Earth Policy Institute: The End of an Era — Closing the Door on Building New Coal-fired Power Plants in America

coal fired power plantBy Jonathan G. Dorn

Community opposition, legal challenges, and financial uncertainty over future carbon costs are prompting companies to rethink their plans for coal.

Since the beginning of 2007, 95 proposed coal-fired power plants have been canceled or postponed in the United States—59 in 2007, 24 in 2008, and at least 12 in the first three months of 2009. This covers nearly half of the 200 or so U.S. coal-fired power plants that have been proposed for construction since 2000. The vast majority of the remaining proposals are essentially on hold, awaiting word on whether the Environmental Protection Agency (EPA) is going to impose limits on carbon dioxide (CO2) emissions. With further legal challenges ahead and the regulation of CO2 imminent, 2009 may very well witness the end of new coal-fired power plants in the United States.

An April 2007 Supreme Court ruling is proving to be a seminal decision. In Massachusetts v. EPA, the Court ruled that the Clean Air Act gives the agency authority to regulate CO2 emissions and that the EPA must review whether such emissions pose a threat to public health or welfare. Complying with the Court order, new EPA Administrator Lisa Jackson submitted an endangerment finding to the White House in late March 2009 indicating that human health and welfare are indeed threatened by CO2 emissions. This finding opens the door to regulating CO2 emissions under the Clean Air Act. Such regulation would provide a backup option for curbing emissions if Congress fails to set limits on them through legislation.

Congress, however, is under increasing pressure from grassroots activists to take on Big Coal. Encouraged by calls from former Vice President Al Gore and leading climate scientist James Hansen for civil disobedience to stop the construction of coal-fired power plants, thousands of individuals from across the United States converged on Washington, DC, on March 2, 2009, to protest the coal-burning Capitol Power Plant and to urge Congress to pass legislation to reduce carbon emissions. The rally was the largest act yet of civil disobedience against coal in the United States. (See timeline and data.)

Both Senate Majority Leader Harry Reid and Speaker of the House Nancy Pelosi are strong advocates of regulating carbon emissions and are pressing to get a climate bill through Congress before the United Nations Climate Change Conference in Copenhagen in December. If limits on CO2 emissions are imposed via a carbon tax or a cap-and-trade system, the operating cost of fossil-fuel based power plants would increase. And since the burning of coal releases more CO2 per unit of energy than any other energy source, coal-fired power plants would be hit the hardest. With President Barack Obama calling for a cap-and-trade program to curb carbon emissions, the future for new coal-fired power plants looks tenuous at best.

Even if legislation to regulate carbon emissions does not materialize this year, approval of pending permits for coal-fired power plants is potentially on hold. In November 2008, prior to the endangerment finding, the EPA Environmental Appeals Board determined that the agency’s regional office must consider whether to regulate CO2 emissions before approving an air quality permit for a proposed coal-fired plant in Utah. This not only put the brakes on building the Utah plant, it set a precedent to halt the permitting process for any proposed plant until the EPA determines whether and how to regulate emissions under the Clean Air Act.

At the state level, actions within various branches of government demonstrate the growing distaste for coal. Since May 2007, the governors of Florida, Illinois, Kansas, Michigan, South Carolina, Washington, and Wisconsin have all taken action or voiced opposition to new coal-fired power plants. In her State of the State address in February 2009, Michigan Governor Jennifer Granholm called for an evaluation of “all feasible and prudent alternatives before approving new coal-fired power plants” in Michigan—placing at least five proposed coal plants on hold. Instead of investing in coal plants that would require Michigan to buy coal from Montana and Wyoming, Governor Granholm stated that money spent on improving energy efficiency and tapping renewable energy sources in Michigan would create thousands of new jobs in the state.

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