The EPA’s Clean Power Plan

On August 3, 2015, President Obama and EPA announced the Clean Power Plan. The plan’s  summary states: “Shaped by years of unprecedented outreach and public engagement, the final Clean Power Plan is fair, flexible and designed to strengthen the fast-growing trend toward cleaner and lower-polluting American energy. With strong but achievable standards for power plants, and customized goals for states to cut the carbon pollution that is driving climate change, the Clean Power Plan provides national consistency, accountability and a level playing field while reflecting each state’s energy mix. It also shows the world that the United States is committed to leading global efforts to address climate change.” Although the plan addresses a number of different strategies for addressing climate change, its primary focus is on carbon dioxide emissions from power plants with key goal to cut carbon dioxide emissions from the power industry to 32 percent below 2005 levels by 2030. And to achieve this, the plan envisions a significant increase in renewable energy, in particular to replace coal plants that are the primary source of carbon dioxide emissions.

Almost immediately, the various stakeholders, supporters, and opponents began lining up to make their various cases, pro and con, regarding the plan. Most reactions were as expected. Democrats in general appeared to applaud the plan as making an historic step toward meeting the nation’s obligation to tackle global warming and improve the health of Americans. Many Republican vocally criticized the plan as leading to increased electrical costs that will impact the most vulnerable consumers, the poor and seniors, forcing coal-fired plants to shut down, which will impact the local economies in many rural communities, and reducing grid reliability. Unsurprisingly, environmental organizations are strongly behind the plan, and most scientists appear to be supporters.

Beyond these obvious responses, OWOE sees four critical issues that will be battled in the coming months/years:

1) Legal – less than a week after the plan was unveiled, the first steps have already been taken toward filing lawsuits challenging the plan. Previous such lawsuits have gone all the way up to the Supreme Court, which is a multi-year process. The big question here will be how much progress toward the plan’s goal can be made in parallel.

2) Political – Even in states that may see a net benefit from the plan, publicly elected officials will likely see political gains to be made by opposing the plan.  Texas has been cited as the prime example of this. Texas has been aggressively pursuing wind power and is now the number 1 producer of wind power in the US with over twice as much wind generation currently installed as the number 2 state, California. Texas also has vast reserves of gas, which will be one of the fuels to replace coal in the short term. However, the past two Texas governors have sued the EPA as a political strategy to energize their base Republican supporters by portraying the Democrats and Obama administration as pro-regulation and anti-business.

3) Economic – With the dramatic increase in low-cost natural gas supplies made possible by the fracking boom, coupled with rapidly dropping costs for wind and solar power, market forces have already resulted in the retirement of a significant number of coal-fired plants. These have typically been older and smaller plants that were already struggling to meet current environmental regulations. That pressure will continue even without the plan’s new, more stringent requirements.

4) Technical – The vast majority of scientists agree that carbon dioxide emissions are the primary contributor to global warming, which leads to the logical conclusion that replacing electricity generated by coal-fired plants by other sources is the right step toward mitigating the problem. However, there are unique aspects of power generation and the operation of the nation’s electrical grids that some industry experts believe will limit the amount of wind and solar power that can be absorbed. A quote by Mark Mill’s in Forbes: “The idiosyncratic physics of electricity will ultimately doom the aspirational goals of the new 1,560 page Clean Power Plan, more than will an army of lobbyists, lawsuits and laborious studies.” Key issues such as grid reliability, electrical power availability, and power system security must be addressed along with the cost associated with implementation of the plan.

Regardless of what side one takes in the debate, it looks to be a wild journey ahead. OWOE is looking forward to the technical challenges, excitement, and drama that is sure to come as the US tries to find the best course to the future of energy in this country.

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