Coal Industry Fighting for Survival on 7 Fronts

The 'war on coal' started long before Obama took office to control the costly and deadly health impacts of an otherwise cheap and abundant fuel.

Industry groups have long blamed President Barack Obama, seen here with his former senior adviser John Podesta, for the so-called "war on coal." With the exception of the Clean Power Plan that Obama has pushed forward, almost all of the coal regulations were first promulgated before or during the administration of George W. Bush. Credit: White House photo

Editor's note: This article is part a series of stories by InsideClimate News reporters exploring the future of the coal industry, Coal's Long Goodbye: Dispatches From the War on Carbon.

When Duke Energy announced a billion-dollar plan to shut down a 50-year-old coal power plant, switching the 376-megawatt site over to cheap natural gas and clean solar, the company proclaimed the "end of the coal era in Asheville, N.C."

The largest electricity plant in western North Carolina—where Duke has closed half its coal-fired plants in the past five years—burns 700,000 tons of coal each year, some 6,300 rail cars full. Anti-coal campaigners have sought its closure for years.

Across the industry, old plants like this one are closing under the weight of a broad range of federal regulations, and under competitive pressure from natural gas and renewables. Nearly 200 have closed in the last five years. Dozens more are nearing the brink.

This closure illustrates just how many forces have been assembled on one side of the so-called war on coal. For decades, coal has been fighting for its survival on many different regulatory fronts at once, from limiting climate-warming carbon to lung-scarring pollutants to water-soiling waste. The regulations are often looked at and judged in isolation, but they work in concert, and their combined power has gathered so much force that even Duke, which had resisted ending the use of coal in Asheville, now calls it a "win-win-win" for the company, the community, and the environment.

At the Asheville plant, Duke said, the links between various pollution targets were plain. As gas and solar replace coal there, sulfur dioxide emissions, which environmentalists had complained were hitting unhealthy levels, would go down 90 to 95 percent; nitrogen oxides down 35 percent. Mercury pollution, being regulated for the first time this year, would drop to zero. Water withdrawn from nearby Lake Julian, for cooling, would go down 97 percent, and water discharges would drop 50 percent.

Coal ash, an especially sore point for Duke after a spill last year into the Dan River led to criminal prosecution of the company and a recent $102 million fine, would be brought under control in Asheville, where containment ponds were targeted for closure.

And the carbon dioxide emission rate per megawatt of electricity would be 60 percent lower at the new, efficient plant Duke plans to build. That would be a significant step toward meeting the state's tough new targets under the Obama administration's proposed crackdown on the greenhouse gas, a regulation that calls for CO2 emissions to be cut 40 percent across the state.

It's not entirely certain how much coal will be driven out of the market by the EPA carbon rules, known as the Clean Power Plan, because they give states a lot of latitude in how to meet emission targets. But according to the latest government estimates, the carbon dioxide regulations could bring about the closure of an additional 50 gigawatts of coal-fired capacity in the decades ahead, on top of 40 gigawatts that would be expected to close without new controls on carbon.

According to Ken Colburn of the Regulatory Assistance Project, a group that advises energy and environmental regulators around the country, utilities should integrate plans to cut carbon emissions with required reductions in other pollutants in order to avoid repeated, costly investments. Otherwise, inefficient and costly pollution controls may render plants unable to compete in the marketplace. (RAP, as the group is known, has developed a model known as IMPEAQ for this purpose.)

"How many times do you want to beat your head against this wall?" Colburn said of power companies that only recently addressed the need to control mercury, and now must reduce carbon emissions, and soon will likely face tougher limits on ozone. "I hope that behind the scenes, utilities are trying to look at a comprehensive picture."

Coal's Hidden Costs

Perhaps no industry has inflicted such widespread costs on society as coal. From debilitating black lung disease to the devastating removal of whole mountaintops, from decades of lung-scarring smog to unrestrained emissions of greenhouse gases, coal has imposed its own deadly taxation—hiding the charges under the smoky cloak of cheap and abundant power.

In a major study published in 2009, the National Research Council estimated that the non-climate pollution damages from smog, soot and acid rain brought on by burning coal amounted to about $62 billion per year, a hidden cost of more than 3 cents for each kilowatt/hour of electricity produced. (The climate costs, it said, were harder to estimate, but probably ranged from 1/10th of a cent to 10 cents per kWh.)

A more comprehensive analysis, published in the Annals of the New York Academy of Sciences in 2011, put coal's hidden costs even higher, at a mid-range estimate of nearly 18 cents per kWh, a stunning penalty on the public of between one third and one half a trillion dollars annually.

So, adding the carbon rules on top of regulating coal's other pollutants comes with enormous health benefits, far outweighing its costs. And the regulations have not been cheap: the EPA estimates that pollution controls of all kinds imposed by the Clean Air Act Amendments of 1990 would amount to $65 billion a year by 2020. (The benefits, the agency has always argued, are vastly greater.)

In one landmark section of the 1990 law, Congress took on sulfur dioxide's contribution to the devastating problem of acid rain with a cap-and-trade approach that brought about significant reductions in pollution, effectively solving the problem at a much lower cost than was expected. Several other pollution programs over the years adopted the cap-and-trade approach, which was generally favored for its market-based efficiencies.

But notably, an attempt to pass a cap-and-trade bill controlling carbon dioxide collapsed in 2010. Instead, the EPA was left to propose a much more complicated regulatory package under the Clean Air Act. Under its plan, it will be up to the states whether to rely on regional cap and trade, or on other approaches including efficiency and conservation, fuel switching, and so on.

If the rules survive challenges, the 25-year-long crusade to control coal pollution will have reached a historic milestone—the first time the nation reins in the emissions of carbon dioxide from what was once its premier fuel, but has fallen on hard times.

7 Fronts in the Coal War

Of seven developing regulations on coal identified by the Carbon Tracker project in a recent report on the financial risks facing the industry, only two are expressly aimed at controlling carbon dioxide. The rest were aimed at conventional pollutants. They "have been significant in continuing to reduce U.S. demand for coal even when the US natural gas price has risen, such as between the start of 2012 and mid-2014," the report said.

Here are some details on several of the regulatory fronts in the coal war:

—MATS, The Mercury and Air Toxics Standards. Finalized in December 2011, MATS requires existing and new coal-fired power plants to install emissions controls by April 2015, with case-by-case one-year extensions. Many power plant operators have said they intend to shut down plants rather than spend the money, significantly reshaping the industry's capacity toward natural gas and renewables. In March, the Supreme Court heard oral arguments in a case challenging whether EPA had adequately taken the rule's costs into account when it determined that the rules were, as the law put it, "necessary and appropriate." A ruling is expected in June.

—National Ambient Air Quality Standards (NAAQS). Every five years the EPA is required to update standards for six common pollutants—lead, carbon monoxide, sulfur dioxide, nitrogen oxides, small particulate matter, and ozone, tightening the clean air law's goals to whatever level the latest science says would best protect the public's health. After years of back-and-forth, the agency proposed last November to set the new standard for ozone, a corrosive pollutant that is especially bad for people with asthma, at the most stringent level to date—probably between 65 and 70 parts per billion. (The agency is also taking comment on an even tighter 60-ppb standard.) Many states have not yet met the current standard, 75 ppb.

—The Cross-State rule. The cross-state air pollution rule (CSAPR) helps downwind states deal with nitrogen oxides and sulfur dioxide that drift across their borders and puts them out of compliance with air quality. Set up by the EPA in 2011, the regulation was vacated by an appeals court in 2012, but the Supreme Court reinstated it last year and its first-phase requirements took hold in January; a second phase begins in a few years, but some remaining legal issues are still being litigated. Most power plants in 28 states, mainly in the east, will be affected by this regulation, which uses a cap-and-trade approach.

—Cooling Water. Coal-fired power plants are thirsty beasts—they draw in millions of gallons of cooling water from nearby lakes and streams, often sucking in and killing fish and other small creatures. Issued in May 2014, the EPA's regulations were more flexible than environmentalists wanted, limiting the industry's costs somewhat. But green groups have sued to get the rule tightened. Another proposed rule, to regulate toxic metal contaminants in water discharges, may require power plants (especially those that burn coal) to upgrade wastewater treatment equipment.

—Coal Ash. More than 30 years in the making, these rules for the first time set national minimum standards for disposing of coal combustion residuals—fly ash, scrubber byproducts and bottom ash. The EPA last December issued a final rule setting solid waste standards as a non-hazardous waste, an important concession to industry. Although this is a lighter burden on industry than might have been imposed, it will raise waste disposal regulations at more than a thousand impoundments where ash from hundreds of plants has been stored.

—New Power Plants. The first step in controlling carbon dioxide emissions from power plants that burn fossil fuels, the EPA's proposal set a tight new standard for plants that burn natural gas, and in effect declared that no new coal-fired plants could be built unless they incorporated technology to capture the carbon dioxide emissions and bury them in the ground. Carbon capture and sequestration (CCS), as this is known, is expensive and technically challenging, and the industry and its allies have objected that it is not yet proven to be feasible and hence cannot be required. There have been indications the EPA may back away from this requirement when it issues its final rule. That would weaken the pollution standard, but might strengthen the rule against legal challenge; and in any event, new coal-fired plants are not considered economically viable at current prices for natural gas and renewables.

—Existing Power Plants. Finally, there is the administration's proposal to overhaul the entire utility industry by setting strict new limits on the emissions of carbon dioxide from existing power plants. New state-by-state performance targets are based on four main approaches that the agency says could, in some combination, achieve deep reductions in emissions. These include burning coal more efficiently in plants that continue to operate; shifting the dispatch of power on the grid from coal plants to those burning natural gas; increasing the use of renewables, chiefly wind and solar, which account for most of the growth in generating capacity; and creating incentives for homes and businesses to conserve electricity, reducing overall demand. States would be allowed to use other methods, too, and would be encouraged to join interstate emissions schemes like the Regional Greenhouse Gas Initiative, or RGGI, a successful cap-and-trade network formed by several states in the Northeast.

Taken together, all these regulations form a comprehensive assault on the use of coal in the power sector. It's not unlike a very aggressive course of medical treatments for cancer, one that includes drugs, radiation, surgery, bone marrow transplants and a severe diet.

If, as a result, coal does give up the ghost, it will be a long goodbye. Modeling studies done by research institutions and by the industry generally find, in the words of a study done by the PJM Interconnection, a grid operator in the mid-Atlantic region, that coal and other fossil fuel plant retirements "probably will occur gradually," with the higher-cost units, which tend to be old and relatively small, closing first.

Decades of Inaction

Polluters have argued ever since the modern environmental era began that this kind of cure was worse than the disease.

And those cries only redoubled when President Obama came to office. Industry groups warned first of a regulatory "train wreck," and later adopted the "war on coal" slogan.

Environmental advocates note that the rules have been a long time coming. Even the Obama administration's crackdown on carbon is years behind the schedule it agreed to in a court order.

With the exception of the greenhouse gas controls that Obama has pushed forward, almost all the coal rules were first promulgated before or during the administration of George W. Bush. Many were vacated and remanded to the EPA by the courts. And a few decisions by the Obama administration either delayed or weakened actions proposed by the Bush administration or called for under court settlements.

"Some may question why EPA is undertaking so many regulatory actions at once," a Congressional Research Service report observed four years ago, "but it is the decades of regulatory inaction that led to this point that strikes other observers."

Put another way, the question is whether the foot-dragging that has characterized the broad fight against all forms of air pollution is going to continue for decades more before carbon dioxide is brought under control.

If that happens, the world will bust its carbon budget, and while the planet grows hotter, its air will also probably get dirtier and more unhealthy at the same time.

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