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Why the EPA could force new gas plants to catch carbon

Why the EPA could force new gas plants to catch carbon

CLIMATEWIRE | Seven years have passed since the EPA finalized a rule requiring new coal-fired power plants to capture and store a share of carbon emissions. Despite the litigation and the repeal proposed by the Trump administration, it is still in effect.

Now the EPA is preparing to demand that newly built natural gas generators do more to limit their own emissions. And environmentalists hope the new rule, expected later this year, will also build on aggressive technology, such as carbon capture, recovery and storage, or CCUS, to profoundly reduce climate pollution.

Currently, no gas generator uses this technology. A draft white paper that the EPA published last month and is now accepting public comments on technical options for reducing CO2 emissions at new gas-fired power plants. The CCUS section cites a combined cycle gas plant in Massachusetts that captured up to 95 percent of CO2 for use in carbonated beverages – until it closed in 2005. A power plant with CCUS is scheduled to appear in Scotland in 2026.

Industry representatives, including some who support the development of CCUS for gas plants, have suggested that the EPA will fight to show that technology is ready to become the basis of the rule.

Jeff Holmstead, a partner at Bracewell LLC, said the EPA may have published a white paper to signal to the industry that it will eventually unveil a rule requiring more stringent carbon cuts using technology such as CCUS, which is currently in research and development centers of the Department of Energy. . Last year, the Department of Economy received more than $ 2.5 billion for the CCUS demonstration program in the Infrastructure Act. These costs will be supported by at least two pilot projects on a natural gas generator.

“Speaking of CCS and hydrogen, they show that they are thinking about the long-term question of what we will eventually do with the gas plants that will be needed to maintain reliability for years to come,” said Holmsted, who headed the EPA Air Office. under President George W. Bush: “But I wouldn’t read this as a statement that CCS or hydrogen is really on the table for the rulemaking they should do next year.”

Holmsted said the document clearly shows that these technologies are still underdeveloped.

Environmentalists argue that the Clean Air Act is designed to facilitate the deployment of advanced technologies that have the potential to significantly reduce harmful pollution. The EPA White Paper cites decades of CCS and CCUS projects applied to coal energy, natural gas processing and other facilities.

“All the EPA has to do is demonstrate that it can be transferred and scaled for the gas fleet, and there are no technical barriers to that,” said Jay Duffy, an attorney for the air purification task force. “I think many times opponents of CCS and advanced pollution control are trying to push the bar and say the technology doesn’t show up if it’s not on every street corner. But this is not what the Clean Air Act provides. This is promising. It’s a boost of technology. “

The EPA White Paper outlines a range of technologies that can reduce carbon emissions at a gas plant, from improving heat rates to hybrid plants that burn gas using hydrogen or renewable energy, to CCUS.

The proposal is expected later this year, and the final rule should be in 2023. Unlike the draft EPA rule for existing power plants – also expected this year – the new original standard triggers post-proposal compliance requirements.

It is unclear whether the EPA plans to simultaneously update the standard for the new coal-fired power plant. In court documents, the agency said it was still weighing options.

The Obama EPA has left the current administration with many opportunities to tighten up on gas plants.

The same 2015 rulemaking, which provided for a partial CCUS for coal-fired power plants, set a carbon limit for new gas stations at 1,000 pounds per megawatt-hour – a standard that is lower than usual at most modern gas stations. The effectiveness measures that the EPA has considered in its draft White Paper will support a 20 or 30 percent tightening of the standard.

But the Greens say it will be a sad contribution to President Joe Biden’s promise to make the U.S. grid 80 percent carbon-free by the end of this decade – and 100 percent clean by 2035.

“Once you build something, it usually stays,” said Mike O’Boyle, director of electricity policy at Energy Innovation.

The efficiency-based standard could be much tougher on gas than the Obama-era rule, he said, but if it paves the way for gas to remain a significant share of U.S. generation for decades to come, it could undermine pure zero targets.

It could also leave payers on the hook to pay for obscure assets in the coming years, he said.

“This is less of a problem in competitive markets, where the risk of new construction lies with the natural gas plant, and if there are cheaper alternatives, the company that built the plant bears the risk of early retirement,” O’Boyle said.

But more than half of U.S. tariff payers live in markets served by utility monopolies, where the energy company can cover the value of an asset that has become obsolete by shifting those costs to consumers.

If the EPA bases its rule on CCUS, it doesn’t mean utilities have to use technology to achieve a performance standard. They could choose something else that allows them to keep emissions within the limits set by the rules.

O’Boyle said energy regulators should have stricter standards for the technologies they approve than the EPA because they need to take care to protect customers from subsidizing fuzzy assets.

He argued that gas from CCUS is not competitive with renewables.

“Just because the EPA decides that some emission reduction technologies are commercially possible doesn’t mean we will or will necessarily get more of those technologies in the real world,” O’Boyle said.

The new source’s performance standard and the corresponding rule for existing power plants will be affected by next month’s Supreme Court ruling challenging the Obama-era clean electricity plan. This is also due to the fact that the main bill on climate spending remains deadlocked in Congress, which provides for massive investment in clean energy.

Carrie Jenks, executive director of Harvard University’s Environment and Energy program, said that doesn’t mean the EPA rule should meet all of Biden’s climate commitments on its own.

“I think there is no doubt that if Congress acts in accordance with comprehensive policy, it will give more certainty as to where we are going. But I do not think that the trajectory of the energy sector is entirely built on Rule 111 of the EPA.” , – she said, referring to the section of the Clean Air Act, under which the rule is written.

“We see that this sector is already moving,” she added. – Technology is evolving. So I don’t think we should hang a hat on just one component of the administration’s plan. ”

Reprinted from E&E News courtesy of POLITICO, LLC. Copyright 2022. E&E News provides important news for professionals in the field of energy and the environment.

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