Experts say emissions rule change unlikely to impact coal industry, Pennsylvania

October 10, 2017 Pittsburgh Tribune-Review
PEC in the News

Eliminating rules from the Obama administration to cut carbon dioxide emissions from power plants over the next decade is likely to have little short-term impact on the coal industry and not much environmental impact in Pennsylvania, experts said.

“Based on the economic changes and market forces, Pennsylvania is still on track to meet the goals of the Clean Power Plan,” said Davitt Woodwell, executive director of Pittsburgh-based Pennsylvania Environmental Council.

Under the Clean Power Plan, the state was required to cut its 2005 level of emissions by 30 percent by 2030 — something that should happened, mainly due to power companies switching from coal-fired plants to ones burning cheaper natural gas to create electricity.

U.S. Environmental Protection Agency Administrator Scott Pruitt on Tuesday signed a proposal to revoke the 2015 Clean Power Plan, claiming the EPA under Obama exceeded its statutory authority.

The Clean Power Plan set carbon dioxide emission guidelines for power plants that can be realistically achieved only if the plants change their energy source rather than better equipping the plants, the agency said. The Trump administration was concerned that the plan would force states to move from coal-fired to natural-gas power plants and embrace renewable energy sources like wind and solar.

Gov. Tom Wolf and the state Department of Environmental Protection, however, were disappointed with the Trump administration’s decision, said Neil Shader, DEP press secretary.

“It ignores science and the country’s global leadership to address climate change,” Shader said. “Pennsylvania has made real progress in reducing carbon emissions, and DEP will continue to work to find ways to reduce Pennsylvania’s carbon footprint while ensuring the state remains a net energy exporter.”

The Clean Power Plan was a “good start” for getting states to reduce carbon emissions, and it had the added bonus of letting the states determine how to cut them, Woodwell said. But a 30 percent reduction was only a start to keeping climate change from worsening, he added.

“That (goal) was not the end of the road. You’re just on the ramp,” Woodwell said, referring to stopping climate change.

Pollution from coal-fired power plants in Pennsylvania has declined in recent years as a result of power plant closures and conversions to natural gas.

FirstEnergy Corp. in 2013 shut down coal-fired plants in Union Township, Washington County, and another near Carmichaels, Greene County. The latter, the former Hatfield’s Ferry power plant along the Monongahela River, is being converted to a natural gas-fired plant.

No revival is expected for idled coal-fired power plants, said James Stevenson, director of global coal for IHS Markit, a Knoxville, Tenn., information and analysis firm.

“Many of the plants that would have been put at risk were those that are already at risk due to other regulations or low (natural) gas prices,” Stevenson said.

NRG Energy Services of Houston, runs three coal-fueled power plants in the region: the Homer City and Conemaugh plants, both in Indiana County, and the Keystone Power Plant in Armstrong County. While NRG supports the objectives of the Clean Power Plan to decarbonize the power system, “we have consistently noted that the methodology and the timeline could bear improving,” spokesman David Knox said.

The industry is trending toward more flexible, cost-effective generation, including natural gas plants that can turn on and off in minutes, not hours or days, Knox said.

“We did not set these targets because of the Clean Power Plan,” Knox said.

The Pennsylvania Coal Alliance, a Harrisburg-based trade group, praised the Trump administration’s decision.

“This far-reaching and costly rule will no longer threaten our state’s economy and the jobs of over 30,000 hard working men and women in Pennsylvania,” said Rachel Gleason, executive director.

Concurring with Pruitt, Gleason said the rule circumvented states’ rights by mandating energy policy disguised as regulations and was particularly discriminatory against Pennsylvania as one of the top producers of affordable, baseload generation. Of the 44.8 million tons of coal produced in Pennsylvania last year, 82 percent went to producing electricity. Production so far this year is up over 2016, Gleason said.

The coal industry, however, is likely to see little benefit in the short term from any repeal of the Clean Power Plan regulations because the demand for growth in the power market is slow, said Joseph Aldina, director of U.S. coal for PIRA Energy, a data analysis and research firm in New York.

“The natural gas and coal prices really dictate what the demand will be in the short term. The Clean Power Plan would not have had an impact for many years down the road,” Aldina said.

The rule could have impacted states like Pennsylvania, Texas and West Virginia, which rely on coal-fired power plants, Aldina said. But he anticipates some kind of federal policy will address the issue of carbon emissions — but not until the mid-2020s.

“(Pruitt) is likely to do something that has much lighter impact on the industry,” such as making the power plants more efficient, Aldina said.

“I think the coal industry is cheering the repeal of the Clean Power Plan. I think they are cheering it more on principle,” he said.

While some mines have opened, such as Corsa Coal Corp.’s Acosta Mine in Somerset County, it probably won’t spark an increase in mining, IHS’s Stevenson said. However, eliminating those regulations might help coal companies avoid a downtown in business, he said.

A spokesman for Corsa Coal of Canonsburg, which acquired PBS Coal and its Somerset County mines in 2014, could not be reached for comment.

Corsa Coal became a focal point of attention by the Trump administration this summer when it announced the opening of its Acosta Mine , which produces metallurgical coal that is burned to produce coking coal to make steel.

While candidate Trump last year touted how he would end what he called the government’s “war on coal,” United Mine Workers spokesman Phil Smith said that “nobody lost their job as a result of the Clean Power Plan ’cause it did not take effect.”

“It’s the future we’re worried about,” Smith said.

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