Recent Climate Proposal: Make or Break for CCS

On June 2^nd the Obama administration announced its plan to regulate power plant carbon dioxide emissions. The draft proposal would require existing power plants to cut carbon dioxide emissions 30%, of the levels in 2005, by the year 2030. The EPA proposal will not be finalized until mid-2015, but the implications of such a draft are significant. Unlike past attempts, this regulation has a higher percentage of becoming a reality. The president will use his authority under the 1970 Clean Air Act to enact the regulation. This is the most significant action any United States president has taken to combat global climate change.

The regulation is mainly targeted at the coal industry. It will benefit the renewable energy sector of the market by placing increased operational costs on coal. Power plant operators will be required to pay the upfront cost required to upgrade their facilities to comply with the proposed regulations. What is seemingly a death blow to the struggling coal industry, will likely provide the economic incentive for increased funding and development for wide spread use of carbon capture and storage systems.

Proposed emission standards relative to current Carbon Dioxide emissions
Image credit: Statista

Power plant operators will need to adopt technologies which can increase operational efficiency and curb increasing levels of carbon dioxide in the atmosphere. Carbon Capture and Storage systems can fulfill the latter half of this requirement. Carbon Capture Systems have failed to generate serious momentum because of a lack of funding and economic incentive. Power plant operators have resisted using the technology, as it can decrease overall plant efficiency by as much 7-12 percent (Miller & Smith 2012). Their indifference to the technology is liable to change. The regulation has led to an increase in the perceived social cost of carbon. 

There is now a renewed importance to limit carbon dioxide emission, even at the expense of operating costs. The technology to reduce carbon dioxide emissions is already in existence. It is a matter of providing the proper incentives for wide spread use of such technologies. According to the EPA greenhouse gas emissions report in 2012 were 10% below emissions in 2005. It is clear that this regulation is a feasible benchmark to be reached. It would be prudent for power plant operators to continue development of CCS technology in the expectation of future, more stringent, regulations. The 15 year time frame could serve as the necessary proving ground for CCS, to either validate or invalidate the feasibility of the technology.

The proposed regulation is a considerable landmark, and a step in the right direction in achieving the United States environmental agenda. It will likely be the foundation for further attempts, to address the global issue of climate change. It remains to be seen what role the coal industry will play in the near future. In order for the coal industry to retain its position as the largest player in the energy market, it must adapt. The regulation has forced the hands of power plant operators to develop and implement technology to decrease carbon emissions. The precipitating events of the legislation will lead to a favorable environment for Carbon Capture and Storage systems. 

What do you guys think of the proposed regulation? I would be interested to hear what you think the implications for the coal industry will be. My next post will further explore the feasibility of CCS by looking at the researchers responsible for its rise to prominence. If you guys have any suggestions or feedback please comment below.

References

Davenport, C. (2014, June 1). Obama to Take Action to Slash Coal Pollution. The New York Times. Retrieved June 22, 2014, from http://www.nytimes.com/2014/06/02/us/politics/epa-to-seek-30-percent-cut-in-carbon-emissions.html?_r=0

Miller, J., & Smith, R. (2014, January 7). The Future of Coal: Despite Gas Boom, Coal Isn't Dead. The Wall Street Journal. Retrieved May 28, 2014, from http://online.wsj.com/news/articles/SB10001424052702303332904579228160256043626