EPA is trying to cast its toughest-ever climate rule for power plants as a routine regulation — and it hopes the Supreme Court will agree.
The fate of the pollution standards depends on the Biden administration’s ability to persuade the high court that they fall within the long-established bounds of EPA’s Clean Air Act authority. Otherwise, the new rule — which covers new gas- and existing coal-fired power — may never take effect, as happened with two prior power plant carbon rules under two previous administrations.
The agency and its supporters began laying the groundwork for the rule’s legal defense long before it was printed in the Federal Register last week. In op-eds and interviews — and in the rule’s preamble itself — they’ve emphasized that the rule shares DNA with past power plant regulations drafted under presidents of both parties.
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“This is a very much a standard-issue methodology,” said EPA air chief Joe Goffman, speaking on a Resources for the Future webinar earlier this month.
EPA regulators used the same Clean Air Act provision, known as section 111, to curb sulfur dioxide in 1971 and mercury in 2012 — and would “instantly recognize what we did here,” Goffman said.
Specifically, the agency based its rule on the steps individual power plants can take to slash pollution — in this case, planet-warming greenhouse gases.
For new natural gas plants that only provide the grid with back-up power, that means efficient design. For coal units that retire by 2039 — but not before 2032 — it means burning gas alongside coal to reduce overall emissions.
But for new gas plants that run often to provide “baseload” power and coal plants slated to operate for decades, the rule sets standards based on capturing most of their carbon at the smokestack and storing it permanently. The standard would kick in in 2032.
Section 111 doesn’t allow EPA to mandate the use of technologies. Instead, EPA uses them to set emissions performance standards that states and industry can choose to meet in other ways. EPA’s rule suggests some gas plants will burn hydrogen at levels consistent with capturing carbon, for example, though it doesn’t expect many to do that.
The standards are strict, especially for baseload power. They push the envelope technologically.
But where the Obama EPA looked for carbon abatement opportunities throughout the U.S. power grid, the Biden rule plays it safer legally. The Biden administration is trying to avoid the fate of the Obama Clean Power Plan, which was suspended and then shot down by the U.S. Supreme Court. That left the country’s second-highest emitting sector unregulated for carbon for another decade.
The new rule aims to make a significant down payment on President Joe Biden’s goal of a carbon-free power grid by 2035. But industry and state challenges are already piling up.
EPA officials say they followed the Supreme Court’s guidance in its 2022 West Virginia v. EPA decision by basing its rule on “more traditional air pollution control measures,” including efficiency, “fuel-switching” and “add-on controls.”
Goffman — who served as senior attorney for the air office in the Obama EPA — has advocated for these kinds of legally conservative, technologically aggressive standards since before he returned to EPA under Biden.
But the strategy will succeed only if EPA can prove it based the rule on control options that are ready for prime time, and that track with the kinds of measures EPA has prescribed in the past to limit other kinds of power plant pollution.
“We determined that CCS was consistent with the statute, consistent with decades of our practice,” Goffman said.
EPA’s carbon rule points out that for decades EPA has required coal-fired power plants to install and operate scrubbers to limit sulfur dioxide pollution.
“The facts that the EPA required these controls in prior rules, and that many [electric generating units] subsequently installed and operated these controls, provide evidence that these costs are reasonable, and as a result, the cost of these controls provides a benchmark to assess the reasonableness of the costs of the controls in this preamble,” the rule states.
EPA allies in the environmental community say the rule has strong parallels with the agency’s sulfur dioxide (SO2) program dating back to the 1970s. Under former Presidents Richard Nixon and Jimmy Carter, EPA based its acid rain programs on then-nascent scrubber technology that was far less commercially available at the time, they say, than carbon capture is now.
Scrubbers and the Nixon rule
When the Nixon EPA proposed its 1971 standard for new coal plants based on post-combustion sulfur scrubbers, there were only three such systems in use at power plants in the United States. The agency gave utilities an alternative: they could instead burn low-sulfur coal.
Neither option was simple. Low-sulfur coal was almost never used in the Eastern United States. Shipping it there from mines in states like Montana and Wyoming required a railroad build-out and resulted in the closure of coal mines back east.
Meanwhile, sulfur scrubbers were a new technology that produced sludge that had to be managed. American Electric Power took out a full-page ad in The New York Times in 1974 to oppose the rule, warning that scrubbers could cover large swaths of the American landscape in “oozy gook.”
David Hawkins, a senior attorney on energy and climate at the Natural Resources Defense Council, worked for the green group during the legal skirmishes of the 1970s over EPA’s sulfur regulations.
The first scrubbers didn’t work terribly well, he said. They were “sloppy, he said, and “constantly broke down.”
“When I went to work at EPA in 1977, there were still only a handful of new power plants that had been built since 1971,” Hawkins said. “And the ones that had scrubbers were having trouble running them adequately.”
Hawkins said EPA officials came to realize that running the scrubbers was “the loser job in the power plant,” assigned to the least experienced staff.
Still, EPA had the record it needed to select scrubbers and low-sulfur coal as its dual basis for the sulfur rule, said Hawkins. The technology had been tried and tested by other sectors. And the rules themselves helped make cleaner coal and scrubbers more commercially available by creating markets for them.
Less than a decade after its initial sulfur rule, EPA strengthened the standards to require new coal units to remove between 70 and 90 percent of their sulfur using scrubbers.
The carbon rule could help CCS gain a similar foothold in the power sector — something decades of federal support and incentives have failed to do on their own, Hawkins said.
“The issue is not a technical issue, the issue is lack of economic motivation,” he said. “The record clearly demonstrates that there’s no technical argument that this chemical solution that works to take CO2 out of other dirty industrial exhaust gases won’t work in power plants.”
NRDC and the Clean Air Task Force filed joint comments to EPA last year noting that courts sided with EPA against industry charges in the 1970s that scrubbers weren’t “adequately demonstrated,” as the Clean Air Act demands. The groups told EPA that the high court still seemed to hold the same view; in its 2022 West Virginia decision, the court cited a 2005 EPA rule based on “wet scrubbers” as the kind of “traditional” pollution control it found acceptable.
John Thompson, technology and markets director at the Clean Air Task Force, said the utilities that choose to comply with EPA’s rule by capturing emissions could draw on their experience with sulfur scrubbers.
“We didn’t have chemical engineers sitting at power plants in the 1970s,” said Thompson, who campaigned to install scrubbers at a coal plant owned by University of Illinois as a chemical engineering undergraduate in the early 1980s.
“Power plant personnel know how to do this now,” he said. “They know how to run chemical systems. They have the expertise at the site.”
CCS, like scrubbers in the 1970s, has had limited application at U.S. commercial power plants, though it has been used at ethanol and natural gas processing facilities. One power plant in Texas — the Petra Nova project — was designed to capture carbon above the levels EPA’s rule requires. But its record of actually running at the 92 percent capture rate has been spotty.
Economics and commercialization
Steve Winberg, who served as assistant secretary of fossil energy at the Department of Energy during the Trump administration, acknowledged that CCS is technologically sound.
But he cited commercial and economic obstacles that he said meant EPA’s standard would likely result in a wave of coal plant retirements that would undermine grid reliability.
While costs of carbon capture are declining, he said, CCS also involves transmission and storage requirements that aren’t associated with sulfur scrubbers. While utilities can easily find contractors to handle all aspects of a scrubber installation, he said, “finding one company that will do the entire [CCS] project is more difficult.”
For the Petra Nova project, NRG Energy relied on a small “consortium” of four contractors, including in-house staff, to oversee engineering, procurement and construction of the facility, according to a 2020 scientific and technical report to DOE.
Winberg also pointed to permitting for transmission and for so-called Class VI injection sites where carbon is permanently stored underground. For most states, EPA remains the permitting authority for carbon sequestration sites, and it has been criticized for its backlog of applications. Two permits issued earlier this year were the first in nearly a decade.
“So EPA comes out with a regulation that they know is going to be extremely difficult to implement in the timeframe that they want it to be implemented,” Winberg said. “And they’ve got control over a big part of implementing CCS. And that’s the permitting of the Class VI wells. And they’re dragging their feet on that.”
“My very strong view is that EPA is trying to meet the Biden administration goal of shutting coal plants down,” Winberg added.
Susan Hovorka, a senior research scientist at the Gulf Coast Carbon Center at the University of Texas, Austin, disputed that permitting for infrastructure and storage would be a major barrier to deployment of CCS.
She said EPA and the three states that have taken over permitting for CO2 injection sites — North Dakota, Wyoming and Louisiana — are ascending a steep learning curve.
“As the state’s gain primacy, there are more cooks in the kitchen and projects will be served more rapidly,” she said.
But U.S. coal generation is already in sharp decline, dropping 60 percent from its peak in 2007. Right now, all but 80 gigawatts of U.S. coal generation is committed to retire by 2040.
EPA projects that even without its carbon rule, only 42 GW of coal generation would actually still be running by 2040. The rule would put the final nail in the coffin: under the new standards, EPA expects 18 GW of coal-fired power operating with CCS in 2040, falling to only 1 GW five years later.
