Obama Climate Agenda Suggests Fossil Fuel Power Plants Face Expensive Choices

Speaking at Georgetown University on Tuesday afternoon, President Barack Obama outlined a highly anticipated collection of new and expanded initiatives aimed at curbing the nation's greenhouse gas emissions and addressing global warming -- from tougher fuel-economy rules for vehicles and expanded use of renewable energy, to improved efficiency requirements for both buildings and household appliances.

But perhaps the most historic -- and almost certainly the most contentious of the president's proposals -- involved new greenhouse gas emissions limits for the nation's existing fleet of power plants. In the absence of congressional action on climate change, and using his existing authority to regulate greenhouse gases under the federal Clean Air Act, Obama said he would call on the Environmental Protection Agency to develop new rules that would curb carbon dioxide emissions from the hundreds of operating coal and gas-fired electricity generators around the country.

The call for emissions limits on existing power plants comes on the heels of tougher standards being developed by the EPA for the construction of new plants, first proposed during Obama's first term. The administration aims to have the rules for new plants in place later this year. Emissions limits for the existing fleet may be proposed by June 2014, with a goal of finalizing them by 2015.

Whether those timelines will be met, however, is far from clear, not least because the sort of add-on technologies and systems that would allow the largest polluters to capture their greenhouse gas emissions and safely store them, for the most part, remain wildly expensive and untested on a commercial scale. As such, critics of the president's agenda -- including many advocates for coal-fired power plants, which produce the largest share of greenhouse gases in the electricity sector -- have vowed to file legal challenges to measures they say would effectively strangle their industry and drive electricity costs skyward.

"We're not going to let the president wipe out the coal industry," declared Tim Phillips, president of the conservative group Americans for Prosperity, during a press conference ahead of Obama's speech Tuesday.

Just how the new regulations would play out in the marketplace is, of course, difficult to predict, and the coal industry has struggled for reasons that have little to do with new or existing regulation -- including a boom in shale gas development, which has made it considerably cheaper for utilities to simply shutter old coal plants or convert them to burning natural gas.

But while the administration has yet to fully settle on a clear threshold for power plant emissions, whether from new or existing facilities, there's little question that many electricity generators will face some tough choices. Coal- and gas-fired power plants account for nearly 70 percent of the nation's electricity, with the power generation sector as a whole accounting for more than a third of greenhouse gas emissions from all sources in the U.S.

Taken by itself, coal is the big dirty -- accounting for about 40 percent of our electricity supply but 80 percent of electricity-related greenhouse gases.

Cleaning up the emissions profile of coal currently takes one of three tacks. In some cases, developers have been able to exploit advanced alloys to build coal boilers able to withstand incredibly high pressures and temperatures -- a boon for improving the efficiency of coal plants. Such plants, known technically as "supercritical" and "ultra-supercritical" coal plants, use less coal to extract each unit of electricity, resulting in lower overall emissions. Another promising technology converts coal into a synthetic gas, which in its most advanced form is also more efficient and less carbon-intensive than conventional coal combustion.

Both of these methods -- often called "clean coal" -- remain in their early stages, are expensive, and represent a fraction of the global coal plant population, both proposed and existing. For the most part, American coal-fired facilities, like those in most of the rest of the world, rely on comparatively simple, decades-old pulverized coal technology that is highly polluting and inefficient.

Further, only the newest natural gas-fired plant designs could conceivably meet any meaningful greenhouse gas emissions standard for newly built power plants. Most older coal and gas plants, and even the most advanced super- and ultra-supercritical coal-fired technologies, would fall short.

For these, the only options in a carbon-constrained world be to shut down or attach some form of carbon capture and storage, or CCS, technology, which seeks by a variety of means to collect greenhouse gas emissions before they are released into the atmosphere, and then permanently store them safely underground.

At the moment, CCS remains prohibitively expensive. In a 2010 report, the Department of Energy estimated that CCS technologies would make construction of a new, conventional coal plant as much as 80 percent more expensive. Plants with newer, more efficient designs would expect a 35 percent cost increase, the agency found, and other analyses have suggested that, as things stand, retrofitting existing plants with carbon-capture systems could be more expensive than building new plants with CCS implemented from the start.

And yet other research has suggested that the goal of limiting global average temperatures from increasing more than 2 degrees Celsius -- a benchmark that many governments have committed to -- would be prohibitively expensive without CCS. "Achieving the [2-degree scenario] without CCS," the Paris-based International Energy Agency has declared, "will be very challenging and costly."

Meanwhile, atmospheric concentrations of carbon dioxide have recently passed a threshold -- 400 parts per million -- that many scientists have suggested is well beyond what is needed to avoid serious implications from rising temperatures.

In that sense, the stakes for unlocking the promise of CCS would seem incredibly high.

In an effort to spur development and drive down costs, Obama's new climate plan calls for $8 billion in new federal loan guarantees aimed at developing various advanced fossil energy technologies -- including some that would fall under the general rubric of CCS. This comes atop some $6 billion that has been appropriated by Congress since the 2008 fiscal year for carbon capture and storage research, development and demonstration at the DOE Office of Fossil Energy, according to a Congressional Research Service report published earlier this month.

But these sums have done little to drive down costs for systems that have struggled to get off the ground.

"It's an expensive technology now," said Michael A. Levi, a senior fellow for energy and environment at the Council on Foreign Relations. "Everyone knows that you need to get some demonstration plants going, but we've had a lot of trouble getting a meaningful number of those online. And even if we have one or two, well, that's not exactly conducive to rapid commercialization."

A handful of truly large-scale, power plant demonstration projects are being planned or built in the United States, and several others are being mounted globally. But some of these -- including the FutureGen project in Meredosia, Ill., which has moved forward only in fits and starts over the last decade -- have faced long uphill climbs. According to a catalog maintained at the Massachusetts Institute of Technology, only one large-scale demonstration project, in Norway, is currently operational worldwide.

In some cases, the added costs of capturing CO2 at power plants can be offset by marketing the gas to petroleum prospectors, who can use it to coax additional oil out of tapped reservoirs. But the demand for CO2 in such enhanced oil recovery operations is minuscule compared with the amount of the gas that power plants pump into the atmosphere.

This continues to drive research into other ways and places to store captured carbon dioxide permanently underground. But Luke Popovich, a spokesman for the National Mining Association, which represents the coal industry, suggested that atop the the prohibitive capital costs of CCS, a host of legal and liability issues still need to be worked out surrounding the burial end of things.

What happens, after all, if the CO2 starts to leak out?

Popovich also questioned whether the administration's rules for controlling greenhouse gases from new and existing plants would be so restrictive as to starve a host of nascent coal plant designs that, while perhaps not zero-carbon, are considerably more efficient, less polluting and commercially available. "These are capable of eliminating regulated pollutants and greatly reducing CO2 emissions now," Popovich said. "Under the proposed rules for new plants, however, these technologies would be stillborn."

For some green groups that have lambasted Obama for his simultaneous embrace of both renewable energy and the continued use and development of domestic fossil fuels, that wouldn't be such a bad thing.

"A sensible climate plan would include a renunciation of the president’s 'all of the above' energy strategy, which promotes biofuels, so-called clean coal, natural gas and dirty and dangerous nuclear power," said Damon Moglen, climate and energy program director with the group Friends of the Earth, in an emailed statement. "In order to address climate change, the president needs to focus on the ambitious development of renewable energy, energy storage and efficiency technologies while setting us on a path which clearly leaves behind the fossil fuel-based energy economy of the 20th century."

Given the global explosion in coal use, not everyone is convinced that's a realistic option. "Why would you take off the table something that can help you in the future?" said Victor Der, general manager for North America operations at the Global CCS Institute, a carbon-capture advocacy organization.

Der, a former assistant secretary for fossil energy at DOE, said government incentives for developing CCS were critical to conquering the climate change problem. He echoed the president's speech Tuesday in suggesting that all means for emissions reductions ought to be embraced.

"The argument that people put forth is an either-or argument," Der said. "But it should be a both-and argument."

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