Energy Department Official Backs Air Act Exemption for Coal-Fired Plants

By Lynn Garner

James Markowsky, assistant energy secretary for fossil energy, told coal industry officials Dec. 4 that he supports their goal of exempting coal-fired power plants from new source review requirements that the industry believes is hindering companies from making efficiency improvements.

At a meeting of the National Coal Council, which is an advisory group to the energy secretary, Markowsky said the Clean Air Act's new source review requirements, which require permits for major upgrades to existing facilities, are keeping coal-based power plants from making efficiency gains that would increase electricity generation while reducing carbon emissions.

Markowsky was scheduled to meet later in the day with Environmental Protection Agency officials to discuss possible revisions to new source review regulations.

“We think there is an opportunity for carving out part of the fleet and having a relaxation so we can do the things we feel we can do with existing technology,” Markowsky said, referring primarily to plant efficiency improvements that could be implemented quickly.

Markowsky, a former engineer who worked for almost 30 years for American Electric Power, one of the nation's largest electric utilities, said later that he was not sure how EPA officials would receive his message.

Markowsky told reporters that there are a number of coal-fired power plants that are “good candidates” for implementing efficiency gains and that have a “high probability” of integrating carbon sequestration technologies in the years ahead, and these plants should be given some flexibility from EPA's new source review requirements.

NRDC Sees ‘Red Herring'

While Markowsky's remarks were well received by the council members, they were not well received within the environmental community.

John Walke, director of the clean air program for the Natural Resources Defense Council, told BNA that Markowsky is touting “a red herring.”

“NSR poses no barrier to the ability of power plants to improve efficiency while reducing conventional and global warming pollution,” Walke said.

“The coal and power industries use ‘efficiency improvements' as a more politically palatable code phrase for activities that increase smog, soot, and mercury pollution,” Walke said. “True energy efficiency improvements make plants cleaner, not dirtier.”

Walke described Markowsky's statements as a recycling of Bush administration efforts that resulted in “broken laws, excessively polluting power plants, and climate change failure.”

“If the Obama administration wants to build a clean energy economy, it should not scavenge from the Bush administration's policy scrap heap,” Walke said.

Markowsky said DOE is “working closely” with EPA regarding a rulemaking that will govern carbon dioxide injection procedures for underground storage. Markowsky also said coal ash should not be regulated as a hazardous substance.

Meeting Climate Change Goals

The National Coal Council adopted a report outlining how the nation can maintain coal-based electricity generation while meeting the national goal of reducing carbon dioxide emissions 80 percent by 2050.

Coal generation accounts for half the nation's electricity supply. The council was asked in May by Energy Secretary Steven Chu to conduct the study.

Robert Beck, the council's executive director, told BNA that the report “shows the pathway” for the next 40 years to achieving significant greenhouse gas reductions.

Beck described the report as “positive” and said it shows that the coal industry will work with the Obama administration to meet ambitious climate goals.

While the cost of reducing carbon emissions from coal-based electric generation may be as much as $1.2 trillion over the next four decades, the study shows that there is a tremendous payback in terms of creating 800,000 permanent jobs throughout the economy and increasing gross domestic product by $2.7 trillion, Beck said.

One of the biggest uses for captured carbon will be in enhanced oil recovery operations, the report said. It estimates that the nation's oil production can be increased by 2 million barrels per day from current levels.

DOE Awards Demonstration Grants

In a separate event, Chu announced Dec. 4 that Southern Company, American Electric Power, and Summit Texas Clean Energy LLC have been selected to receive a total of $979 million in federal funding to demonstrate carbon capture and storage at a commercial-scale level as part of the ongoing effort to reduce carbon emissions in the industrial sector.

The DOE funding is expected to generate $2.2 billion in private-sector capital for a total $3 billion investment, Chu said.

The three projects will focus on more efficient capture of carbon dioxide emissions, reducing the cost of electricity involved in the process, and finding beneficial uses for captured emissions.

American Electric Power is developing a carbon capture and storage project at its Mountaineer coal-fired power plant in West Virginia. The company will receive $334 million over 10 years from DOE out of the $979 million total.

Southern Company will retrofit a carbon dioxide capture plant on a 160-megawatt flue gas stream at an existing coal-fired power plant owned by Alabama Power, a subsidiary. DOE will provide $295 million.

Summit Texas Clean Energy plans to integrate carbon capture technologies at a 400-megawatt plant to be built near Midland, Texas, which will capture carbon dioxide and transport it for enhanced oil recovery operations in the Permian Basin oil fields.

The grants are the latest to be made in the third round of DOE's Clean Coal Power Initiative.

Two third-round carbon capture projects were announced July 1 for a total of $408 million. They include Basin Electric Power Cooperative at an existing power plant in North Dakota and Hydrogen Energy International LLC at a new facility in California.

The National Coal Council plans to make available its Dec. 4 study on how to achieve carbon emissions reduction goals through 2050 on its website at http://www.nationalcoalcouncil.org.

More information on DOE's latest round of grants for carbon capture and storage projects is available at http://www.energy.gov/news2009/8356.htm.

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