Tag Archives: Climate Change

Court Refuses to Stay EPA Rule Reducing Power Plant CO2 Emissions

January 24, 2016.     An earlier post described the basic requirements  of a new federal rule  (the Clean Power Plan) requiring existing  power plants to reduce carbon dioxide (CO2) emissions.   Note: That post described the draft rule out for public comment in  2014; the final  rule approved by the U.S. Environmental Protection Agency in August  2015 differed from the draft rule  in some details — including the specific  state  CO2  reduction targets — but the basic requirements did not change.

North Carolina’s Department of Environmental Quality (formerly DENR)  opposed the rule early on and in October of 2015 joined 23 other states in a lawsuit challenging the final rule.  (More on the McCrory administration’s objections to the EPA rule here.)   Both the states and several business/industry groups  attacking the rule in separate lawsuits  asked the federal court to issue a preliminary injunction  (or “stay”) to prevent EPA from implementing  the Clean Power Plan rule until the lawsuits are resolved.

On January 21, the federal Court of Appeals for the District of Columbia denied all requests to stay implementation of the Clean Power Plan rule. The court’s  order did not discuss the basis for denial in detail; the court simply said the requests failed to meet the high standards for issuance of a preliminary injunction, citing the U.S. Supreme Court decision in  Winter v. Natural Resources Defense Council (2008).  First,  the court must be persuaded that the plaintiff is ultimately likely  to win the case. A court will not give a  plaintiff the immediate advantage of a stay restricting the defendant’s actions if the plaintiff’s arguments are unlikely to win out in the end.  Even if the court finds the plaintiff has a likelihood of winning the case, the court will not issue a stay unless the plaintiff also shows that:

The plaintiff is likely to suffer irreparable harm if the court doesn’t issue a preliminary injunction. In this case, the plaintiffs  had to convince the court that allowing EPA to move ahead with implementation of the Clean Power Plan rule  would cause immediate harm to the plaintiffs and that  harm could not be remedied by a later ruling in the plaintiffs’ favor.

The balance of equities tips in the plaintiff’s favor.  In very simplified terms,  the plaintiffs had to show that a stay would do more good than harm.

An injunction is in the public interest.  The public interest standard can work in favor of either the plaintiff or the defendant depending on the case. In the Winter v. Natural Resources Defense Council case, the U.S. Supreme Court decided that a preliminary injunction was not in the public interest because it would have restricted a particular type of military training exercise.

Since the Court of Appeals for the D.C. Circuit did not provide specific reasons for refusing to stay the Clean Power Plan rule,  it is impossible to know exactly which of those standards the plaintiffs failed to meet.  The decision doesn’t necessarily mean the court thinks the state and business/industry plaintiffs have a weak case against the rule; failure to meet the other criteria could also lead to denial of a stay.  It is probably safe to say, however,  that the court did not believe the states or the business/industry plaintiffs  will  be harmed by allowing the Clean Power Plan rule to go into effect.

In asking for a stay, the states  identified two kinds of harm —  waste of state resources to comply with a federal rule that may be struck down by the courts and a much more nebulous harm to state sovereignty.  On the question of potentially wasted state resources, EPA pointed out: 1. the federal rule gives states until 2018  to develop a state plan to meet the CO2 reduction targets;  and  2. a state can also simply opt out and let EPA develop a CO2 reduction plan for its electric utilities.  The first actual CO2 reduction target comes several years after approval of  the state plans. The court seemed persuaded that the long planning and implementation timeline means states will not have to sink major, unrecoverable costs into Clean Power Plan compliance before the lawsuits are resolved.

It is hard to know what the court made of the somewhat novel argument that immediate implementation of the Clean Power Plan rule  would irreparably harm state sovereignty.  EPA pointed out that the Clean Power Plan rule gives states a lot of flexibility in developing plans to meet the  CO2 emissions reduction targets.  It is also difficult to argue the Clean Power Plan rule attacks state sovereignty without going to the next — much more radical step — of arguing that the federal government has no authority to regulate to protect air quality in the first place.   In any case, if the federal court strikes down the Clean Power Plan rule as either unconstitutional or beyond EPA’s statutory authority that would seem to adequately  remedy any hypothetical harm to  state sovereignty.

The Court of Appeals agreed to expedite the Clean Power Plan lawsuits and set the case for hearing on June 2, 2016.

Practical effects — States will continue to face a 2018 deadline for submission of  CO2 reduction plans. In one way, the impact on  N.C.  will be minimal  because the state  is  already on a fast track to submit a  plan to EPA in  2016.  The catch, however, is that the plan proposed by N.C.’s Department of Environmental Quality relies entirely on tighter emissions limits for a small set of existing coal-fired power plants and will only result in a fraction of the CO2 reductions the federal rule requires.  See another post  for background on the McCrory administration’s intent to submit a plan that does not take  credit for CO2 reductions associated with  increased renewable energy generation and energy efficiency improvements already required under  state law.  The shortfall in CO2 reductions in the plan being prepared by DEQ will almost certainly result in EPA disapproval.  Given the federal court’s denial of a stay, N.C.’s decision to deliberately fast track an unapprovable plan may mean  the state will have to revisit the plan sooner rather than later.

The North Carolina Response to EPA’s Clean Power Plan Rule

July 26, 2015.  In one way, the proposed  U.S. Environmental Protection Agency (EPA) rule to limit carbon dioxide (CO2) emissions from power plants  — expected to be final in August — looks like a typical air quality rule. The Clean Power Plan rule sets state by state reduction goals for a pollutant (CO2) from a particular set of of sources (electric generating facilities).  But the rule takes an unusual and  innovative approach to meeting those goals. The rule identifies  four components  (or “building blocks” in EPA rule-speak ) of a plan to reduce CO2 emissions associated with power generation : 1. reducing power plant CO2 emissions (the traditional Clean Air Act approach); 2. energy efficiency measures; 3. increased  electric generation from renewable energy sources;  and 4. transition of electric generation facilities from coal to natural gas.   In effect, the rule aims to lower CO2 emissions per kilowatt hour used and allows the  states to take credit for CO2 emissions avoided through increased energy efficiency and by shifting electric generation to energy sources with low or no CO2 emissions.

The proposed EPA rule requires each state to submit a plan for meeting its CO2 reduction target by June 30, 2016. The state plan can rely on any or all of the four “building blocks” in the EPA rule; it can also include measures that fall outside those categories as long as the plan achieves the CO2 reduction target for regulated electric generation facilities. If a state fails to develop a plan, EPA can create a federal plan for the state.  An earlier post  provides more detail on the  proposed federal rule.

The McCrory administration has opposed the Clean Power Plan rule in  written comments and in testimony before Congressional committees. In part,  the administration has argued that the Clean Air Act does not authorize EPA to issue  a rule that relies on measures — such as energy efficiency and increased reliance on renewable energy — that go beyond limiting  pollutant emissions from regulated power plants.  Last week,  the practical implications of  that   position became more clear when DENR  Secretary Donald van der Vaart  told a Senate committee that  the McCrory administration intends to resist the flexibility offered under the federal rule and submit a CO2 reduction plan  based entirely on requiring additional CO2 emission reductions at  power plants.

The Secretary’s comments came  as a state Senate committee debated House Bill 571, which requires DENR to develop  a state CO2 reduction plan with the participation of the public and the electric utilities. DENR did not support House Bill 571, but the bill passed the House with a bipartisan majority and the support of  the state’s major electric utilities and environmental organizations. Last Wednesday, the  Senate Agriculture and Environment Committee took up a substitute draft of  H 571 that would prohibit DENR from taking any action or expending any state resources on development of a CO2 reduction plan until all legal challenges to the federal rule had been resolved or until July 1, 2016 (whichever came later).  Asked to comment on the proposed substitute bill,   Secretary van der Vaart  indicated that DENR  would prefer to submit a CO2 reduction plan by June 30, 2016 as required under the federal rule — but a plan based entirely on reducing  power plant emissions.

Based on the Secretary’s statement, the McCrory administration response to the Clean Power Plan rule puts the state in a strange place:

♦  DENR has argued for an interpretation of  the Clean Air Act that would force the federal rule to be more rigid and offer the state less flexibility to meet CO2 reduction targets.   (A number of environmental law experts disagree with this narrow interpretation of EPA authority; the issue will likely have to be settled in court.)

♦  Based on this narrow interpretation of EPA authority, DENR intends to develop a state CO2 reduction plan that relies entirely on further reducing  CO2 emissions from power plants even though existing  state policies have North Carolina on a path to achieve much (if not all)  of the necessary reductions through increased renewable energy generation, greater energy efficiency, and  transition of power plants from coal to natural gas.  Although DENR has not provided an analysis of the state’s ability to meet the state’s CO2 reduction target based on those existing policies, others have. You can find one (an analysis by the Natural Resources Defense Council)  here.

♦  Relying  entirely on lowering power plant emissions could  make meeting the CO2 reduction target more difficult and more costly for electric utilities and consumers. Again, DENR has not provided a comparative analysis of the cost of relying entirely on power plant pollution controls versus  a comprehensive CO2 plan that takes credit for energy efficiency measures, renewable energy generation and transitioning power plants from coal to natural gas.

Most states have started planning to meet the  CO2 reduction targets. Even in coal-producing states where political opposition to the EPA rule tends to be highest,  state air quality agencies have begun sketching out CO2 reduction scenarios in case the rule survives the expected legal challenges. Only one state — Oklahoma — has prohibited its environmental agency from developing a plan. A recent Washington Post story  reported that even coal-dominated states like Kentucky seem confident of meeting the  CO2 reduction target thanks in part to recent investments in renewable energy generation. It isn’t clear that any state other than North Carolina has decided to develop a plan based solely on CO2 reductions at coal-fired power plants.

Which leaves something of a public policy mystery. A state with significant advantages in renewable energy, energy efficiency and already on the road to transitioning power plants from coal to natural gas seems to have settled on a policy that throws those advantages away. Instead of working with electric utilities, consumers and environmental organizations to develop the most cost-effective  CO2 reduction plan for the state, DENR intends  to unilaterally develop a plan based entirely on reducing power plant emissions.  It isn’t clear why or what that policy choice could cost the state.

Note: The Senate committee approved the substitute draft of House Bill 571 on Wednesday, but offered to continue talking to DENR about the content of the bill. The bill was pulled off the Senate calendar last Thursday; when the bill  reappears on the Senate calendar, there may be amendments as a result of the ongoing discussions.

Update: The original post has been revised to make it clear that state CO2 reduction plans can also rely on measures other than those covered by the  four “building blocks” identified in the EPA rule.

A Citizen’s Guide to Climate Change, Part II: The “Greenhouse” Effect

February 16, 2015.  At its most basic, the theory that human activity can affect the climate has  two parts: 1. Changes in  Earth’s atmosphere can affect surface temperature;  and 2. Human activity can alter the makeup of Earth’s atmosphere. This post provides an overview of the science behind both principles, relying on scientific reports and a number of  sources that collect and report data on the link between atmospheric gasses and climate.  This post  focuses on carbon dioxide (CO2) as one of the most significant contributors to warming; other “greenhouse” gasses include methane, nitrous oxide and fluorinated gasses.

How the atmosphere affects temperature; the history of the  “greenhouse effect” The scientific  theory  that Earth’s atmosphere affects  the planet’s surface temperature — the “greenhouse effect” — goes back nearly 200 years. As early as the 1820s,   French scientist Jean Baptiste Fourier  theorized that gasses surrounding the Earth retained heat,  allowing the planet to warm more than the sun’s influence alone could explain. British physicist  John Tyndall did some of the earliest experimental work to prove the relationship,  demonstrating that water vapor and carbon dioxide  hold more heat than oxygen and nitrogen.  In 1861, Tyndall published the results  in a  paper titled On the Absorption and Radiation of Heat by Gases and Vapours, and on the Physical Connexion of Radiation, Absorption, and Conduction.  In 1896, Swedish  scientist  Svante Arrhenius published  a  paper  that for the first time quantified the  relationship between CO2  in the atmosphere and  Earth’s surface temperature.

Tabletop experiments:  A number of educational and scientific websites provide instructions on how to do your own table-top experiment demonstrating how changes in the atmosphere affect temperature. For a demonstration, see this BBC video.

Sources:  Discovery of Global Warming  website (maintained by Spencer Weart  and hosted by the American Institute of Physics); the National Aeronautic and Space Administration (NASA); the National Oceanic and Atmospheric Administration (NOAA);  the University of York’s Tyndall correspondence website;  and the Tyndall Centre  for Climate  Change Research. For an overview of the history of climate science carried forward through the 20th century, see a post by John Mason on the Skeptical Science website.

Trends in Atmospheric CO2. Scientists have been taking monthly measurements of  CO2 at the Mauna Loa Observatory  (Hawaii) since 1958. The chart below shows the trend line.

co2_data_mlo

 

The red line plots the CO2  measurements; the black line represents the seasonally adjusted CO2 level. In 2014, CO2 levels measured at Mauna Loa reached 400 parts per million for the first time since modern record-keeping began.   Research indicates that current CO levels are the highest in  hundreds of thousands of years. Or as science writer Andrew Freedman put it more colorfully in an article for Climate Central:

The last time there was this much carbon dioxide (CO2) in the Earth’s atmosphere, modern humans didn’t exist. Megatoothed sharks prowled the oceans, the world’s seas were up to 100 feet higher than they are today, and the global average surface temperature was up to 11°F warmer than it is now.

Englishman seated on jaw of megatooth shark.

Englishman seated on jaw of megatooth shark

Most of the increase in atmospheric CO2 has occurred since the beginning of the Industrial Revolution (in the late 1700s) when atmospheric levels were around 280 parts per million and the rate of change has increased in the last 50 years. The upward curve in CO2 looks very similar to the upward curve in mean global temperature since 1960 shown in the previous post:

Mean Surface Temps

 

Questions about human activity and  increased CO2 levels

Haven’t CO2 levels on Earth been higher in the past? Yes, but the highest levels occurred around 500 million years ago when Earth was a very different place.  The last time CO2 levels were similar to those being measured now was about 7,000 years ago. CO2 levels fell over  several intervening  centuries; then the curve  reversed  and the rate of increase accelerated  within the last 50 years.

How do we know human activity has caused the recent increase in CO2Scientists have looked at the relationship in several different ways. Two indications of human influence:

1. Mathematical accounting for the conversion of carbon to CO2.   CO2 comes from both natural processes and human activity.  People convert carbon to CO2 by burning fossil fuels and by clearing and burning forested areas.    Scientists can  calculate both the amount of CO2 produced by human activity (which has greatly increased in the last 150 years) and the capacity of oceans and forests to absorb CO2.  Excess CO2  — the difference between the amount produced and the amount taken up by  the oceans or by plant life — goes into the atmosphere. Atmospheric CO2  significantly increased  as CO2 emissions from industry and energy generation spiked,  indicating a large human  contribution. Human  activity  also  overwhelms   CO2  increases associated with  natural sources like volcanic eruptions.

2. Studying the atomic “fingerprints” of atmospheric CO2. Not all carbon atoms are created the same. Elements like carbon can occur in different forms (called “isotopes”) based on the number of neutrons in each atom. Carbon occurs as three isotopes — 14C (radioactive and least common), 13C (about 1% of carbon isotopes) and 12C (the most common).  Fossil fuels like oil and coal contain  no 14C because the radioactivity has long since  decayed.  Both plants and fossil fuels  tend to have a low ratio of 13C to 12C. Scientists have found that the mix of atmospheric CO2 has become “lighter” in the last 150 years. An increase in carbon associated with plant-based fossil fuels seems to  have changed the ratio of “light” carbon to “heavy” carbon in the atmosphere. The change has tracked the significant increases in CO2 emissions from combustion of  fossil fuels for industrial purposes and electricity generation.

What kinds of human activities contribute to atmospheric CO2? Based on reporting of greenhouse gas emissions, the U.S. Environmental Protection Agency has created a chart showing the most significant sources.

gases-co2

Sources:  “How do we know that recent CO2 increases are due to human activities?”, www.realclimate.org, (December 22, 2004); Andrew Freedmen: “The Last Time CO2 was this High,  Humans Didn’t Exist”,  www.climatecentral.org, (May 2, 2013); World Meteorological Organization: 2013 Global Greenhouse Gas Report; NOAA Earth Science Research Laboratory, Global Monitoring Division website; Scripps CO2 Program website; “Sources of Greenhouse Gas Emissions”, U.S Environmental Protection Agency website; NASA:Vital Signs of the Planet: Carbon Dioxide; Caitlyn Kennedy: “Earth’s Hottest Topic is Just Hearing Up”, www.climate.gov (2009).

A Citizen’s Guide to Climate Change, Part I: Temperature

January 30,  2015. Controversy over EPA’s proposed carbon reduction rule (see an earlier post)  has again focused attention on the  climate change debate.  This post will look at global  temperature trends as reported by the National Oceanic and Atmospheric Administration (NOAA) and the National Aeronautic and Space Administration (NASA).

The most recent temperature data. In  2014, the average combined land and sea surface temperature on Earth reached the highest level since modern record-keeping began in the 1880s.   The latest temperature data can be found in the National Oceanic and Atmospheric Administration (NOAA)   2014  Global Climate Report here. Similar results reported by  NASA can be found here. Although NOAA and NASA use somewhat different baselines and methods, the two agencies reached very similar results. NASA calculated an increase of 1.4 ° (F) over the historical baseline; NOAA found an increase of 1.24° (F). Both found that higher ocean temperatures made a slightly greater contribution to the total increase than land surface temperatures.

The  chart below has been adapted from a NOAA Chart showing the ten warmest years on record based on the global average temperature. All of those years, with the exception of one, have occurred since 2000.  The third  column shows the increase in temperature by reference to the historical average (1880-2014).

Rank (1=Warmest) Year Increase (Fº)
2014  +1.24
2 (Tie) 2010/2005  + 1.17
4 1998  +1.13
5 (Tie) 2013/2003  +1.12
7 2002  +1.10
8 2006  +1.08
9 (Tie) 2009/2007  +1.06

Some temperature fluctuation from year to year can be accounted for by El Nino (warming) and La Nina (cooling) trends in the Pacific Ocean, but the 2014 high occurred under neutral El Nino conditions.  Find the original NOAA chart and other information about NOAA’s  2014 temperature analysis here.

NOAA also provides a bar chart showing the trend in global temperature over the entire period

Comparison to past temperature variation on Earth. Scientists have estimated average global temperature during past warming and cooling  periods based on a variety of natural records — glacial ice, tree rings, geological formations, and fossils. There have been periods in the past when Earth’s average temperature was much higher than it is now.  But once Earth cooled down from a hot rock to  a planet capable of supporting life,  the warming event that followed the last ice age occurred  very slowly.  See NOAA’s  introduction to  climate history here.   The overviews of historical climate studies provided by NOAA and by NASA’s  Climate Observatory  put  context around recent temperature increases:

♦  Earth’s average temperature varies from year to year in response to many influences,  but in recent  decades, the cooler years have represented “noise” in an overall upward trend.

♦ Earth’s climate has been relatively stable for much of the history of human civilization (the past 10,000 years).

♦ The last significant warming period (which  began around 11,000  years ago) led to an increase in the Earth’s average surface temperature of between 7° – 12° F.  That warming occurred very gradually  over a period of about 5,000 years and then another cooling trend began.

♦  The current warming trend began in the 20th century and temperature increases are happening  10  times  times faster than the last  ice age  warming period. (NASA).

For more detail on climate history, both the NASA and NOAA  sites provide links to the scientific studies used as references.

Do these increases in global temperature matter?  An increase of 1.4° F over the average global surface temperature seems — and is —  small, but  even small increases can affect patterns of plant and animal life.  In 2012,  the  U.S. Department of Agriculture released an updated U.S.  plant  hardiness zone map.  The map divides the U.S. into  zones based on the average annual low temperature;  going from north to south, each zone on the map represents  a 10° increase in the average low temperature. By comparison to the 1990 map, the new map shows a half-zone shift (or  5° F) toward the warmer zones. USDA has been careful to say the data sets for the 1990 and 2012 maps differed in a number of ways — the new map reflects data from more  locations and use of more sophisticated technology as well as additional years of data.  But the shifts are consistent with the general trend in global temperature data since the 1980s and suggest that farmers and gardeners  may already be seeing changes affecting plant life.

While a  1.2°- 1.4° increase in the average temperature over 30 years may already be affecting   the environment, concern about rising global temperature really focuses on the future. Two of the greatest concerns:

1. The rapid pace of warming and the unknown stopping point. Earth’s last major ice age warming event took place over a period of 5,000 years and at a time before modern human civilization and reliance on large-scale agricultural production.   Earth’s current  warming  is occurring  at a much faster rate (as much as 10 times faster), increasing the risk that plant and animal life may not be able to adapt quickly enough to changing temperature regimes. While Unites States agriculture has not been harmed by  the  1.2 – 1.4 ° (F) increase in recent decades,  it could be much more difficult to maintain agricultural productivity in the face of continuing, rapid temperature increases.  Other, warmer,  parts of the globe will be much more vulnerable to agricultural disruption because of temperature increases. Temperature increases can also   affect other human food sources like fisheries.

2. The chain-reaction effect of rapid warming on other parts of the human environment. The chain reaction talked about most often:

Higher global temperaturemelting of land ice ⇒more rapidly rising sea levelsflooding of coastal areas.

The potential for accelerated sea level rise gets attention because of the direct risk to human populations. In 2010, 39%  of the population of the U.S. lived in a shoreline county;  more than half of the population lived within  50  miles of an ocean shoreline. (Source: U.S. census data as reported in NOAA’s State of the Coast Report.)  As a result, accelerated sea level rise could affect some  of the most highly populated areas in the United States.

Note: NASA’s Vital Signs of the Planet website provides visualizations of  changes in the extent of sea ice and land ice.

How reliable is the data?   Temperature records date back to the 1880s and the amount and quality of the data has only gotten better.  NASA describes the records used in the Goddard Institute of Space Sciences temperature calculations this way:

The GISS analysis incorporates surface temperature measurements from 6,300 weather stations, ship- and buoy-based observations of sea surface temperatures, and temperature measurements from Antarctic research stations. This raw data is analyzed using an algorithm that takes into account the varied spacing of temperature stations around the globe and urban heating effects that could skew the calculation. The result is an estimate of the global average temperature difference from a baseline period of 1951 to 1980.

Next: The role of carbon dioxide and other “greenhouse” gasses in raising global temperature.

North Carolina and EPA’s Proposed Carbon Rule

September 30, 2014. On June 2, the U.S. Environmental Protection Agency  released  a draft rule to reduce  carbon dioxide (CO2)  emissions from power plants.  Gov. Pat McCrory’s administration has taken a number of opportunities  to  question the legal basis for the  rule. An earlier post described  a presentation by DENR Deputy Secretary Don van der Vaart  to the N.C.  Energy Policy Council soon after EPA  released the draft rule in June.  DENR actually began staking out a position in opposition to the proposed carbon rule even earlier. (See the DENR website for a number of agency policy documents related to the carbon rule.)  Each time, DENR focused on legal arguments — challenging EPA’s authority to regulate a power plant’s CO2  emissions under Section 111 of the Clean Air Act —  rather than the actual impact of the rule on the state and its electric utilities.

Evaluating the impact of the rule on an  individual state can  be challenging because the rule takes an innovative approach to reducing CO2. Instead of putting the burden and cost of CO2 reductions entirely on the power plants,  the rule tries to harness  other  trends in energy generation — increased  reliance on renewable energy;  adoption of  energy efficiency standards for buildings, appliances and equipment; and a shift in generation from coal-fired plants to natural gas units — to help lower CO2 emissions associated with power generation.  Many of those trends developed in response to other environmental concerns (stricter  air quality  standards for ozone and particulates) or economic incentives (the lower cost of natural gas). EPA’s proposed  carbon rule builds on those trends to also drive down CO2 emissions associated with power generation.

Steps  North Carolina has taken over the last 10-15 years to increase renewable energy  generation and energy efficiency seem to put  the state  in a favorable position to meet the CO2 reduction goal in the rule and come out the other side with competitive energy costs.  This post is intended to provide some  (very basic) background on how the rule works and to  identify the questions that need to be answered to understand what more the state may need to do to meet the CO2 reduction goal in the proposed rule.

BASICS OF THE CLEAN CARBON RULE

♦ The rule only addresses CO2 emissions associated with electric generating units (EGUs) that burn fossil fuels; the rule does not affect industrial sources of CO2.

♦ The rule sets a carbon reduction goal for each state in the form of a rate – pounds of carbon dioxide emitted per megawatt hour of electricity generated or CO2/MWh.

♦ Instead of setting a CO2 emission limit for each EGU, EPA proposed a statewide average CO2 emission rate – allowing the goal to be met in part by shifting electric generation from high to low emission units; increasing renewable energy and nuclear generation; and creating “savings” through energy efficiency measures.

♦ The rate is based on net generation (electricity delivered to the grid) rather than gross generation measured at the EGU. Net generation excludes energy used at the power plant to run fans, pumps, motors and pollution control devices.

♦ The rule sets a final goal for each state to meet in 2030 and interim goals for 2020-2029.

♦  CO2 reduction goals differ from state to state. In calculating the goals, EPA considered the existing mix of electric generation facilities in each state (nuclear, coal, natural gas) and each state’s potential for  increased renewable energy generation and growth in energy efficiency savings.

HOW EPA CALCULATED STATE REDUCTION GOALS (THIS IS REALLY IMPORTANT)

State goals are not based on simply requiring  fossil-fuel burning power plants to reduce their CO2 emissions per megawatt hour from 2012 levels.  Although  EPA used the EGU’s 2012 reported emissions of CO2 as one factor in calculating  the goals, it is not quite correct to describe 2012 as the “base year” for reductions.   The state goals represent something different — reductions in EGU emissions combined with a shift in electric generation capacity to cleaner sources (such as renewable energy and nuclear power) and increases in energy efficiency. More about the rate calculation below.

To set the state CO2 emission rate goals, the EPA rule adjusted the  2012 calculation of CO2/MWh in two ways:

1. EPA reduced the net CO2 emissions  reported by regulated EGUs in 2012 (the numerator in the CO2/MWh equation) by assuming those units can achieve a 6% improvement in heat efficiency. In states where there are both coal-fired plants and natural gas plants, EPA adjusted the numerator again if any natural gas plant in the state operated at less than 70% utilization. Assuming  every natural gas plant could operate at 70% utilization, EPA shifted a corresponding amount of electricity generation from  coal-fired plants to the underused natural gas plants and and adjusted the pounds of CO2 emitted to reflect the natural gas plants’ lower CO2 emissions rate.

So the numerator in the goal represents pounds of CO2 emitted by  the state’s existing power plants after each individual plant has become more heat efficient and after power generation across the entire system has been  reallocated  to better utilize low-emission natural gas units. Both adjustments reduce the amount of CO2 generated by the EGUs  below the amount actually reported  in 2012.

2. EPA then adjusts the denominator in the CO2/MWh equation to spread the pounds of CO2 generated  by the EGUs across the megawatt hours generated by all electric generating sources in the state and megawatt hours of electric generation saved through energy efficiency measures. The denominator becomes:  total megawatt hours generated by the EGUs + new renewable energy generating capacity + new or preserved nuclear generation capacity + an estimate of annual avoided power generation associated with demand-side energy efficiency.  (“Preserved” nuclear power refers to  an existing nuclear plant operating beyond a previously announced closure date.)

The final 2030 CO2 emissions goal as a rate =

Net CO2 emissions for regulated EGUs – 6% heat efficiency*
Total net MWh (EGUs + renewable energy + new/preserved nuclear + avoided generation)

* In some cases there has also been an adjustment for under-utilized natural gas plants.

Although the rule does not propose CO2 reductions from any baseline year, EPA has estimated the rule will result in a 30% reduction in CO2 emissions as compared to 2005.

THE NORTH CAROLINA CO2 REDUCTION GOAL

The proposed  2030 goal for North Carolina is  992 lbs CO2/ MWh. By comparison, North Carolina’s electric generating units reported 2012  emissions  of  1647 lbs CO2/ MWh. (Source: Congressional Research Service report.) The EPA rule would require North Carolina to reduce CO2 emissions from:

1647 lbs of CO2 per megawatt hour  of electricity generated by fossil fuel EGUs

to

992 lbs of CO2 per megawatt hour of electricity generated by fossil fuel EGUs + estimated new renewable energy generation+ new or preserved nuclear capacity+ electricity generation avoided by energy efficiency measures

The Clean Power Plan goal does not require  North Carolina power plants to reduce CO2 emissions by 40%.  The rule requires the state’s  electric generation  system  as a whole to  meet demand for electric power at a 40% lower rate of CO2 emissions.

MEETING THE GOAL

The draft EPA  rule  requires  states to  use four “building blocks” to comply; the building blocks correspond to the factors EPA used to calculate each state’s  CO2 reduction goal:

1. Increased heat efficiency at EGUs —  EPA has  assumed each EGU can achieve  6% improvement in heat efficiency.

2. Increased “dispatch” of power generation from higher emission coal-fired units to lower emission Natural Gas Combined Cycle (NGCC) plants —   EPA has assumed every NGCC  unit can be operated at 70% utilization.

3. Increased generation of electricity from renewable sources and new or preserved nuclear generation.  EPA has estimated the  potential for growth in renewable energy generation and new or preserved nuclear generation individually for each state.

4. Energy efficiency measures to lower demand,  measured by  megawatt hours of generation avoided. EPA set a  goal of increasing demand-side efficiency by 1.5% annually.

The individual building block goals set out for each state are not requirements. EPA  used  these assumptions and estimates  to calculate  each state’s  CO2 reduction goal, but  the rule allows a state to weight the  building blocks differently in  its  compliance plan.  For example,  difficulty meeting EPA’s expectations  for demand-side energy efficiency can be offset  by increasing renewable energy generation (or vice-versa).

RELYING ON EXISTING PROGRAMS

Media reports have  reflected a lot of confusion about the impact of the proposed rule on states like North Carolina that have already taken significant steps to increase renewable energy and energy efficiency.   The proposed federal rule actually stresses  reliance on programs already in place and gives the states  credit for expanded renewable energy generation or growth in energy efficiency as a result of  existing programs.

In talking about the final state emission rate goals,  the rule notes that  “EPA is also proposing that measures taken by a state or its sources after the date of this proposal, or programs already in place, and which result in CO2 emission reductions at affected EGUs during the 2020-2030 period, would apply toward achievement of the state’s CO2 goal.” 

The rule makes a similar statement about renewable energy generation:  “We note that with the exception of hydropower, the renewable energy generation levels represent total amounts of renewable energy generation, rather than incremental amounts above a particular baseline level. As a result, this RE generation can be supplied by any RE capacity regardless of its date of installation.”

Table 6 in the proposed rule  shows North Carolina’s 2012 renewable energy generation as 2% and a proposed final 2030 goal for North Carolina of  10%.  The  N.C. Utilities Commission has reported that North Carolina electric utilities met the first state Renewable Energy Portfolio Standard (REPS) goal of  3% of retail electricity sales in 2012. The final goal under the existing state law will be 10% of retail sales for electric membership corporations/ municipal systems  (by 2018) and 12.5% of retail sales for the electric public utilities (by 2021).  Under the EPA rule, the state will get credit for any new or expanded renewable energy generation in 2014 or later as a result of the existing state REPS requirement.

Since the state REPS goal requires electric utilities to continue to increase renewable energy generation and energy efficiency through 2021,  the increases realized between 2014 and 2021 will also move North Carolina toward the federal goal. To know whether the proposed carbon rule will require the state to do more on renewable energy, the state will need a gap analysis.  The analysis will have to separate  renewable energy generation from energy efficiency savings; the two have been combined in the state REPS goal, but are calculated separately under the federal rule.

The federal rule sets a goal of having every state achieve a 1.5% annual incremental savings based on  demand-side energy efficiency measures.  EPA assumes that states already realizing  a 1.5% in annual incremental savings  will continue  and  maintain that rate through 2029 — giving states that engaged in energy efficiency measures early full credit for the incremental energy savings achieved through existing programs. To understand how close North Carolina may already be to meeting the  carbon rule’s  energy efficiency goal, the state will need to calculate the incremental annual  demand side savings that can be attributed to the state REPS goal and  add incremental savings associated with other energy efficiency programs (such as energy efficiency standards incorporated in the State Building Code).

THE QUESTION

The big  question to be answered is this: How far will North Carolina’s existing renewable energy and energy efficiency programs go toward closing the gap between 1647 lbs CO2/MWh generated by EGUs that burn fossil fuels  and 992 lbs CO2/ MWh generated by power plants+ renewable energy + new/preserved nuclear + generation avoided by energy efficiency?

It appears the remaining gap may be small, giving  North Carolina  an advantage over states that haven’t adopted policies supporting renewable energy generation and energy efficiency.   If so, the advantage will be economic as well as environmental by holding down increases in state energy costs.

RESOURCES

Text of the Clean Carbon Rule (from the June 18, 2014 Federal Register notice)

Congressional Research Service Report: State CO2 Emission Rate Goals in EPA’s Proposed Rule for Existing Power Plants, Jonathan Ramseur, Specialist in Environmental Policy, July 21, 2014.

2013 NC Utilities Commission Annual Report Regarding Renewable Energy and Energy Efficiency Portfolio Standard in North Carolina

NCDENR Questions Legal Basis for Proposed EPA Power Plant Rule

July 22, 2014.  On June 18, 2014, EPA published a proposed  rule to reduce emissions of carbon dioxide (CO2)   from existing coal-fired power plants.  Both Duke Energy  and  DENR’s   Division of Air Quality  indicated a detailed review of the draft rule would be required to fully understand the impact  on North Carolina’s electric utilities.    More recently,  Donald van der Vaart, DENR’s Energy Policy Advisor,  made a presentation on  the  proposed CO2 rules to the N.C. Energy  Policy Council. You can find both a video  and a copy of the  powerpoint presentation here.  Rather than discussing the rule’s potential impact on the state’s electric utilities, the presentation questioned the legal basis for the EPA rule.  The  legal analysis identified some legitimate questions about interpretation of the Clean Air Act provision  underlying the CO2 rule,  but the analysis also had significant flaws.

EPA  proposed the CO2 rule under Section 111 of the Clean Air Act,  which authorizes EPA to adopt standards for new and existing sources of air pollution by category; in this case, the category consists of electric generating units burning fossil fuels. (The Clean Air Act also gives EPA two other tools for addressing air pollution —   Section 108 authorizes EPA to adopt  ambient air quality standards to be met on an area-wide basis and Section 112 allows EPA to regulate listed hazardous air pollutants, like mercury,   by source category.)

DENR’s  presentation to the Energy Policy Council offered some criticism of  EPA’s proposed CO2 standard for  new power plants, but  made a more pointed  attack on the  rule addressing emissions from existing power plants. The presentation both questioned EPA  authority to regulate CO2 emissions from existing power plants under Sec. 111(d)  and the appropriateness of including  transition to  natural gas;  expanded use of nuclear power and renewable energy sources;  and energy efficiency  as elements of the performance standard  for existing coal-fired power plants. This post will likewise focus on the  proposed  existing source rule under Sec. 111(d) and particularly the DENR objections to the rule that need  more context or correction:

DENR Objection:  EPA cannot  use Sec. 111(d) of the Clean Air Act  to set a standard for an existing air pollution source  also regulated  under  Sec. 112  (addressing  hazardous air pollutants) even if the standard proposed under Sec. 111(d) addresses a pollutant that is not regulated under Sec. 112.

Counterpoint:   This seems to be  a more open question that the presentation suggests. When Congress added Sec. 111 to the Clean Air Act in 1990,   the  House  version prohibited  use of Sec. 111(d)  to set standards for existing sources regulated under Sec. 112 and the Senate  version prohibited  its use to set standards for pollutants regulated under Sec. 112.  Both versions became part of the Statutes at Large.  EPA has consistently interpreted Sec. 111(d)  to prohibit  adoption of  existing source standards  for pollutants  regulated under Sec. 112.   (See a paper  by Adam Kushner and Judith Coleman on the background of the  Sec. 111(d) language and  EPA’s interpretation.) Under EPA’s interpretation, Sec. 111(d)  can be used to regulate CO2 emissions from existing coal-fired power plants because CO2 has not been regulated under Sec. 112 as a hazardous air pollutant.

As a policy matter, EPA certainly seems to have the better interpretation; otherwise, the language in Sec. 111(d) would create a loophole preventing regulation of a dangerous air pollutant from an existing  source (in this case, a  power plant) simply because the facility  also emits hazardous  air pollutants regulated under Sec. 112.  If EPA’s interpretation is challenged, the question will be whether the court recognizes the existence of a conflict in the statutory history of Sec. 111(d)  and defers to EPA’s interpretation.

DENR quotes the Natural Resources Defense Council (NRDC) in support of the more restrictive interpretation of Sec. 111(d), but the NRDC comments concerned  an EPA  rule regulating  mercury emissions  from power plants. Since mercury had been listed as a hazardous air pollutant under Sec. 112,  NRDC challenged EPA’s decision to use Sec. 111 instead of  Sec. 112 as the basis for the Clean Air Mercury Rule (CAMR).  NRDC did not argue that EPA lacked authority to  regulate emissions of other pollutants  from the same source  under Sec. 111 and the federal court decision in the CAMR case did not decide that issue.  (The Kushman/Coleman paper notes that the CAMR decision erroneously says that  EPA conceded a lack of authority.)

DENR Objection: Sec. 111(d) cannot be used to regulate pollutants listed under Sec. 108 of the Clean Air Act (42 U.S.C. § 1408).

Counterpoint:  DENR correctly notes that Sec. 111(d) cannot  be used to regulate an air pollutant  already covered by an ambient air quality standard  or  listed for development of an ambient air quality standard under Clean Air Act Sec. 108. But EPA has not adopted an ambient air quality standard for CO2 or listed CO2 under Sec. 108. The  DENR presentation assumes that EPA’s   2009 finding that CO2 (in combination with other greenhouse gasses) endangers public health and welfare  automatically resulted in a  Sec. 108 listing. The 2009 “endangerment” finding was made under Sec. 202 of the Clean Air Act as a necessary first step toward regulating motor vehicle emissions of  greenhouse gasses. But an “endangerment” finding by itself does not cause a pollutant to be listed under Sec. 108. The two are distinct actions.

DENR Objection: Sec. 111(d) requires controls on individual emission sources; the “performance standard”  cannot be met by alternative  CO2 reduction measures (such as energy efficiency and increased use of renewable energy sources) allowed under the proposed EPA rule.

Counterpoint: This again appears to be a much more open question than the presentation would suggest. EPA’s proposed rule gives states the flexibility to use measures other than  pollution  controls on existing power plants in developing the “standard of performance”  required under Sec. 111(d).  EPA identifies four “building blocks” : increased efficiency at existing  coal-fired units; transition  from coal to natural gas;  greater reliance on nuclear energy and renewable energy sources; and management of electricity demand.   There may well be a debate over what can be considered a “standard of performance” under Sec. 111, but the question has not been settled. A number of legal scholars endorsed a similarly broad interpretation of the “standard of performance” under Sec. 111  well before release of the proposed EPA rule.  (You can find a  2011 discussion  paper on compliance flexibility under Sec. 111  here.)

EPA’s interpretation is also entitled to deference where Congress has not clearly required (or barred) a particular approach to implementation. The federal court decision cited by  DENR  as rejecting  pollution trading under Sec. 111, ASARCO, Inc. v. EPA,   was effectively overruled by the later U.S. Supreme Court decision in Chevron U.S.A., Inc. v. Natural Resources Defense Council, Inc.,  467 U.S. 837 (1984).    In Chevron, the court upheld  EPA’s interpretation of “stationary source” to encompass all of the emission sources at a facility  —  an outcome  contrary to the earlier ASARCO decision-giving industry the flexibility to modify individual sources at a facility within a facility-wide emissions cap.   The Chevron decision also made a very clear statement about deference to agency interpretation: “When a challenge to an agency construction of a statutory provision, fairly conceptualized, really centers on the wisdom of the agency’s policy rather than whether it is a reasonable choice within a gap left open by Congress, the challenge must fail”.  EPA’s interpretation of the  “standard of performance” language in Sec. 111 to allow greater compliance flexibility and lessen the regulatory burden on electric utilities should be entitled to the same deference.

Whatever the strength or weakness of DENR’s legal analysis of the proposed CO2 rule for existing coal-fired power plants,  the fact of the critique certainly sends a message. It suggests that the McCrory administration may intend to  oppose the proposed rule whether the impact on North Carolina will be positive or negative.