The Environmental Protection Agency (EPA) is tightening rules that limit emissions of mercury and other pollutants from coal-fired power plants, updating standards imposed during the Obama administration. The new EPA rule, when finalized, would increase the limits for mercury emissions from coal-fired power plants by 70 percent. It also would further reduce other pollutants such as lead, nickel, and arsenic. This rule is expected to become final next year. It is one of several rules that the EPA is proposing to rid the United States of its reliable and affordable coal plants. Last month, the EPA released its proposed interstate regulation known as the “good neighbor” rule that puts tougher limits on emissions from power plants, factories and other industrial facilities that cross state boundaries. The United States is moving into third-world-country unreliability in its electric system as U.S. politicians and regulators impose more and more laws and regulations to retire coal plants in favor of wind and solar plants that can only provide electricity when the sun shines and the wind blows. This is occurring in the United States while China and India are building new state-of-the-art coal plants that generate electricity easily for 40 to 60 years.
The proposed rule on mercury will strengthen EPA’s Mercury and Air Toxics Standards (MATS), which have supposedly resulted in a 90 percent reduction in mercury emissions from power plants since they were adopted in 2012 by either forcing advanced control technologies on coal plants, if the plants can remain economic, or otherwise shuttering reliable and affordable coal plants. In 2015, the original MATS regulation were sent back to a lower court by the Supreme Court, in effect blocking the rule, but according to Gina McCarthy, the EPA Administrator at the time, the Supreme Court ruling would not affect matters since “The majority of power plants have already decided and invested in a path to achieve compliance with the Mercury and Air Toxics Standards.” In other words, the damage to the U.S. coal generating fleet had already been done, so apparently the legality had no bearing on the regulation’s effects.
Most of the existing coal plants in the United States have already paid off their capital costs, but these strengthened MATS regulations would make them pay for additional costly pollution control equipment, even though the United States has a remarkable record of clean air and clean-burning energy. That increase along with less operating time to recover costs as more wind and solar plants come online driven by subsidies and mandates could make more coal plants uneconomic. This is consistent with President Biden’s promise to “end fossil fuels.”
The New EPA Mercury Rule
The EPA proposed rule has two broad policy aims: Reduce emissions in the air, while also encouraging the retirement of coal-burning power plants and rushing toward intermittent solar and wind sources that are heavily subsidized by state mandates and federal tax credits. The rule intends to strengthen the limits for mercury emissions from affected coal-burning power plants by 70 percent. It also would further restrict other toxic emissions like lead, nickel and arsenic. Michael S. Regan, the administrator of the EPA, believes that the rule would not be expensive for plant operators to implement because he says there are new technologies that are available for monitoring and controlling of emissions.
However, while the proposed new Mercury and Air Toxics Standards rule would not directly reduce greenhouse gas emissions from power plants and retire coal plants, it is one of several EPA regulations targeting emissions and coal ash ponds that could have that effect indirectly by making coal plants too costly to operate. In the past, Mr. Regan has suggested that an aspect of the Biden administration’s climate strategy by forcing reductions on emissions other than greenhouse gases is a backdoor way to encourage operators of coal plants to shut them down or make a transition to renewable energy. “By presenting all of those rules at the same time to the industry,” Mr. Regan said at an oil and gas conference last year, “the industry gets a chance to take a look at this suite of rules all at once and say, ‘Is it worth doubling down in investments in this current facility? Or should we look at that cost and say now it’s time to pivot and invest in a ‘clean’ energy future?’” A translation of the Washington-speak is that the EPA will present so many regulatory hurdles to coal facilities that they must close and be replaced by renewable energy sources and those replacement technology costs will need to be paid for by consumers.
The EPA estimated that the health benefits over the lifetime of the rule would be between $2.4 billion and $3 billion. The agency put the estimated cost to the industry of complying with the rule between $230 million and $300 million. It is not clear that EPA’s economic estimates will hold up legally. The EPA will accept public comments on the proposed rule for 60 days and will hold a public hearing before a final rule would take effect next year.
Recently, the Biden administration announced that it was making $450 million available for solar plants and other renewable energy projects at the site of current or former coal mines.
China and India Continue to Use Coal Plants for Over Half of Their Generation Needs
While the Biden Administration is busy regulating a shrinking coal fleet here, China’s current coal capacity is larger than the entire generating fleet in the United States from all generating technologies. Moreover, local governments in China last year permitted 106 gigawatts of additional state-of-the-art coal-fired capacity, about four times more than in 2021 and the equivalent of two large coal power plants per week–a total of 168 coal-fired units spread across 82 sites. It was the highest amount that China permitted since 2015. Construction began on 50 gigawatts of those coal plants in 2022, a more than 50 percent increase from 2021 with several projects obtaining permits and financing and starting construction within months of being announced. For comparison, all the generating stations in the U.K. from all sources combined add up to less than the 106 gigawatts that China permitted in 2022 of just coal units. China is expected to add 70 gigawatts of mostly coal- and some natural gas-fired generation in 2023.
China accounts for about half of the world’s coal production and consumption, gets about 60 percent of its electricity from coal-fired power plants, and relies on coal imports to supplement its domestic production. China’s imports of coal from Russia were up 20 percent in 2022, to 68.06 metric tons as other countries turned away from Russian exports due to Russia’s invasion of Ukraine and Western sanctions drove down its price.
India’s power generation grew at the fastest pace in over three decades in its fiscal year that ended at the end of March, with output from coal-fired plants hitting records. Intense summer heatwaves, a colder-than-usual winter in northern India and an economic recovery led to an increase in electricity demand. Power generation rose 11.5 percent to 1,591.11 billion kilowatt-hours in the fiscal year, the sharpest increase since year ended March 1990. Output from plants running on fossil fuels increased 11.2 percent–the quickest growth in over three decades, due to a 12.4 percent increase in electricity generated from coal, offsetting a 28.7 percent decrease in generation from natural gas-fired plants due to a global spike in LNG prices. In the new fiscal year that began April 1, Indian power plants are expected to burn about 8 percent more coal. Electricity generated from coal increased to 1,162.91 billion kilowatt hours with its share in overall output increasing to 73.1 percent – the highest level since the year ending March 2019.
China and India are building and using coal plants to make their power system more reliable as the world pushes to electrify everything from heating to transportation, which will put more strain on the electric grid. China also needs affordable and reliable energy to run its industrial facilities, as it is the largest manufacturer in the world.
Conclusion
The new proposed mercury rule is one of several regulations that the EPA is proposing relating to coal plants. The combined effect of EPA’s set of regulations will lead to premature retirements of coal plants, which is the Biden administration’s goal. But shuttering them too quickly will hurt the reliability of the U.S. electric grid because solar and wind plants, due to their intermittent nature, need expensive back-up power to provide any sense of reliability for the U.S. electric system. While U.S. lawmakers and regulators are destroying the U.S. coal industry, China and India are building coal plants that last for 4 or more decades, generating 60 or more percent of their electricity, for coal plants are reliable and affordable and do not need expensive back-up power that solar and wind plants need.
Senator Shelley Moore Capito of West Virginia said the Biden administration “continues to wage war on coal” with the proposed mercury regulation. Ms. Capito called the regulation unnecessary and said that it “put politics over sound policy.” That is something the Biden administration is continuing to do repeatedly, and electricity price increases that Americans are experiencing are proof of the administration’s success.
