Proposed Environmental Protection Agency limits on carbon dioxide emissions from new power plants would likely hurt long-term demand for Wyoming coal, industry officials say, though they believe it’s far too soon to tell exactly what the damage would be.
But industry officials say the proposed rule, which would be the first of its kind in the U.S. if approved, could encourage construction of natural gas-fired power plants instead.
The long-awaited proposed rule, announced by the EPA last Tuesday, would cap carbon dioxide emissions from new power plants at 1,000 pounds per megawatt hour.
Under current technology, new coal plants emit between 1,600 and 1,900 pounds per megawatt hour; new natural gas-fired plants let out about 800 pounds per megawatt hour.
Environmental groups have long pushed for such a cap on power plants, which are responsible for nearly 40 percent of U.S. carbon emissions. Coal-fired plants, especially, are considered one of the largest sources of the gases blamed for global warming.
“The standard will check the previously uncontrolled amount [of carbon pollution] that power plants ... release into our atmosphere,” EPA Director Lisa Jackson said last week in a conference call with reporters. But “it also creates a path forward for future facilities to use technology that burns coal, while releasing less carbon pollution.”
The proposed rule would have a minimal short-term effect in Wyoming, as there are no current plans to build a new coal-fired power plant. But it could either derail or jump-start plans for 15 new coal-fired power plants in 10 states, depending on when they start construction.
Those that break ground in the next year would be exempt from the new limit. Those that start construction later will have to eventually comply with the rule.
Older coal-fired power plants have already been shutting down across the country, thanks to low natural gas prices, demand from China driving up the price of coal and weaker demand for electricity.
Regulations from the EPA to control pollution blowing downwind and toxic emissions from power plants have also helped push some plants into retirement.
Black Hills Power already announced last year that it would close three of its older coal-fired power plants in Wyoming over the next couple of years because of previous EPA emissions rules.
Energy industry officials in Wyoming said the new rule would almost certainly prevent any new coal-fired power plants from being built in America ever again.
And down the line, they said, that will have consequences for Wyoming, the nation’s No. 1 coal producer. Nearly all of the coal mined in the state is used in power plants.
In 2010, Wyoming state and local governments took in more than $1 billion from the coal industry in taxes, royalties, and rent, according to the Wyoming Mining Association.
Mining Association Executive Director Marion Loomis said with no new coal plants, demand for Wyoming coal will inevitably drop in the long term, though he said it’s impossible to predict exactly how and when the state’s coal industry will be affected.
“We’ll just have to wait and see what companies, what mines are going to take the hit on that,” Loomis said. “This is just a continuation of their efforts to try and kill the coal industry.”
Loomis said he’s also concerned about the EPA slapping emission regulations on existing coal-fired power plants.
Eventually, all coal-fired power plants would need to install equipment to capture half of their carbon pollution. While not commercially available now, the EPA projects that by 2030, no new coal-fired power plant will be built without carbon capture and storage, techniques that are still in the experimental stages.
By contrast, a new natural gas-fired power plant would meet the new standard without installing additional controls.
Spokesmen for Rocky Mountain Power and Black Hills Power, two utilities that operate coal-fired plants in Wyoming, each said their companies are studying how the new rules would affect their operations.
But the spokesmen said the regulations, if passed, would likely affect their companies’ long-term power plant strategies.
While Black Hills has announced the three coal-fired plant closures, the utility and its sister company, Cheyenne Light, Fuel & Power, are looking to begin work on a $237 million, 132-megawatt natural gas-fired power plant on Cheyenne’s east side.
The decision to go with a natural gas plant, company officials said, was made in anticipation of federal laws that would regulate carbon dioxide emissions.
Chuck Loomis, vice president of operations for Black Hills Power, said in a statement Monday that the utility is confident the Cheyenne natural gas-fired plant will comply with the proposed emissions rules.