White House Weighs Emission Rules
February 7, 2013
The Wall Street Journal
PETER NICHOLAS and KEITH JOHNSON
President Barack Obama in next week's State of the Union speech will lay out a renewed effort to combat climate change that is expected to include using his authority to curb emissions from existing power plants, people who have talked to the administration about its plans said.
The action, building on a pledge in the second inaugural address, fits within Mr. Obama's larger strategy of making full use of his executive authority in areas where Congress is putting up obstacles to his agenda.
The speech, to be delivered Tuesday, isn't finished.
Mr. Obama is likely to signal he wants to move beyond proposed Environmental Protection Agency rules on emissions from new power plants and tackle existing coal-fired plants, people familiar with the administration's plans said.
The EPA has prepared rules for existing plants to minimize pollution from particulate matter, mercury and other toxins. But this would be the first time the agency regulates existing plants to curb emissions of the greenhouse gases scientists believe contribute to global warming.
"You will ultimately see a proposal from EPA to regulate existing power plants," one person familiar with the matter said. "How he talks about it in the State of the Union could be anything from, 'We've taken important steps and we need to take more,' to 'We need to make more [progress] and the next one on the chopping block is existing sources' " of carbon emissions.
No final decisions about what the president will propose next Tuesday appear to have been made. A White House spokesman disputed the accounts of discussions surrounding the president's intentions, but declined to be specific. The spokesman said any decision about the issue "would come later in the year."
Congressional Republicans and businesses have objected to regulating existing plants. Rep. Ed Whitfield (R., Ky.), chairman of the House Subcommittee on Energy and Power, who has coal-fired plants in his district, said such a move would be a "serious misstep" and added, "We're going to be very aggressive in letting them know that if they try to start doing this with existing plants, they're going to have a real battle on their hands."
In the run-up to the speech, Mr. Obama has been "pushing the team to get very specific about how to achieve the goals he set on reducing greenhouse-gas emissions," one former administration official said.
The president may not announce the specific steps in the speech itself. The White House would not specify what policy steps he might take, but said any steps would likely come later.
In spring 2012, the EPA proposed strict emissions limits for new power plants. The proposed limits—1,000 pounds of CO2 per megawatt hour of electricity—would make coal-fired plants all but impossible to build. The average coal-fired plant today, according to the EPA, emits 2,249 pounds per megawatt-hour, about double the average gas-fired plant. The rule is set to be completed later this year.
The EPA is at an earlier stage in deciding what to do about existing power plants, where the economic consequences are much greater.
Although coal has ceded ground to natural gas, it remains the top fuel for generating electricity. According to EPA data released Tuesday, power plants account for about one-third of total U.S. greenhouse-gas emissions.
For months, environmentalists have been urging the administration to target emissions from existing plants.
"Power plants are our largest source of carbon pollution and you have the authority and responsibility to clean them up under the Clean Air Act," environmental groups said in a Jan. 7 letter to the president. The letter also told the president he could "set standards that cut carbon pollution from America's aging power plant fleet at least 25% by 2020 while boosting energy efficiency and shifting to clean energy sources."
Some utility executives are warning about the costs of regulation. Nick Akins, chief executive of Columbus, Ohio-based American Electric Power Co., says limiting emissions from existing plants would be "devastating." Utilities already are investing billions of dollars to upgrade old power plants to comply with other EPA rules, but if greenhouse-gas regulations deem those plants too dirty, those investments could be wasted, he says.
The White House also must decide this year on the Keystone XL pipeline to carry oil from Canada to the U.S. Mr. Obama earlier rejected the pipeline, but Nebraska approved a revised route avoiding environmentally sensitive areas. If he does give the OK, he could assuage environmentalists by taking action to curb power-plant emissions.
According to a 2007 Supreme Court ruling, the EPA has both the authority and the obligation to address greenhouse-gas emissions from existing sources. Under the Clean Air Act, the EPA sets general standards that states must implement. The law gives states flexibility in curbing emissions from existing sources, and the EPA says they could try to meet targets by rewarding energy efficiency or using market-based schemes such as sales of emissions permits.