EPA duly concluded that greenhouse gases are pollutants that endanger human health, and Jackson made the announcement in December 2009, at the start of the U.N. climate-change summit in Copenhagen. Now her agency was required to regulate carbon dioxide. Strategically, Obama and Jackson hoped that this would prompt Congress, fearing EPA overreach, to finally pass the cap-and-trade climate-change bill, preempting their need to issue rules. But in 2010, after Republicans declared a war on what they called “cap and tax,” the bill died in the Senate.
So this January, just before members of the new Congress took their oaths of office, EPA began introducing rules that could ultimately affect every corner of the fossil-fuel industry. Once again, the new rules coincided with a powerful opposing political force—the resurgence of climate-change denialism. As if they hadn’t already been determined enough, conservative Republicans doubled down to fight for the long haul.
COSTS AND BENEFITS
In the trenches of the EPA wars, both sides agree on some things: These rules are long overdue, and they will have a big impact. They will dramatically reduce pollution, improve public health, and help the environment. They will also cost the companies that have to implement them a lot of money.
In coal-burning plants, the pricey process of following the rules involves fitting smokestacks with giant filters—described by one expert as “an enormous vacuum-cleaner bag made out of Teflon-level fabrics” over the plant’s ducts—to trap mercury, particulate matter, ozone, and acidic gases. Plants will also need to install what are known as “wet scrubbers”: slurry walls of water and limestone that, when the coal smoke travels through them, pull out the sulfur dioxide. (The resulting sulfur-dioxide and limestone mix is then turned into drywall.)
In the case of the utilities that own the nation’s 600 coal plants, many will have to invest between $200 million and $1 billion per plant to retrofit the machinery. Construction will take two to five years, although the plants will be able to operate during most of that time.
Not every company has to do all this. According to EPA, just over half of the nation’s coal plants already have the mercury filters, and a growing number have already installed wet scrubbers, either because state law requires it or because they saw the rules coming. Jim Rogers is CEO of one of those companies. Duke Energy provides electricity from coal and nuclear plants to consumers in five states. By following their progress through Congress and the courts, Rogers knew that stringent new emissions caps would hit him sooner or later, so he has spent the last decade investing $5 billion to install screens and scrubbers. “We have not engaged like others have on costs and complaining about EPA—our point is that we have been preparing for many of these regs for years,” wrote Tom Williams, Duke’s spokesman, in an e-mail.
But when it comes to the nation’s oldest coal power plants—such as Virginia’s Potomac River Generating Station, built in 1946, or Pennsylvania’s Mitchell Plant, built in 1948—that kind of investment makes no economic sense. The cost of updating them would be too high, and companies will probably have to close dozens of plants, cutting power generation and jobs.
Energy economists say that it’s not hard to replace the plants going off-line with ones generating power from the nation’s abundance of clean, cheap natural gas. Studies show that a newly discovered supply of shale gas from the Northeast would likely have led to the retirement of many old coal plants anyway. Moreover, companies that spend money to install screens and scrubbers will actually be job creators. A typical power-plant retrofit can employ, at the peak of the work, up to 1,000 engineers, construction workers, and other laborers.
But there is no question that the new rules will force some companies to spend money, raise electricity rates, and lay off workers. A 2010 study by the North American Electric Reliability Corp., which works with the government to protect the nation’s electric grid, warned that the retirement of old coal-burning plants could jeopardize 10 percent to 20 percent of the nation’s coal-fired power. Philip Moeller, an Obama appointee to the Federal Energy Regulatory Commission, also told the House Energy and Commerce Committee that the rules made him worry about the grid’s reliability. “I remain concerned that the timeline for electric-utility planning and implementation is not compatible with the EPA timelines for its new regulations,” he said.
Industry groups make even stronger claims. A study commissioned by the American Coalition for Clean Coal Electricity, a coal-lobby group, concluded that the Good Neighbor rule and mercury regulation alone would increase electricity costs by 12 percent to 24 percent annually, while costing 1.4 million jobs between 2013 and 2020.
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