(Bloomberg) — The Obama administration on Monday will
issue rules to cut carbon emissions from U.S. power plants, a
move designed to secure the president’s legacy on climate and
one which has already influenced the campaigns of those who want
to succeed him.
The Environmental Protection Agency will finalize measures
that promise to upend a century of electrical power generation,
as it prods states and utilities to use less coal and more wind,
solar and natural gas. The plan, estimated to cost $8.4 billion,
is among the most complex in agency history and is expected to
face a series of contentious legal challenges from states and
coal producers.
Elements of the plan were released Sunday by the White
House, ahead of the full roll-out. The rules are designed, in
part, to put the U.S. on track to meet the goal President Barack Obama laid out as part of negotiations for a global accord on
climate change. Those talks are set to conclude this at the
Paris climate conference in December.
“It’s time for America, and the world, to act on climate
change,” Obama said in a video message released on the White
House Twitter feed.
The final rule aims to accomplish a 32 percent reduction in
carbon emissions from the nation’s fleet of power plants by
2030, compared with 2005 levels, against 30 percent in the EPA’s
original 2014 proposal. Emissions are already down 15 percent
from that peak.
The plan will accomplish this by in part by giving states
credit for solar or wind projects that break ground in the next
few years, before the rule takes effect in 2022. It will also
force utilities to run natural gas plants more or encourage
customers to use less electricity.
Biggest Source
Power generation, specifically the burning of coal to make
electricity, is the biggest source of carbon pollution in the
U.S., and until now there was no cap on those emissions.
“The way electricity is being produced is being
significantly transformed,” said Michael Brune, president of
the Sierra Club. “It will amount to a move away from fossil
fuels toward clean energy.”
Power plants burning coal produce almost 40 percent of the
nation’s electricity, down from about half just a few years ago.
That’s forecast to decline more as these rules kick in.
The administration has bowed to industry demands, though,
and will include a safety valve that would delay the rules for
individual states if they threaten the reliability of
electricity delivery, according to EPA Administrator Gina McCarthy. “We really don’t expect the safety valve to ever have
to be used,” McCarthy said in a media conference call Sunday.
State Plans
The general EPA plan is actually a set of targets for the
states. States will have to submit plans to the agency by 2018
on how it will achieve the EPA-mandated goal, which begin to
bite in 2022 and phase in through 2030.
The EPA’s initial proposal would have forced states with a
lot of natural-gas plants and scope for renewable power growth,
such as Arizona, to make cuts in emissions of more than 50
percent by 2030.
Meanwhile, coal-heavy states including Kentucky, West
Virginia, Wyoming and Montana faced cuts of 21 percent or less.
The EPA tweaked its forecasts for the amount of natural-gas and
renewable-energy growth it estimates can be accomplished in
those states.
“At the end of the day, you will see state goals more
uniform,” said Brian Deese, a White House adviser on energy and
climate.
Greenhouse Gases
The White House says that while it’s backing off on an
initial deadline for the rule and making other changes to help
states, the final plan will lead to more reductions in
greenhouse gases long term because it will boost carbon-free
energy and rely less on switching from coal to natural gas. The
incentive plan will also reward states that submit plans to the
White House early.
“The states that join the race first, and run it the
fastest, will win both more investment in clean technologies and
less air pollution for their communities,” Fred Krupp,
president of the Environmental Defense Fund, a nonprofit group,
said in a statement.
Democratic presidential candidate Hillary Clinton said the
plan is “a significant step forward” in meeting the threat of
climate change.
“It sets a smart federal standard that gives states the
flexibility to choose how to reduce carbon pollution most
effectively,” Clinton said in a statement, adding that it
promotes a healthier environment and a stronger economy.
RNC Statement
The Republican National Committee said in response to
Clinton’s statement that Obama’s plan will have “devastating
consequences” for the economy and cost jobs.
One thing the EPA didn’t do is bend to complaints from
utilities and discard a separate proposal to require new coal
plants to use expensive carbon-capture technology. While the
only coal plant now under construction has carbon capture, that
rule could mean no more coal plants are built in the U.S.,
industry critics say.
“EPA’s final Clean Power Plan reflects political
expediency, not reality for supplying the nation with low cost
reliable power,” said Hal Quinn, president of the National
Mining Association. On Monday, the group will file a stay to try
to stop the plan from going into effect, he said.
The regulation is also expected to face lawsuits from coal-dependent states, coal producers and some utilities or power
cooperatives. They argue that the EPA is exceeding its authority
and forcing a reorganization of power generation for which it
doesn’t have the legal mandate.
‘Unprecedented Interference’
“State leaders are angry that EPA has finalized an
unprecedented interference into state authority over energy
regulation and markets, clearly inconsistent with statutory and
Constitutional principles,” Scott Segal, a lawyer at Bracewell
& Giuliani in Washington, said in a research note Friday.
Obama pledged the U.S. will cut greenhouse-gas emissions 26
percent to 28 percent by 2025, as part of United Nations-led
negotiations for a global climate accord. With the changes in
this regulation, the U.S. will be on track to meet that goal,
according to the White House.
One advantage of boosting renewables and relying less on
natural gas is that the emission reductions after 2030 will be
greater, Deese said.
To contact the reporter on this story:
Mark Drajem in Washington at
To contact the editors responsible for this story:
Jon Morgan at
Gail Degeorge, Ros Krasny