Presenting Carbon Pulse’s semi-regular CPP Roundup: a brief summary of this week’s happenings concerning the US’ proposed Clean Power Plan.
The CPP, supported by President Obama and most Democrat lawmakers, is a key component to the country’s strategy to meet its UN pledge to cut GHG emissions by 26-28% below 2005 levels by 2025.
The plan’s proposed rules face fierce opposition from many companies in the US power sector, as well as most Republicans at state and federal levels.
While the current blueprint for the plan is still in draft form, the EPA is due to release finalised rules this August.
CONGRESS PASSES ANTI-CPP BILL, BUT OBAMA SAYS IT’S DOA
– US House of Representatives on Wednesday voted 247-180 to pass bill designed to prevent EPA from implementing CPP.
– Bill sponsored by Republican Ed Whitfield would put CPP on hold until all legal challenges against it are decided, and let states decide individually whether or not to comply with it.
– President Obama said he would veto it, calling it “premature and unnecessary”.
INDIANA WON’T PLAY NICE
– Indiana will not comply with Clean Power Plan (CPP) unless significant changes are made before August, the state’s Republican governor Mike Pence wrote in letter to President Obama.
– Pence called proposed CPP rules “ill-conceived and poorly constructed,” and said they are an overreach of federal authority.
– He said “higher electricity prices brought by the EPA’s plan will inhibit our ability to advance our manufacturing base and the jobs it creates.” (EIA estimates power bills will rise around 4%)
– Under EPA’s draft proposal, Indiana power sector needs to cut its GHGs by 20% below 2005 levels by 2030, a more lenient target than -30% national goal.
– Ironically, already-planned coal plant closures have put state firmly on a path the reaching the goal.
– Other states including Texas and Kentucky have suggested they may not comply, but Oklahoma is the only one so far to say outright that it won’t.
SCOTUS OBAMACARE RULING COULD HELP CPP DEFENDERS
– Environmental attorneys are studying whether this week’s Supreme Court 6-3 ruling upholding Obama’s health care reforms could set a precedent in legal challenges to the CPP, some US media outlets are reporting.
– Arguments made by Obamacare opponents are similar to those being used in early challenges to the CPP, but the legal logic used by the court this week could also be wielded by the EPA.
– According to POLITICO: “Both cases ask how executive branch agencies should proceed when implementing laws whose language is unclear … and whether agencies should receive deference to interpret the law.”
– POLITICO adds that a 1984 court decision “sets a precedent for giving deference to executive branch agencies in interpreting ambiguous laws and its implications are littered all over court cases involving government rules”, and therefore could apply to legal challenges to the CPP.
– Click here to read Greenwire’s story on this
US NATGAS INFRASTRUCTURE HANDLE CPP DEMAND”
– Study by the Advanced Energy Economy Institute found existing and planned natural gas infrastructure will be able to cope with increased demand, easing concerns that heavier reliance on natgas would create stress on pipeline capacity and ultimately impact grid reliability.
– Study predicted temporary increase in natgas demand due to the shift away from coal, but this would decline as new renewable energy and energy efficiency measures come online.
– US natgas demand has increased dramatically over past decade in response to low prices stemming from shale revolution, and largely been met with corresponding expansion in pipeline infrastructure.
– Report can be downloaded here.
BUT US COAL SECTOR TO SUFFER
– US coal production could plunge to levels not seen since 1970s under proposed CPP rules, said an EIA report published earlier this month.
– Western US coal production could drop by 34%/214mt by 2024 compared to BAU scenario, with bulk of losses in Wyoming and Montana.
– “Interior” production around Illinois and the Gulf Coast states could fall by 45%/103mt over same period.
– Appalachian production, already in decline due to competition, could decrease by 19%/46mt.
– US coal sector suffering even in absence of CPP, as competition from overseas, rising coal prices, cheaper natural gas and waning demand weigh.
– Production is seen eventually rebounding as overall US electricity demand rises over time and as natural gas prices rise.
– US coal plants currently account for one third of national electricity generation, down from more than half in 2000.