Will President Obama's Clean Power Plan Fly?
President Obama’s Clean Power Plan won’t exactly move at the speed of light. But it may jumpstart demand for more alternative fuels that are more ecologically beneficial than the older coal-fired technologies.
While the very concept of what is “clean energy” may have been muddied by the ongoing political machinations in Washington, it has definitely earned bipartisan constituencies at both the state and federal levels. As such, the unyielding move to develop not just more wind and solar resources but also additional natural gas and nuclear energies should continue. Coal, on the other hand, is destined to take the brunt of the new federal regulatory initiatives, although by any standard, its prominence within the American electric energy portfolio will remain.
“Everything will be incremental, as opposed to big changes because of the Clean Air Act proposals,” says Rob Barnett, analyst with Bloomberg Government. “Natural gas is the big winner but it is not a slam dunk. Renewables benefit in a marginal way. But coal is definitely the loser. It is increasingly difficult to operate coal-fired power plants in the U.S. and this rule reinforces this. To the extent that coal is less of a force, it is death by a thousand cuts.”
Clearly, natural gas has been winning market share in electric generation, namely because of the inexpensive and abundant supply of unconventional shale gas -- an economic driver that will not let up for the foreseeable future. And that fuel’s gains are coming mostly at the expense of coal, which has steadily been losing market share within the electric power sector.
Indeed, the U.S. Energy Information Administration said in a 2014 annual report that coal’s share of the electric generation portfolio was 37 percent in 2012 but by 2035, it will be 34 percent and by 2040, it will be 32 percent. Natural gas-fired generation, by comparison, will surpass coal by 2035 and by 2040, it will be equal to 35 percent of the power market.
The U.S. Environmental Protection Agency got the ball rolling. Some history: In April 2012, the agency first issued its notice of proposed rule-making on carbon pollution for new power plants.
But that proposal was taken off the table after 2 million comments came in — a move that President Obama endorsed in the summer of 2013 — with the administration’s policy issuance in June 2013. While EPA had missed the September 2013 deadline that the president had set, it did issue new proposed guidelines in January 2014 .
That 2014 proposal says that any — new — coal-burning facility would have to emit 43 percent less carbon than current coal units. That means that they would have to be as clean as today’s natural gas plants — a move that effectively bans any future coal plant that does not have carbon capture and sequestration.
In presenting his draft of the Clean Power Plan in June 2014 that examines — existing — power plants, Republicans felt that President Obama was taking it upon himself to re-write the Clean Air Act and to increase EPA’s influence.