Why EPAct 2005 May Invalidate EPA’s GHG Regulations

By November 19, 2013Energy

On Friday November 15 Congressmen Upton, Scalise, Whitfield and Barton sent a letter to EPA Administrator Gina McCarthy identifying a section of the Energy Policy Act of 2005 (EPAct 2005) that could invalidate EPA’s September GHG proposed regulation for new power plants. At issue is the agency’s identification of three U.S. projects participating in the Clean Coal Power Initiative (CCPI) to make the determination that CCS is an “adequately demonstrated” technology.

The CCPI is intended to help bring advanced coal technologies, like carbon capture and sequestration (CCS), to the point that they are commercially viable. The Department of Energy (DOE), the agency that administers CCPI, described the intention of the program in its 2009 Funding Announcement after passage of the American Recovery and Reinvestment Act of 2009:

“By overcoming technical risks associated with bringing advanced technology to the point of commercial readiness, the CCPI accelerates the development of new coal technologies for power and hydrogen production, contributes to proving the feasibility of integrating carbon dioxide (CO2) management and power production and facilitates the movement of technologies into the marketplace that are emerging from the core research and development activities.” U.S. Department of Energy, Financial Assistance Funding Opportunity Announcement, Clean Coal Power Initiative – Round 3 (June 9, 2009).

CCPI is starting to pay dividends as several U.S. projects are utilizing the program to help advance promising technologies, like CCS. Three projects of particular note include:

  • Southern Company’s Kemper County Energy Facility in Kemper County, Mississippi
  • Texas Clean Energy Project in Odessa, Texas
  • Hydrogen Energy California Project in western Kern County, California

These three projects could be the first utility scale power plant projects in the United States to deploy CCS. They also happen to be the three U.S. projects that EPA pointed to in their proposed GHG rule for new power plants to conclude that CCS is an adequately demonstrated technology – a necessary finding before it can require the use of the technology in these regulations.

Here is the hitch: EPAct 2005 contains explicit language stating that projects receiving assistance through CCPI cannot be the sole factor in determining that a technology is adequately demonstrated for the purposes of these particular regulations.

Some have argued that the EPAct language only bars the use of CCPI projects if they are the only basis for the adequately demonstrated determination. They point out that EPA relied on others factors like industry experience capturing CO2 and technical studies in proclaiming CCS commercially viable. While examples of similar albeit different industrial processes and technical studies have played a role in advancing CCS technologies for power plants to where they are today, the best and most logical basis for determining commercial readiness would be actual deployment the technology. In EPA’s GHG rule for new power plants, the agency relies on still-in-development projects that are participating in a DOE program specifically intended for technologies that are not yet commercially viable, and certainly not adequately demonstrated.

At some point simple logic has to win the day. In this case, neither logic nor law supports EPA’s determination that CCS has been adequately demonstrated. If this interpretation is correct, the September 20, 2013 proposed GHG regulation for new power plants, the first major component of the President’s Climate Action Plan, would be void.

It is time for the Administration to reevaluate the path it is pursuing under this regulatory regime. There is limited environmental benefit and considerable societal costs to the perpetual regulatory uncertainty caused by trying to expand the limits of regulatory authority.

Greg Bertelsen

Greg Bertelsen

Senior Director of Energy and Resources Policy at National Association of Manufacturers
Greg Bertelsen is the director of energy and resources policy at the National Association of Manufacturers (NAM). Mr. Bertelsen oversees the NAM’s environmental policy work and has expertise on issues ranging from air quality, climate change, energy efficiency, major EPA regulations and the rulemaking process.Mr. Bertelsen’ s background includes legal, policy and government relations experience on a range of key energy and environmental issues. Mr. Bertelsen received his JD from American University and his undergraduate degree from Dickinson College.
Greg Bertelsen

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