coal Electricity.

Read More: Former Environmental Chiefs Blast EPA’s Retreat Under Trump

Wheeler said the final power plant rule “will incentivize new technologies that ensure coal plants can be part of a cleaner future.” However, companies will not be given credit under the rule for adopting carbon-capture technologies.

On the campaign trail in 2016, Trump promised to revive the coal industry and restore mining jobs — a message that resonated with the working-class voters who helped elect him. In coal-rich West Virginia, a once reliably Democratic state, Trump won 68% of the vote.

The Clean Power Plan rewrite is the Trump administration’s most tangible move to deliver on that promise, though the EPA has also proposed lifting a de facto requirement that any new coal power plants be built with expensive carbon-capture technology. The agency also has proposed that limits on mercury pollution from power plants are no longer “appropriate and necessary.”

Trump Lifting Hurdle to Coal Plants No One Wants to Clear

The EPA is delaying action on a separate plan that would have made it easier for companies to modernize power plants without triggering requirements for costly pollution control systems. Wheeler said that change will come later, as the EPA works to overhaul its so-called New Source Review program governing pollution controls at power plants and industrial facilities.

(Michael R. Bloomberg, founder and majority owner of Bloomberg News parent Bloomberg LP, financially supports the Sierra Club’s Beyond Coal campaign, which seeks to retire U.S. coal-fired plants.)

— With assistance by Jim Efstathiou Jr