The coal industry is having a rough year, but it seemed to got a reprieve when the a federal appeals
court overturned the EPA’s Cross State Air Pollution Rule (CSAPR). The rule required reductions of power plant emissions that contribute to ozone and fine particle pollution.
The coal industry cheered the court’s decision while environmental groups panned it Me? I say, “meh.”
I say “meh” and “seemed to get a reprieve” because I spent several months analyzing CSAPR and potential compliance strategies. After some restless nights induced by national hysteria over the rule’s short compliance period, I concluded that complying with the rule was not a big deal. Compliance would
require operational changes such as shifting generation towards lowering emitting units like renewables
or natural gas units. For the most part, coal plants would not require environmental control retrofits,
nor would they be retired. There would be little to no price impact for electricity consumers. Moreover, it became clear those operational changes (and therefore emission reductions) were bound to happen – with or without CSAPR – because of falling natural gas prices.
As natural gas prices fall, gas-fired power plants become cheaper to operate than higher emitting coal
units. Given the steep decline in gas prices, grid operators have therefore shifted generation from coal-
fired power plants to those consuming natural gas. This has led to significant emissions reductions as
seen in recent EPA emissions data – despite the court overturning CSAPR.
The year-over-year reductions for the first half of 2012 are remarkable. For over 450 coal-fired units
included in the EPA’s dataset:
Coal-fired SO2 emissions fell 34%
Coal-fired NOX emissions declined 24%
A portion of the reduction is due to installation of environmental controls at some coal-fired power
plants (the SO2 emissions rate in lbs/MMBTU fell 17%, while the NOX emissions rate fell 5%). Most of the reduction, however, is due to natural gas power plants displacing coal-generation. The fuel switching is evident in the EPA’s coal burn data. During the first half of 2012, 20% less coal was consumed than the first half of 2011, a reduction of over 76 million tons of coal. That is equal to 694,000 railcars of coal, which would span over 7,200 miles.
So despite the coverage of CSAPR and the court's ruling, power plant emissions continue to decline. The declines will likely continue as natural gas prices remain low and coal-fired power plants install controls or retire to comply with EPA's Mercury and Air Toxics Standards.
