Last week I wrote about the Environmental Protection Agency’s (EPA) new proposed standard for carbon dioxide (CO₂) emissions from fossil fuel power plants. The long-awaited regulation would limit emissions to 1,000 pounds of CO₂per megawatt-hour (MWh) of electricity produced, essentially guaranteeing that no new coal power plants will be built in the U.S. without carbon capture and storage (CCS) technologies.

Almost 30 percent of U.S. greenhouse gas emissions come from coal power plants. Image source: epa.gov

In an effort to minimize opposition to the proposed standard, the EPA emphasized the limited negative impact on industry, as utility companies are already choosing to invest in natural gas rather than coal plants for new capacity. This is due mostly to abundant new reserves of relatively cheap shale gas extracted through hydraulic fracturing.

So just how accurate are the EPA’s claims that the proposed regulation is in line with industry business-as-usual? Other projections of future coal plant construction support the overall claim that the industry was already moving away from investing in new coal power.

The U.S. Energy Information Administration (EIA) projected there would be “virtually no new coal in [the] reference case [scenario] following several CCS demos.” The EIA reports that there are 9.3 gigawatts (GW) of new coal capacity currently planned by 2015, and none thereafter. Nearly all of this new capacity will be built within the next 12 months and will therefore be exempt from the proposed CO2 standards. Any plants scheduled to begin construction in more than a year will need to include CCS technologies in order to comply with the 1,000 pounds of CO₂ per MWh limit of the proposed EPA regulation. Power plant emissions can be averaged over a 30-year period to meet the regulations, so it is also possible for power producers to build coal plants in the near-term provided they install CCS systems in the future.

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The U.S. Environmental Protection Agency (EPA) proposed the country’s first federal standard regulating carbon dioxide (CO₂) emissions from power plants last week. The introduction of a carbon standard has been long-awaited by the environmental community, and many groups are applauding the proposed rule as an important first step by the U.S. government to tackle climate change.

EPA promotes the clean air and health benefits of carbon regulation on the agency homepage. Image source: epa.gov

The carbon emission standard – which limits emissions to 1,000 pounds of CO₂ per megawatt-hour (MWh) of electricity produced – will apply to future fossil fuel-fired power plants with an installed capacity greater than 25 megawatts (MW); plants that are currently operating or that will begin construction in the next 12 months are exempt.

The average natural gas plant in the U.S. emits between 800 and 850 pounds of CO₂ per MWh, safely within the proposed standard. The average coal plant, on the other hand, emits 1,768 pounds of CO₂ per MWh, which would exceed the standard. However, these existing plants will not be affected by the regulation, and EPA Administrator Lisa Jackson further emphasized that there are currently “no plans” to place standards on CO₂ emissions from existing plants, including future modifications that could increase their emissions. However it is likely that the EPA will regulate carbon emissions from existing power plants at some point down the road, and the proposed standard for new sources is a vital step to ensuring that this will occur.

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Photo: Coyote Springs Generating Station by Portland General Electric

On August 25, my colleagues at the Deutsche Bank Climate Change Advisors and I released a new greenhouse gas (GHG) life-cycle analysis of U.S. coal and natural gas-fired electricity. If you have been following my posts on ReVolt over the last year, you’ll know we began studying this issue after the Environmental Protection Agency (EPA) announced revisions to its methodology for estimating emissions from natural gas systems (basically from the production, processing, transmission, and distribution of natural gas) that resulted in a more than doubling of its estimate for methane emissions from those sources. Methane, in addition to being the primary component of natural gas, is a GHG some 25 times more potent than carbon dioxide over a hundred-year period. Consequently, some analysts have raised concerns that when the actual amount of methane emitted during the entire life cycle of natural gas (an amount which the EPA’s previous methodology apparently underestimated) is taken into account, natural gas might lose its GHG advantage over coal.

Over the past year, a number of new life-cycle analyses have come out that all ask different versions of the question, “How clean is natural gas really, on a life-cycle basis?” Some focus on GHG emissions from shale versus conventional natural gas, while others focus on all natural gas produced in the United States. The life-cycle analyses use different underlying assumptions, methodologies, and sources of data, and nearly all comment on the implications of their findings for the GHG comparison between coal and gas. After all, if the Obama administration is (or at least was) considering a clean energy standard that gave natural gas-fired electricity a half-credit on the basis of its GHG savings over coal, this should be reflected by actual GHG savings.

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Global production of biofuels increased 17 percent in 2010 to reach an all-time high of 105 billion liters, up from 90 billion liters in 2009. High oil prices, a global economic rebound, and new laws and mandates in Argentina, Brazil, Canada, China, and the United States, among other countries, are contributing to the surge in production, according to research conducted by the Worldwatch Institute’s Climate and Energy Program for the website Vital Signs Online.

The United States and Brazil remain the two largest producers of ethanol. In 2010, the United States generated 49 billion liters, or 57 percent of global output, and Brazil produced 28 billion liters, or 33 percent of the total. Corn is the primary feedstock for U.S. ethanol, and sugarcane is the dominant source of ethanol in Brazil.

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On July 28, the U.S. Environmental Protection Agency (EPA) proposed a package of regulations designed to reduce air pollution from the oil and natural gas industry. One of these regulations, a new source performance standard for volatile organic compounds (VOCs), will require drillers to use a technique called “green completions” on any oil or gas well that they hydraulically fracture. The EPA estimates that this new regulation, which is the United States’ first federal air standard addressing hydraulically fractured wells, will reduce such wells’ emissions of volatile organic compounds (VOCs) by 95 percent.

Green completions also have the co-benefit of capturing methane that would otherwise be vented or flared. Methane is the main constituent of natural gas and a greenhouse gas 25 times more potent than carbon dioxide. Recent estimates of methane emitted during the production, processing, and transport of natural gas have caused some to question the greenhouse gas benefits that could be achieved by switching from coal to gas-fired electricity.

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If you’ve been following U.S. power industry news for the last few years, you would be forgiven for believing that coal is about to surrender its long-term hold on the electricity sector. Utility after utility has announced plans to retire hundreds and even thousands of megawatts of coal-fired capacity, and to pull the plug on coal plants under development. In the absence of Congressional action, some analysts have even questioned whether just the threat of tighter EPA regulations could be enough to encourage utilities to shut down substantial amounts of coal generation.

But the U.S. Energy Information Administration (EIA), in its 2011 Annual Energy Outlook released this week, is less sanguine about coal’s imminent demise. Although proposed EPA regulations on air emissions, coal ash, and water intake could make a major dent in coal’s market share, the report says, they won’t be enough to end coal’s reign as the largest source of electricity—at least not without a price on carbon dioxide.

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In recent months, several sources have called natural gas’s greenhouse gas (GHG) emissions reductions potential over coal into question. Because the GHG benefit of a coal-to-natural gas shift in the power sector is a critical assumption in our common conclusion that natural gas can facilitate a reduction in power sector GHG emissions, the Worldwatch Institute and Deutsche Bank Climate Change Advisors are embarking on a joint study to assess the currently available emissions data, develop a rigorous and transparent life cycle assessment of electricity generated from gas and coal, and identify data gaps that must be prioritized in further research.

Why is it commonly held that electricity generated from natural gas is 50-60 percent cleaner than coal, and why is this belief being challenged?

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The tide may be turning against mountaintop removal coal mining in the United States, as last month marked the first time that the U.S. Environmental Protection Agency (EPA) recommended that a permit for a surface coal mine be repealed. An EPA review of Arch Coal’s proposed Spruce 1 project in West Virginia stated that the project could not be carried forward without adverse impacts to the surrounding Appalachian environment.

Mountaintop Removal Mining

Mountaintop removal is a type of surface mining that removes mountaintops by use of explosives to expose coal ridges. The debris from the blasting typically is dumped into nearby valleys, creating unsightly and ecologically damaging “valley fills.” The adverse environmental effects of mountaintop removal and valley fills include contamination of the soil and local water supply, the burying of streams with coal sludge, and deforestation.

In the United States, mountaintop removal operations are concentrated in the states of Kentucky, West Virginia, Virginia, and Tennessee. So far, some 500 mountains surrounding about 1.2 million acres of forest in central and southern Appalachia have been demolished. An estimated 2,500 tons of explosives are used daily.

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Senator Lisa Murkowski (R-AK) at a news conference on June 8, image courtesy of J. Scott Applewhite/Associated Press

In a 47 to 53 vote Thursday, the U.S. Senate blocked an effort by Senator Lisa Murkowski (R-AK) to nullify the Supreme Court’s finding that allows the Environmental Protection Agency (EPA) to regulate greenhouse gas emissions. If it had passed, the resolution would have blocked the EPA from enacting standards for emissions from automobile tailpipes that were released earlier this year. The bill also would have prevented EPA administrator Lisa Jackson from moving forward with proposed rules for regulating large stationary emitters such as coal-fired power plants and oil refineries.

Some climate legislation proponents within the Senate remain doubtful that a comprehensive climate bill can be passed this year, despite this legislative victory. Senator Dianne Feinstein of California cited the unlikelihood of passing such major, controversial legislation so close to midterm elections in November. Others point to the difficulty in getting the 60 votes needed to pass a climate bill considering that the Murkowski bill opposing federal regulation of emissions gained the support of 47 Senators.

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Photo courtesy of Jonathan Ernst/Reuters

As a former Minister of the Environment turned Chancellor, Angela Merkel had already proven those wrong who surmised that environment positions are a dead end to high-rising political aspirations; now she became only the second German politician (after Konrad Adenauer, the first head of a German government after the Second World War, in 1957) who received the honor to address the U.S. Congress; and as a widely respected leader on environmental issues who is, at the same time, the leader of a conservative party, she would be well positioned to appeal to cautious Republicans when talking about climate change and energy reformation—at least I had hoped so in a recent interview with Reuters.

Angela Merkel in her speech on Capitol Hill yesterday, just weeks after her reelection for a second term (this time as a leader of a center-right coalition) was moved by the honor and the standing ovations she received from U.S. lawmakers even before she had started her speech. Following up on her promises, she spent a good portion of her talk on climate change, urging Congress and the Obama administration to take bold steps to address the issue, in her view one of the “great tests” of the 21st century. “We all know we have no time to lose,” she said.

But her remarks did not resonate with most Republicans. While Merkel’s remarks were met with passionate applause from Democrats, almost the entire Republican side—including key swing voters, such as Independent Senator Dick Lugar from Indiana and Republican Senator Olympia Snowe from Maine—remained silent. When the Chancellor pointed out that reducing greenhouse gas emissions would spur economic and jobs growth worldwide, the same partisan gulf occurred.

Already earlier in the day, Republicans had refused to attend the Senate Environment and Public Works Committee’s markup of Senators John Kerry’s (D-Mass.) and Barbara Boxer’s (D-Calif.) important climate bill (Clean Energy Jobs and American Power Act). The only one out of seven Republican Senators on the committee who showed up for the meeting was Sen. George V. Voinovich (Ohio) who briefly expressed the Republican opposition to the committee’s proceedings. In their view, the Environmental Protection Agency has not done enough economic analysis of the Kerry-Boxer bill. Democrats, however, accuse their opponents of pure gamesmanship pointing out that the Kerry-Boxer bill is modeled after the American Clean Energy and Security Act of 2009, which passed the House side of Congress earlier this year and underwent intense economic scrutiny, including from the EPA.

Angela Merkel can tell a great success story about green jobs creation in Germany. The country—home to Audi, BMW, Mercedes, Opel, and Volkswagen—is on track to have more people employed in the environmental technology sector than in the automobile industry as early as 2015. It has reduced its greenhouse gas emissions by more than 20% since the beginning of the 1990s. But it seemed yesterday as if only half of the U.S. representatives were ready for Merkel’s optimism—one that has often been echoed by President Obama in the past.  Regarding the Copenhagen UN climate summit, Merkel said: “I’m convinced, once we in Europe and America show ourselves ready to adopt binding agreements, we will also be able to persuade China and India to join in ….No doubt about it, in December, the world will look to us, to the Europeans and to the Americans. ” Thus far, only half of America looks back.