Some Thoughts on the New EPA Carbon Rule

There has been lots of hyperventilating today following the EPA’s announcement of its new carbon rules.  I’m not going to join in the chorus, because I don’t think the announcement is really that big a deal, particularly for WV.  I laid out my thoughts back in March on the policy failures in WV with regard to having strong credit and offset programs in place.  That train has already left the station, and the war on coal crowd has missed it.  And WV will pay the price.

Here on The Power Line, I like to deal in facts, not overstated benefits or overstated horror stories.  Here is a great graph that Ken Ward posted today in discussing the EPA rule:

The new EPA rule requires coal fired power plants to reduce their carbon output by 30% of their 2005 output by 2030.  The graph shows that WV’s carbon output was 85 million tons in 2005.  As you can see from the graph, carbon emissions have fallen off dramatically since then in WV.  Readers of The Power Line can readily identify the reasons – the recent drop in electricity demand and intense price competition from natural gas.

So WV’s carbon output in 2011 was 72 metric tons, down 13 million from 2005, or about 15% less than the 2005 output.  Ken Ward and Evan Hansen both pointed out that WV is already halfway to the 2030 reductions without really doing anything.  So no, 30% is not 30% for WV, it is really only 15% or a reduction of about 13 million tons of carbon.

Keep in mind also that the deadline for the full reductions is 2030.  That’s more than 15 years away.  There will be a lot of lawsuits, legislative attacks and general resistance in the meantime.  The coal industry is likely to throw its money behind candidates who want to roll back the rule, the way they backed Cheney over Clinton’s enforcement of the new source review prosecutions in 2000.  This rule is an executive branch action and, with a different president, could disappear.

In her statement today, EPA Administrator Gina McCarthy blew the war on coal guys away.  She pointed out a fact of economics in response to their claims that electric rates will rise and little old ladies will freeze in the dark.  Ms. McCarthy said that if electric rates rise, this will increase the value of conservation through energy efficiency improvements and electric bills will actually fall.  You have seen how that works here on The Power Line.

As Ms. McCarthy points out, investment in efficiency technologies and renewable power will increase overall employment when the new rule is fully implemented.  This investment will end up cutting electric bills, not raising them.  This is exactly what has happened in European countries that have strong energy efficiency standards.

West Virginians, particularly the coal industry, will have to adjust to the new reality.  Unfortunately, the people who could be leading this transition in a productive way have decided to throw tantrums and whine.  They have failed us and our state.

3 thoughts on “Some Thoughts on the New EPA Carbon Rule

  1. I’m wondering what this graph measures. Amount of emissions from coal burned in power plants within WV? Emissions from providing power to WV consumers? Or emissions from WV-sourced coal, wherever it’s burned? I figure it’s not the latter, and is probably the first one–but WV power plants provide power to lots more than WV people.

    • Total carbon emissions from coal-fired electric generating plants in WV, regardless of where the power goes or where the coal comes from. Some coal burned in WV plants now comes from Wyoming. Half of AEP’s Mithcell plant’s output goes to KY. FirstEnergy sells all the power generated in WV into PJM and then buys back any power they need for WV customers, so the net amount varies from year to year.

  2. Hey Bill,

    Have you looked at the state-specific targets the EPA has up on their site? From the map at it looks like the EPA is using 2012 carbon intensity & pollution data as a benchmark for what to achieve by 2030. For WV, they write that the carbon intensity cut is about 20% from the 2012 level (2,019 lbs CO2 / MWh to 1,620 lbs CO2 / MWh). In the context of the existing drop from 2005 to 2012, the use of 2012 as a benchmark for WV’s goal seems like good news.

    You’ve got a far better mind than I for this kind of thing, so what do you think?

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