Energy contractors know well that predicting energy demand, and how the demand would be met, has been more art than science the last several years. The downward economic cycle, recent strides in energy efficiency, volatility in fuel costs and emissions concerns have not only made electricity demand difficult to gauge, they have made it difficult to predict what types of new energy construction the power producers should be building for their customer bases. The recent boom in natural gas has moved gas-fired plants to the head of the class for the time-being, leaving many to ponder the fate of the United States’ aging fleet of coal plants.
Just today, a divided Supreme Court has added some clarity to this murky picture by upholding the EPA’s recent power plant emissions regulations that take specific aim at coal-fired plants. The new EPA rules effectively require a thirty percent reduction in carbon emissions by the energy industry, and coal-fired plants (the biggest emitters), will be targeted in years to come.
USA Today describes the upshot of the ruling as follows:
The decision only removed one method the administration uses to regulate greenhouse gas emissions at power plants, refineries and other stationary sources, leaving other methods in place. That likely means that the administration will move ahead with its new regulations on existing coal-fired power plants, setting off a new wave of lawsuits. . . .
[The] EPA can require greenhouse gas permits from industries already required to get the permits for other pollutants.
The high court ruled 5-4 in 2007 that greenhouse gases qualify as an air pollutant, even though their impact isn't as direct as others. That decision gave the EPA authority to regulate tailpipe emissions from motor vehicles. The stationary source regulation was the next step in the process.
Unlike other air pollutants, carbon dioxide emissions that contribute to global warming are so ubiquitous that the EPA raised the law's threshold level requiring a permit from 100 tons per year to at least 75,000 tons.
A number of coal industry participants are moving to dampen the effect these new regulations will have on coal, but the EPA appears to have scored a victory this round.