The Environmental Protection Agency’s (EPA’s) June 2–proposed carbon rule for existing power plants favors nuclear, renewable, and natural gas combined cycle sources, but it also grants coal-heavy states wide flexibility to meet carbon goals with continued coal use, EPA Administrator Gina McCarthy told lawmakers at a Senate oversight hearing on Wednesday.
Six Democrats and six Republicans took up the first hour of the three-hour-long hearing before the full Environment and Public Works (EPW) Committee to make statements about climate change science and the Obama administration’s efforts to slash U.S. carbon pollution, including the EPA’s proposed rules for new and existing power plants.
Under the EPA’s so-called “Clean Power Plan,” existing fossil fuel–fired U.S. power plants must comply with state-specific goals to lower carbon pollution from the power sector by 2030. It consists of two main parts: state goals (calculated as an emissions rate in pounds of CO2 per megawatt-hour) that must be achieved within a 10- to 15-year window after the rule is finalized, anticipated in June 2015, and guidelines to help states develop plans by June 2016 (with a one-year extension option) to meet those goals.
On Wednesday, McCarthy lauded the rule’s wide benefits beyond pollution control. “It’s about increasing efficiency at our plants. It’s about investments in renewables and clean energy. It’s about investments in people’s ability to lower their electricity bills by getting good, clean appliances, homes, rental units. This is an investment strategy.”
She also underscored the plan’s flexibility and lengthy implementation timeframe. The EPA was conducting several hearings during a long 120-day comment period to gather public input on the proposed rule, which could spur changes in the final rule, she noted.
Senate Republicans on Wednesday mainly probed how the EPA calculated costs and benefits associated with the rule, who influenced development of the rule, how the rule could harm the nation’s coal power sector, and whether the rule would make a difference to global climate change mitigation efforts.
To one of Sen. David Vitter’s (R-La.) questions on why the EPA did not include a domestic cost-benefit calculation “as required” for the rule and instead relied on a “global” calculation, McCarthy responded that the cost and benefits of the proposed rule weren’t just the benefits of reduced carbon but also pertained to health. Pressed by Vitter, the top EPW Republican, on whether a domestic cost-benefit calculation was required by law, McCarthy said the EPA did exactly as it was required by the White House’s Office of Management and Budget (OMB).
McCarthy later also explained to Sen. Roger Wicker (R-Miss.) why the cost analysis had been conducted on a “national basis,” not on a state-by-state basis. “The challenge here, was that, sir, we’ve given states so much flexibility, it can only be illustrative because it can only be up to the individual states how they design these strategies to design these objectives.
“Although we’ll over time get more specific as states get more specifics and comments come in,” she added.
McCarthy also told Vitter that if the EPA had “overestimated” the amount of fossil fuel pollution in a state, the agency would want to know that during the comment period. Vitter’s complaint was that the EPA had not factored in two natural gas–fired power plants that were under construction in its assessment of Louisiana, driving its carbon target higher.
And, when Vitter asked, “Did EPA factor into state emission targets . . . economic growth and necessary load growth or did it only factor in demand destruction and reduced growth?” McCarthy answered that the reason that EPA took a “comprehensive” approach is because it recognized each state’s need to grow its economy and design its plan flexibly to meet needs. “Economic growth is considered when we look at energy prices, and we looked at the challenges associated with keeping demand down while the economy grows.”
She restated that the ongoing comment period was important to get the data right before the agency promulgates a final rule.
The Science Dispute
EPW Chair Sen. Barbara Boxer (D-Calif.) spurned declarations by some Republicans that the science behind climate change is not “settled,” allowing McCarthy to sidestep that discussion. Sen. Wicker, for example, presented the Global Warming Petition, signed by more than 30,000 climate-skeptic American scientists (9,000 of whom have doctoral degrees).
But prompted by Sen. Sheldon Whitehouse (D-R.I.), McCarthy later noted that many stakeholders she engages with have moved past debating whether human releases of greenhouse gases have caused a disruption in the Earth’s climate—and were instead focused on how to best to “adapt” to climate changes.
A Lobbyist Lead?
Sen. John Barrasso (R-Wyo.) alleged, citing a July 6 New York Times article, that the National Resources Defense Council (NRDC) played an “outsized” role in crafting the EPA’s Clean Power Plan. The international environmental advocacy group is a “$120-million-a-year lobbying machine backed by Hollywood elites,” he said. “It is absolutely shameful to me that the EPA under the direction here of the administrator, will allow this powerful group of lawyers and lobbyists to draft their regulations—but yet this same administrator refuses to actually listen to the people whose lives and jobs will be severely impacted by these regulations drawn up by wealthy lawyers and lobbyists,” he said.
“Why did you let high-powered Washington lobbyists with the NRDC reach into the EPA and essentially write your climate change rules for you?” he asked McCarthy.
She replied, curtly: “I did not.”
Sen. Barrasso then asked McCarthy how the U.S. could benefit from the president’s climate change plan if the administration failed to secure carbon reduction pledges from China and India at the United Nations climate convention in Paris next year, and if, as with the Kyoto Treaty, the international deal overwhelmingly failed in the Senate.
“We’re going to be left with his domestic climate action plan, which includes your rules for new and existing coal-fired power plants. Can you guarantee success in Paris, and if not, aren’t these policies all pain for America and its citizens, and little gain globally?” he asked.
McCarthy said: “Sir, what I know about these rules is that it will leave the U.S. in 2030 with a cleaner and a more efficient energy supply system and more jobs in clean energy, which is the energy of the future. So no matter what happens internationally, this is of significant benefit to the U.S.”
On Fuel Source Questions
Sen. Deb Fischer (R-Neb.) brought up what she alleged was a contradiction between the first and second of the EPA’s four proposed “building blocks” that, when combined as best achievable by each state, should contribute to the best system of emissions reduction. Building Block 2, which seeks to displace coal-fired steam and oil/gas-fired steam generation in each state by increasing generation from existing natural gas combined cycle capacity toward a 70% target utilization rate, was in “direct opposition” with Building Block 1, which calls for an average heat rate improvement of 6% for coal steam power generating units.
“You can’t run both coal plants less by running gas plants more and then turn around and argue that the heat rate of a coal plant should be improved,” Fischer said.
McCarthy countered that none of the building blocks proposed are “requirements.” The EPA’s analysis projects that by 2030, coal power generation would still make up a dominant share of 31% (compared to 37% in 2012), which means coal-heavy states will continue to invest in coal, she said. “They likely won’t take advantage of the shifting to lower sources, and they won’t need to.”
Responding to Sen. Tom Carper’s (D-Del.) question, “Do you believe that nuclear energy should be on an equal footing as renewable energy to help states meet their carbon goals as part of this proposal?” McCarthy didn’t hesitate.
“Nuclear energy is a zero-emitting carbon, energy-generating technology, and for that reason, we’ve gone to lengths to ensure that states are aware of that and that nuclear is factored into the standard setting process,” she said. The EPA was also aware that some nuclear plants seem to be “‘on the fence’ as to whether or not they are competitive enough in a way that would allow them to go through the relicensing process and make that process worth it.” The agency has asked states to pay attention to the prospect that “replacement of a baseload zero-carbon-emitting unit would be a significant challenge for states who are right now relying on those nuclear facilities,” she revealed.
However, she stressed that wasn’t a requirement.
To Sen. Jim Inhofe (R-Okla.), who probed whether the EPA’s existing authority allows it to enforce improvements in energy efficiency or to mandate a renewable portfolio standard (RPS), McCarthy explained: “Actually, sir, we wouldn’t be requiring any of those things here. What we are requiring is a certain level of carbon dioxide emissions reductions from electricity generating fossil fuels plants. That’s what the EPA would be requiring and mandating.”
“One of the challenges of this rule is that it is so flexible,” McCarthy later told Sen. Ben Cardin (D-Md.) “States have many choices and we’re trying to work with them individually and regionally to explain how the accounting system will work. The only obligation that states have is to achieve state targets in a timely way.”
—Sonal Patel, associate editor (@POWERmagazine, @sonalcpatel)