Green on the Hill: Greenhouse Gas, NEMA Standards Pushed and Pulled

GHG Utility Regulation’s Effect on Manufacturers Uncertain

The EPA has proposed a rule that would set an emissions standard on carbon dioxide (CO2) for new electric plants. If finalized, the standard—another of the EPA’s greenhouse gas regulatory rulemakings—would affect only electric utilities, and then only those built in the future that do not meet an emission rate of 1,000 lbs. of CO2/megawatt-hour (MWh) of electricity generated on a gross basis. The proposed rule is part of the Obama administration’s efforts to improve air quality—and reduce public health hazards—by forcing some businesses, that might not do so on their own, to consider cleaner-burning or renewable fuels as industrial inputs.

Some manufacturing trade groups, such as the National Association of Manufacturers (NAM) and the U.S. Chamber of Commerce, oppose the EPA ruling because they say that electricity costs for manufacturers will go up if coal-burning power plants have to purchase and deploy emissions control equipment.

In combined comments to the agency, NAM and the Chamber pressed the EPA to withdraw the proposal because of what they maintain “… the impact these regulations will have on energy prices and reliability, as well as the potential precedent-setting nature of the approach on manufacturing sectors in the future.”

There is speculation that in the future, the EPA may apply this 1,000-lbs.-CO2/MWh standard to boiler units in manufacturing facilities.

Previously the EPA had proposed what are called maximum achievable control technology (MACT) standards for industrial boiler emissions of hazardous air pollutants (HAPs), a category which includes toxics such as benzene, but not CO2. Those standards for “major” and “area” sources have been delayed. The EPA’s proposed CO2/utility standards come under a different regulatory program: new source performance standards (NSPS).

The EPA argues that the utility industry will be able to build new, clean coal-fired or petroleum plants, though the costs may be a bit higher initially than they will be for natural gas-fueled generating plants. In addition, the agency argues the CO2 standard is consistent with the president’s goal that “by 2035 we will generate 80 percent of our electricity from a diverse set of clean energy sources—including renewable energy sources like wind, solar, biomass, and hydropower; nuclear power; efficient natural gas; and clean coal.”

While some new coal plants are on the drawing board, the Department of Energy’s annual outlook predicts that natural gas-fired power plants, renewable energy, and nuclear power are the forms of energy generation that are most likely to be built to meet new electricity demand over the coming years. The coal-fired plants that are on blueprints would have to use carbon capture and storage (CCS) technology to meet the new 1,000-lbs.-CO2/MWh standard, according to the EPA.

But the agency notes that regulatory uncertainty may be hindering the development and deployment of CCS, as evidenced by American Electric Power’s recent deferral of a large-scale CCS retrofit demonstration project on one of its coal-fired power plants because the state’s utility regulators would not approve CCS without a regulatory requirement to reduce CO2. The standard established in this proposal would help create the regulatory certainty that CCS is the path forward for new coal-fired generation.

The opposition manufacturing groups argue the EPA has acted “arbitrarily, capriciously, and unlawfully” by favoring (in a de facto way) natural gas over coal and petroleum.

But EPA Delays Application of Another GHG Rule

The EPA is also showing restraint with regard to some GHG regulatory proceedings. The agency announced that it would not reduce the size of companies required to obtain one of two kinds of permits when they either build a new plant or modify an existing one so that the total emissions of air pollutants (that is, GHGs and other toxins) exceed a certain level. The EPA previously had set applicability thresholds at total emissions above 100,000/75,000 tons per year. Those levels were established in the “tailoring rule” the agency published in December 2010.

At that time, it said it would reduce those triggers in July 2012. But when July 2012 came around, the EPA reversed itself, saying it would not lower the triggers because the states would not have the resources to handle the flood of permits they would receive. The two EPA permitting programs involved here are the Prevention of Significant Deterioration and Title V.

Motors for Industrial HVAC, Cooling Towers to Get New Efficiency Standard

It is not often that manufacturers of energy efficiency equipment and environmentalists agree on a regulatory path forward, but that is the case with regard to the Department of Energy’s (DOE) rulemaking on industrial motors. This has to do with so-called specialty industrial motors, which might be connected directly to gear housing, or operated vertically.

These motors are used widely, especially in HVAC, cooling towers, and water and wastewater treatment. It is not unusual for these motors to be imported, and for them to be both cheaper and less energy-efficient than competitors produced by U.S. manufacturers. The National Electrical Manufacturers Association (NEMA), American Council for an Energy-Efficient Economy (ACEEE), Appliance Standards Awareness Project, and some other groups are pressing the DOE to adopt NEMA Premium™ efficiency levels for this class of industrial motors.

Currently U.S. manufacturers of special-purpose industrial motors probably already meet NEMA standards, according to R. Neal Elliott, associate director for research for the ACEEE. He contends that many foreign manufacturers do not meet those standards. Those motors would be eliminated from the U.S. market unless they were upgraded.