Speaking of Coal Power: BACT to the Future

This August, Peabody Energy’s 1,600-MW Prairie State Energy Campus project in Illinois won a major federal appeals court decision, removing the last obstacle to groundbreaking. The six-year regulatory review process ended with an unsuccessful Sierra Club challenge to the $2.9 billion project’s air permit. The decision is sure to reverberate across the nation, and I hope it will invigorate other coal projects facing the same hurdle.

The environmental group argued that the use of "best available control technology" (BACT) to control Prairie State’s air emissions would require it to burn coal from Wyoming’s Powder River Basin, rather than high-sulfur local coal from an adjacent mine. Obviously, this position did not enjoy wide support in Illinois.

Keeping It Real

Writing for a unanimous court, Judge Richard Posner found that while the federal Clean Air Act (CAA) allows use of "clean fuels" as a control method, there is a common-sense limit to the provision’s implementation by the Illinois Environmental Protection Agency. He wrote that, "nuclear fuel is clean, and so the implication, one might think, is that the agency could order Prairie State to redesign its plant as a nuclear plant rather than a coal-fired one, or could order it to explore the possibility of damming the Mississippi to generate hydroelectric power, or to replace coal-fired boilers with wind turbines. That approach would invite a litigation strategy that would make seeking a permit for a new power plant a Sisyphean labor, for there would always be one more option to consider."

Posner observed, "The project that must be addressed when evaluating BACT is the project for which an application has been submitted, i.e., a proposed mine-mouth power plant…. Accordingly, the use of a particular coal supply is an inherent aspect of the proposed project."

The three judges of the 7th Circuit U.S. Court of Appeals in Chicago were unanimous in their decision.

A Powerful Message

The court’s decision has great significance to developers of the next generation of U.S. coal plants. In essence, it makes the builder of a proposed plant responsible for defining its fuel source and power generation technology (for example, supercritical or conventional boilers, or integrated gasification combined-cycle). Following those definitions, it then falls to the air permitting authorities to define BACT in line with the plant’s design and technology advancements.

Many interveners have tried to flip the sequence by attempting to define a particular power generation technology (typically, IGCC) as BACT for all coal-fired projects. The selection of any generation technology for a particular project must be made based on inputs from stakeholders, the demonstrated need for the project, and its economics. The court’s decision on Prairie State appears to have put the lid back on Pandora’s Box.

Bruce Niles, director of the Sierra Club’s National Coal Campaign, said his group has not decided whether to appeal the decision either to the full 7th Circuit or to the U.S. Supreme Court. I encourage them to do just that. If the Supremes uphold the decision, common-sense implementation of the CAA would become the law of the land, rather than just in the jurisdiction of the 7th District Court. I doubt the Sierra Club will run that risk.

Peabody wasted little time; the groundbreaking ceremony for Prairie State (see photo this page and cover) was October 1. Bechtel Power is the lead contractor and will oversee site work. It has already ordered Babcock & Wilcox supercritical boilers, Toshiba turbines, and emissions control equipment from Siemens Power Generation. Unit 1 is expected to come on-line in 2011, with the second unit following a year later.

Just goes to show that patience is a virtue in this business.

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