Biden Administration Finalizes Strict Rules on Power Plant Emissions

The U.S. Environmental Protection Agency (EPA) announced on Thursday final rules on emissions reductions of power plants which would force coal-fired power plants that plan to run in the long-term and all new baseload gas-fired plants to capture most of their carbon emissions.

EPA has excluded existing gas-fired power plants from the new regulation that would mandate the installation of carbon capture systems on smokestacks to reduce emissions. This was one of the most controversial issues during the rule-making process.

While existing natural gas-fired plants would be exempted from the final rules, new gas plants, as well as coal-fired power plants that would run in the long term, need to control 90% of their carbon pollution, EPA’s rule says.

The final rules, if implemented, would be the first time federal legislation would impose standards on the power plant industry.

Sector associations slammed the final rules, with the National Mining Association (NMA) saying they are “irresponsible.”

The Biden Administration “has refused to account for irrefutable evidence that electricity demand is soaring, disregarded validated reliability warnings from grid experts related to coal plant closures, and ignored the basic fact that there is no adequate replacement ready to replace the sorely needed, dispatchable generating capacity coal provides once it is shuttered,” said Rich Nolan, NMA president and CEO. 

“We’ve seen this unlawful regulatory playbook before, challenged it and the Supreme Court agreed with our take; we will do so again and expect the same outcome.”

Dustin Meyer, Senior Vice President of Policy, Economics and Regulatory Affairs at the American Petroleum Institute (API) commented,

“We remain concerned that EPA’s final rule fails to properly consider grid reliability and the need for new natural gas plants to maintain that reliability.”

The Biden Administration needs to focus on removing barriers to building new generation capacity and fixing the broken permitting process to allow for the development of critical infrastructure – including carbon capture and hydrogen technologies, according to the API.

By Tsvetana Paraskova for Oilprice.com

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