President Barack Obama's plan to curtail carbon dioxide emissions from existing power plants, unveiled by the Environmental Protection Agency June 2, was the subject of the five top Energy and Climate Report stories for the week ending June 6, with a story on the future of coal's survival in the number one spot.
1. Coal to Survive Obama Administration's War as Efficient Plants Boost Demand
As covered in this story, Obama's plan to reduce carbon dioxide emissions from power plants by 30 percent by 2030 from 2005 levels is expected to stifle demand for coal, but it isn't expected to be a fatal blow to the source of energy.
Coal still will be used to generate 30 percent of U.S. electricity by 2030 compared with 39 percent in 2013, according to the EPA.
“There's no change to coal burn for at least the next six or seven years, and that's not talking about legislation or any litigation that will come from this," Jeremy Sussman, an analyst at Clarkson Capital Markets in New York, said.
Even before the proposal, utilities were planning to shut enough coal-fired generation in the next six years to supply a city five times the size of New York to comply with existing environmental laws.
©2014 Bloomberg L.P. All rights reserved. Used with permission.
2. EPA Proposal Seeks 30 Percent Reduction in Carbon Dioxide From Power Plants by 2030
This story details Obama's plan to cut carbon emissions from existing power plants, which would require each state to achieve its own specific carbon dioxide emissions rate under Section 111(d) of the Clean Air Act.
The agency is proposing interim emissions rate targets to be met between 2020 and 2029 before its final goal of a 30 percent reduction from 2005 levels would apply beginning in 2030.
Obama ordered the EPA to propose the carbon dioxide standards for existing plants as part of his climate action plan. It follows a similar proposed rule in January that would set the first carbon dioxide new source performance standards for new fossil fuel-fired power plants.
3. EPA Power Plant Proposal Poses Little Risk of Stranded Assets in Coal Sector, CPI Says
The EPA's proposal to cut carbon dioxide emissions from the nation's existing power plants is likely to pose little risk of stranded assets for the coal-fired power sector, according to research from the Climate Policy Initiative detailed in this story.
Coal-fired power plants could become stranded if they are no longer considered cost-efficient to run under the agency's proposal, David Nelson, primary author of the research, told Bloomberg BNA June 3.
Plant retirements associated with the proposal could cause $28 billion in lost value for the coal-fired power sector, which Nelson said is relatively small compared to the roughly $1 trillion in total assets for the electric utility sector. The figure was calculated based on a model that assumes coal-fired power plants currently fitted with pollution controls are phased out within 60 years and plants without controls are phased out within 40 years.
4. EPA's Power Plant Proposal Still Faces Significant Legal Tests, Panelists Say
As covered in this story, panelists at a Resources for the Future event in Washington said the EPA's proposal to cut carbon dioxide emissions from existing power plants faces significant legal tests.
Attorneys participating in the discussion questioned whether the EPA could impose its proposed carbon dioxide emissions rates on states rather than the power plants themselves, whether the agency has the authority it would need to administer federal programs in states that choose not to comply with the proposal and whether the statute would allow states to administer energy efficiency and renewable generation programs.
Legal setbacks and business uncertainty could undermine the carbon dioxide emissions reductions the EPA anticipates its proposed rule would achieve, attorneys said.
5. State Cuts to Comply With Climate Plan Vary; Texas Ranks at Top for Plan Perry Opposes
This story details how Texas, the nation's top emitter of greenhouse gases, would be impacted by the EPA rules to limit carbon emissions from existing power plants.
According to data compiled by Bloomberg Government, Texas would account for more than a quarter of the total cuts in greenhouse gases that would be required under the proposal. Other states facing steep cuts are Louisiana, Florida, Pennsylvania and Arizona.
The plan “is the most direct assault yet on the energy providers that employ thousands of Americans, and fuel both our homes and our nation's economic growth,” Texas Gov. Rick Perry (R) said in a statement. “These rules will only further stifle our economy's sluggish recovery and increase energy costs for American families.”
©2014 Bloomberg L.P. All rights reserved. Used with permission.
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