EPA ruling slams new coal plants

Utah case could create new reasons to go nuclear and stimulate a congressional backlash

Why would a nuclear energy blog care about a coal plant and regulatory issues involving the Clean Air Act? The answer is that utilities facing decisions whether to build new coal plants, or switch to natural gas or nuclear energy, got a whole lot more to think about this week. The outcome may tip the balance more in the direction of nuclear energy.

The New York Times reports that the Environmental Protection Agency (EPA) has managed to spike permits under the Clean Air Act for development of new coal fired power plants for at least the year.

The decision does not affect new natural gas plants, but could cause utilities looking at new generation infrastructure to consider nuclear energy as a zero emission source for base load demand along with wind and solar for variable or peak power.

The ruling is very significant for any utility which is contemplating the switch from coal to nuclear. The cost of controlling CO2 emissions under a new regulatory regime could completely alter the economics of power plant investments even before Congress takes up the issue of 'cap-and-trade' and carbon taxes. New legislation in that policy area isn't expected until 2010.

The NYT reports the decision, which responded to a Sierra Club petition to review an EPA permit granted to a coal plant in Utah, does not require the federal agency to limit CO2 emissions from power plants, something which environmentalists have long sought.

Rather, the NYT reported, it requires the agency’s regional office in Denver to consider whether to regulate carbon dioxide emissions, before the agency gives a green light to build the Utah plant.

The impact of the decision is that it will delay the building of coal-fired power plants across the country, and possibly long enough for the Obama administration to determine its policy on coal, according to David Bookbinder, chief climate counsel for the Sierra Club.[press release]

“They’re sending this permit, and effectively sending every other permit,back to square one,” he said, adding, “It’s minimum a one to two year delay for every proposed coal-fired power plant in the United States.”

The ruling is so far reaching that it could be addressed in the upcoming lame duck session of Congress. With the country's huge investment in coal fired power plants, and plans for new ones, the lobbying pressure on Congress to quickly legislate a solution could be overwhelming.

However, the coal industry reportedly downplayed the effect of the decision. Carol Raulston, a spokesperson for the National Mining Association said, the ruling “merely says what the court has said, that the EPA has the authority to regulate greenhouse gases under the Clean Air Act."

However, she also told the NYT, before rulemaking occurs, EPA has to make an “endangerment” finding, which has not yet been done. An “endangerment” finding would involve the EPA declaring that carbon dioxide is a danger to public welfare, and would lead to regulation.

“We still believe, as do many in Congress, that the Clean Air Act is not very well structured to regulate greenhouse gases, and that Congress ought to address this through legislation,” added Ms. Raulston.

In reality, that statement is a coal-fired train barreling down the track with a full head of steam inbound for Union Station. Congress may find that in addition to worrying about a bailout for the auto industry, it will also have to tackle a nasty regulatory dispute in a very short period of time.

Environmental groups told the NYT they see the decision was part of a larger debate over whether and how the Clean Air Act might be used to regulate greenhouse gases. They are expected to push the new Obama administration to impose limits on CO2 coming from sources like coal fired power plants through the normal permit process.

In doing so the environmental groups, some of whom bitterly oppose new nuclear power plants, may be taking the very action that will create new reasons to build them.

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