EPA Initiates Review of GHG Standards for New and Modified Power Plants

Date: April 4th, 2017

Explanation: Regulatory action

Agencies: EPA

The Environmental Protection Agency (EPA) published a notice in the Federal Register announcing that it is reviewing and, if appropriate, will initiate proceedings to suspend, revise or rescind the Standards of Performance for Greenhouse Gas Emissions From New, Modified, and Reconstructed Electric Generating Units. EPA is reviewing the rule pursuant to President Trump’s Executive Order on Promoting Energy Independence and Economic Growth. The notice states that EPA will consider the following issues in its review:

• Whether the rule and alternative approaches are appropriately grounded in EPA’s statutory authority and consistent with the rule of law
• Whether the rule or alternative approaches would appropriately promote cooperative federalism and respect the authority and powers that are reserved to the states
• Whether the rule and alternative approaches effect the Administration’s dual goals of protecting public health and welfare while also supporting economic growth and job creation
• Whether the rule or alternative approaches appropriately maintain the diversity of reliable energy resources and encourage the production of domestic energy sources to achieve energy independence and security
• Whether the rule and alternative approaches will provide benefits that substantially exceed their costs

New Source Performance Standards for GHG Emissions from Electric Generating Units

The Clean Air Act requires EPA to establish new source performance standards (NSPS) for new and modified stationary emission sources that cause air pollution that may endanger public health or welfare. In December 2010, EPA entered into a settlement agreement to establish NSPS for GHG emissions from  electric generating units.

In April 2012, EPA proposed NSPS for carbon dioxide emissions from new fossil fuel-fired power plants. The proposed standards under section 111(a) of the Clean Air Act were based on the ‘‘best system of emission reduction’’ (BSER) that EPA had determined to be adequately demonstrated for the emissions source. In January 2014, EPA published its withdrawal of the proposal, followed by a new proposed rule with separate standards for modern natural gas plants (combined-cycle) and other facilities, chiefly coal-fired plants. In June 2014, EPA proposed carbon dioxide emission standards for modified and reconstructed power plants. As with new plants, EPA proposed separate standards for gas- and coal-fired facilities.

In October 2015, EPA published a final rule establishing NSPS for carbon dioxide emissions for both new and modified power plants. For new and reconstructed gas-fired plants, under the BSER standard, EPA set the emission limit at 1,000 pounds of CO2 per megawatt‐hour on a gross‐output basis (lb CO2/MWh‐gross). EPA declined to issue standards for modified natural gas plants, based on a need to gather further information. For new coal plants, EPA set the emission limit at 1,400 lb CO2/MWh‐gross, based upon a BSER that would include some carbon capture and sequestration (CCS). For coal plants making larger modifications, EPA set the carbon dioxide emission limit at the level of the facility’s best historical annual performance during the years from 2002 to the time of modification. EPA declined to set NSPS for coal plants making smaller modifications, based in part upon a need to gather further information. For reconstructed coal plants, EPA set the emission limit at 1,800 lb CO2/MWh‐gross for sources with heat input greater than 2,000 MMBtu/h, and 2,000 lb CO2/MWh‐gross for sources with a heat input of less than or equal to 2,000 MMBtu/h.

In conjunction with the NSPS for carbon dioxide emissions from new, modified, and reconstructed power plants, EPA issued separate regulations under section 111(d) of the Clean Air Act applicable to existing power plants.

Litigation: 

The NSPS was subsequently challenged in North Dakota v. EPA (2015). One of the key issues in the case is whether partial CCS is an adequately demonstrated technology for reducing GHG emissions from coal-fired power plants. The Sabin Center submitted an amicus brief on behalf of eleven CCS experts asserting that the technology is in fact adequately demonstrated and thus the coal NSPS is lawful.

On March 30, 2017, the  D.C. Circuit Court of Appeals issued an order to delay oral argument and hold the case in abeyance indefinitely. On August 10, 2017, the court issued another order to continue holding the cases in abeyance pending further action from the administration.

Deregulatory Action: 

On March 28, 2017, President Trump issued an executive order instructing EPA to review the new source performance standards and to rescind or rewrite the rule as needed to promote the President’s goals of energy independence and economic growth. EPA immediately  submitted a request to the D.C. Circuit Court of Appeals to hold the case in abeyance pending EPA’s reconsideration of the rule.

On April 4, 2017, EPA published a notice in the Federal Register announcing that it is reviewing and, if appropriate will initiate proceedings to suspend, revise or rescind the rue.

Rule Documents:

• Final Rule for New and Modified Sources (Oct. 23, 2015)
  • Fact Sheet
  • Regulatory Impact Analysis
  • Technical Support Document: CCS Literature Survey
  • Technical Support Document: Achievability of Standard
  • Technical Support Document: Geographic Availability of CO2 Storage
  • Technical Support Document: Costing Analysis
• Proposed Rule for Modified Sources (June 18, 2014)
• Second Proposed Rule for New Sources (Jan. 8, 2014)
• Withdrawal of Initial Proposed Rule for New Sources (Jan. 8, 2014)
• Initial Proposed Rule for New Sources (Apr. 13, 2012)

Other Documents:

• Settlement Agreement to Establish GHG NSPS for Electric Generating Units (Dec 16, 2010)
• USGS, National Assessment of Geologic Carbon Dioxide Storage Resources (Sept. 2013)
• DOE/NETL, Carbon Dioxide Transport and Storage Costs in NETL Studies (May 2014)
• DOE/NETL, Cost and Performance Baseline for Fossil Energy Plants Supplement: Sensitivity to CO2 Capture Rate in Coal-Fired Power Plants (June 2015)

Executive Order 13783: Promoting Energy Independence and Economic Growth

On March 28, 2017, President Trump issued an executive order aimed at at dismantling many of the key actions that have been undertaken at the federal level to address climate change.  The order directs EPA to review and potentially rescind or re-write important regulations such as the Clean Power Plan (CO2 emission standards for existing power plants), CO2 emission standards for new power plants, and methane emission standards for the oil and gas sector. It also revokes a number of executive orders and actions, including: guidance on calculating the social costs of greenhouse gas emissions, an imposing a moratorium on federal coal leasing, and guidance on how to account for climate change in environmental reviews. Finally, it directs all agencies to review existing regulations, orders, guidance documents, policies, and any other similar agency actions that potentially burden the development or use of domestically produced energy resources, with particular attention to oil, natural gas, coal, and nuclear energy resources, and to develop recommendations on how to alleviate or eliminate aspects of agency actions that burden domestic energy production.

A detailed summary is available on our Climate Deregulation Tracker here.

See also: OMB Guidance Document on Implementation of EO 13783 (May 8, 2017). This guidance focuses on implementation of Section 2, which requires agencies to review all existing regulations, orders, guidance documents, policies, and any other similar agency actions that potentially burden the development or use of domestically produced energy resources, with particular attention to oil, natural gas, coal, and nuclear energy resources, and to develop recommendations on how to alleviate or eliminate aspects of agency actions that burden domestic energy production.