In a move heavy with both symbolism and substance, the Obama Administration today released a new rule limiting carbon dioxide (CO2) emissions from future electricity generating plants in the United States. The long-awaited move has drawn a mixed response, with Democratic allies in Congress praising it and Republican foes attacking it. But while the new measure could help modestly curb U.S. CO2 emissions, analysts predict it will do little to shore up flagging U.S. investment in efforts to develop new ways of capturing the gas at power plants and preventing it from reaching the atmosphere.
In 2009, the U.S. House of Representatives passed a bill that would have capped carbon emissions from U.S. utilities. But the Senate failed to go along, and since then "we've seen a decline in both public and private funding for research and development of carbon capture and storage (CCS)," says Howard Herzog, a senior research engineer and climate specialist at the Massachusetts Institute of Technology in Cambridge. "It's not clear that this is enough to dampen that downturn."
The new rule would impose for the first time a cap on the amount of climate-warming CO2 that can be released from a power plant that burns a fossil fuel. In particular, the U.S. Environmental Protection Agency (EPA) is proposing that new plants emit no more than about 454 kilograms of CO 2 per megawatt‐hour. The rule, which would go into effect in 2013, would have the biggest impact on coal-fired plants. But it would not apply to existing plants or those already under construction.
Although imposing a cap is seen as a substantive step toward reducing carbon emissions, it is unlikely to have much impact on current U.S. energy-industry practices. Utilities now favor new power plants fueled by relatively cheap natural gas, which emit about one-half of the CO 2 produced by coal-fired plants. Nearly all gas-fired power plants built in the United States since 2005 would already meet the standard, according to EPA, as would typical gas plants on the drawing boards. So, in practice, analysts say the new standard will probably result in few—if any—immediate changes in how utilities build or operate new power plants.
"They've essentially adopted a 'gas plant' standard," says Sally Benson, director of the Global Climate and Energy Project at Stanford University in Palo Alto, California. "Your emissions have to be as good as a gas plant's, … but there is not a lot of investment going into coal-fired plants anyway."
EPA did leave the door open for companies that want to build new coal plants, however, by allowing utilities to phase-in CO2 controls over decades. For example, "a company could build a coal‐fired plant and add CCS later," an EPA fact sheet explains, so long as the plant's 30-year average of emissions met the new standard.
Few companies are likely to take that route so long as natural gas prices remain relatively low, say Benson, Herzog, and other analysts. And that means little increased demand for developing new CCS technologies that would make coal plants more competitive under the new standard.
"Back when everyone was fairly certain that we were going to have [a new law capping carbon emissions], there was a lot of serious planning and investment in CCS," says Benson. But the fact that the new standard doesn't cover existing plants, and makes it relatively easy for gas plants to comply, could further reduce incentives to develop better and cheaper methods for separating CO2 from emissions and then burying or storing the gas.
In the end, says Benson, a utility company's decision about the type of fuel to burn comes down to cost. "It is going to be hard to justify putting in a [CCS] unit," she says, "as long as there is a lower-priced alternative."
EPA is expected to finalize the rule later this year, after a public comment period.