On Friday, the EPA finally unveiled its long-awaited rules for new coal-fired power plants. The agency’s administrator, Gina McCarthy, has claimed that the new rules “will provide certainty for the future of new coal.”
That’s true. The rules mean that no new coal plants will be built in the U.S., because they won’t be able to meet the limit of 1,100 pounds of carbon dioxide per megawatt-hour of electricity produced.
The EPA’s new rule relies on the agency’s misplaced belief in carbon capture and sequestration, or CCS. McCarthy has claimed that “CCS technology is feasible.” Yes, it’s feasible. But that doesn’t mean the technology is economically viable or can scale to a level that makes it a reasonable alternative to traditional sources of electricity generation.
The huge cost of CCS at coal-fired power plants can be seen by looking at Southern Co.’s project in Kemper County, Miss. The 582-megawatt project, which has been hampered by delays and cost overruns, is now expected to cost $4.7 billion. That works out to about $8 million per megawatt of capacity. In comparison, the nuclear reactors being built at Plant Vogtle, in Georgia, will emit no carbon dioxide and will cost about $6.3 million per megawatt. Meanwhile, a natural-gas-fired generator without any CCS equipment costs in the neighborhood of $1 million per megawatt.
In addition to the enormous capital cost of CCS equipment, the act of removing the carbon dioxide from the generator’s flue gas exacts what the industry calls a “parasitic load” of about 28 percent. So a 1,000-megawatt plant with CCS would have its effective output reduced to about 720 megawatts. That’s a costly reduction that will have to be made up by ratepayers.
Even if large amounts of carbon dioxide can be removed from the flues of coal-fired power plants, that gas still has to be transported. In 2009, the Pacific Northwest National Laboratory estimated that up to 23,000 miles of new pipelines would be needed if the U.S. were to attempt to deploy CCS in coal plants. That doesn’t sound like much when you consider that America’s natural-gas-pipeline system covers some 2.3 million miles. But those gas pipelines transport a valuable, marketable commodity that can be used for a myriad of different purposes. Carbon dioxide is a waste product.
How much would 23,000 miles of new pipeline cost? The latest data from the Oil & Gas Journal show that an average pipeline project costs roughly $4 million per mile. At that rate, the CCS pipelines alone would cost about $92 billion — an amount that, once again, would have to be paid for by ratepayers.
Few landowners are eager to have pipelines or high-voltage transmission lines built across their property. Imagine what landowners will say if the product to be carried isn’t crude oil, natural gas, or electrons. Instead, it’s carbon dioxide, an asphyxiant. Carbon dioxide is colorless, odorless, and heavier than air, which means that a major pipeline leak could be deadly, particularly in valleys or other low-lying areas. Opposition to proposed CCS projects in Germany and Denmark has stalled plans by two electric utilities to bury captured carbon dioxide in those countries.
Finally, we have the vexing problem of scale. Eliminating coal use in the U.S. might cheer the Sierra Club, but it won’t have a significant effect on global carbon dioxide emissions. The U.S. leads the world in reducing its carbon dioxide output. Over the past decade, domestic carbon dioxide emissions have dropped by a whopping 8 percent and now stand at about 5.8 gigatons (5.8 billion tons).
That reduction is largely due to market forces, not EPA regulations. The surge in shale-gas production has encouraged electricity producers to shutter their old coal plants and replace them with newer, cheaper, cleaner natural-gas generators.
While the U.S. is cutting its emissions, global carbon dioxide emissions have soared, rising 32 percent since 2002. The EPA may be able to prevent domestic companies from burning coal, but it won’t prevent that fuel from being used in the developing world. Over the past decade, global carbon dioxide emissions have increased by about 8.4 gigatons. In Asia, emissions rose by 86 percent. In the Middle East, they are up by 61 percent, and in Africa they jumped by 35 percent.
And that brings us to an essential point to keep in mind as you hear coal’s many opponents gloat over the new EPA rule: Over the past decade, if U.S. carbon dioxide emissions had gone to zero, global emissions still would have increased. In fact, they would have increased by 10 percent, or about 2.6 gigatons, according to the BP Statistical Review 2013.
In its press release trumpeting the new rules on coal plants, the EPA claims that it is taking action to “combat climate change.” The hard reality is that these rules will do next to nothing with regard to global carbon dioxide emissions. And while doing next to nothing about those emissions, the rules will prevent the U.S. from using its abundant coal resources.
But the most disheartening part of the story is that the EPA has made this move by wagering on CCS, a technology that has never been widely deployed because it is too expensive and the scale problems are too daunting. Count it as yet another unfortunate example of the Obama administration’s ongoing desire to pick winners and losers in the energy sector.
— Robert Bryce is a senior fellow at the Manhattan Institute.