Transcript Clean Air Act Section 111(d) Indiana Energy Association September 11, 2014 Thomas W.

Clean Air Act Section 111(d)
Indiana Energy Association
September 11, 2014
Thomas W. Easterly, P.E., BCEE Commissioner
IN Department of Environmental Management
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President’s Climate Directives
• U.S. EPA directed to issue proposed carbon
pollution restrictions for:
– New power plants by September 20, 2013, 111(b).
– Existing power plants by June 1, 2014, and finalize those
restrictions by June 1, 2015, 111(d).
• States will be required to submit state plans
under Section 111(d) of the Clean Air Act by
June 30, 2016.
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New Source Proposal—111(b)
• In September, 2013, U.S. EPA proposed
New Source Performance Standards
(NSPS) for Greenhouse Gas (GHG)
Emissions for certain Electric Utility
Generating Units (EGUs)—111(b).
- Combined cycle gas turbines will meet the rule.
- Coal fired units will not meet the rule without
using carbon capture and storage.
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New Source Proposal—111(b)
• Carbon Capture and Storage (CCS):
− is not yet commercially available,
− has not yet been demonstrated at
commercial scale, and
− is likely to be prohibitively expensive.
• Due to the increased energy used for CCS,
the net greenhouse gas emissions per unit of
useful energy produced from a coal fired plant
using this technology and meeting the lower
emission limits will likely be no lower than
emissions from a modern plant without CCS.
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Existing Source Proposal—111(d)
• In accordance with the President’s Climate
Directive, on June 2, 2014, (June 1 was a Sunday)
U.S. EPA Administrator McCarthy signed a
proposed rule to reduce emissions from existing
fossil fueled Electrical Generating Units (EGUs)
starting in 2020.
• The proposed rule was actually published on June
18, 2014, at 79 FR 34829-34958. Comments are
due by October 16, 2014.
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Existing Source Proposal—111(d)
Each State has an individual carbon intensity goal
developed from four “Building Blocks”:
1. Increase the thermal efficiency at coal fueled
EGUs by 6%.
2. Increase utilization of natural gas combined cycle
plants to 70%.
3. Increase zero carbon renewable generation.
4. Increase energy efficiency (load reduction).
Choice of rate based or mass based regulations.
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Existing Source Proposal—111(d)
The proposed goal for Indiana is to reduce our net
emissions from the 2012 level of 1,924 lb
CO2/MWh to 1,607 lb CO2/MWh for the period
2020 to 2029 and 1,531 lb CO2/MWh after 2029.
Goal is based upon:
1. Increase coal EGU efficiency by 6%.
2. Increase NGCC utilization from 53% to 70%.
3. Increase renewable energy generation to 7%.
4. Reduce energy demand by 3.2% by 2020 and
11.11% by 2030 through energy efficiency.
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Existing Source Proposal—111(d)
U.S. EPA estimates on a national level that:
• Coal production will decrease 25 to 27%, and the
price of coal will decrease by 16 to 18% by 2020.
• Natural gas production will increase by 12 to 14%
with a price increase of 9 to 12% by 2020.
• Renewable generation capacity will increase by 12
GW, NGCC capacity will increase by 20 to 22 GW.
• Coal generation capacity will decrease by 46-49
GW, and oil generation capacity by 16 GW.
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Existing Source Proposal—111(d)
• Annual incremental compliance costs of $5.5 to
$7.5 billion in 2020 and $7.3 to $8.8 billion in 2030.
• Job increases of 25,900 to 28,000 in the electricity,
coal and natural gas sectors by 2020.
• Job increases of 78,000 for demand-side energy
efficiency by 2020.
IDEM is currently evaluating both the feasibility and
estimated cost of meeting U.S. EPA’s goals.
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Indiana Carbon Dioxide Emission Rates
(pounds of CO2 per Megawatt Hour)
2012 Baseline U.S. EPA 2030 Indiana 2030 Estimate
Goal
1,924
1,531
1,615 to 1,683
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Impacts on Indiana
• This regulation will increase the costs of
energy in the United States—both natural
gas and electricity prices expected to rise
by 10%--the impact on Hoosiers may be
greater due to our current reliance on coal.
• The number of Hoosiers who lose utility
services for non-payment is likely to
increase.
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Impacts on Indiana
• This increased cost of energy will likely
reduce the international competitiveness
of Hoosier businesses resulting in a shift
of emissions from Indiana to other
countries.
• The worldwide greenhouse gas emissions
may actually increase when manufacturing
moves from Indiana (and the rest of the
United States) to other countries.
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Climate Impacts—111(d) Proposal
This rule will have virtually no impact on
modeled global climate change. It is
projected to reduce:
• Global CO2 concentrations by 1.5 ppm by
2050. This represents 0.3% of the expected
projected global average CO2 concentrations
in 2050.
• Sea level increases by 0.01 inch.
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Climate Impacts—111(d) Proposal
The proposed rule is also projected to reduce:
• Global average temperatures by 0.016o F
(0.009o C) based upon U.S. EPA’s climate
models.
– This projected temperature reduction is based
upon the projected 1.5 ppm reduction in global
CO2 concentrations.
– Since 1998, global average CO2 concentrations
have increased by 33 ppm or 9%, but global
average temperatures have not increased.
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7000
United States Carbon Dioxide Emissions
(Millions of Metric Tons)
6000
5000
111(d) Reductions
Other Sources
Electricity
4000
3000
2000
1000
0
1990
2005
2012
2020
2025
2030
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State Goals as % Reduction from 2012
Source: Bloomberg New Energy
Finance
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Percentage Change in CO2 Emissions from Utilities
(2005 – 2012)
Decreasing >15%
Decreasing 0 – 15%
Increasing
No Data
Location of the State Capitals
State Boundaries
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Indiana’s Response to the
111(d) Proposal
• The proposed regulation is not consistent
with our goal of affordable reliable energy.
• Governor Pence has issued numerous
statements opposing U.S. EPA’s proposal.
– June 2, 2014
– July 3, 2014
– July 10, 2014
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Indiana’s Response to the
111(d) Proposal
• Governor Pence has joined with Governor’s
from other States in submitting written
comments to the President opposing U.S.
EPA’s proposal:
– June 16, 2014
– September 9, 2014
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Indiana’s Response to the
111(d) Proposal
• IDEM Commissioner Easterly has testified
asking that U.S. EPA’s proposal be
withdrawn:
– July 30, 2014—U.S. EPA Public Hearing
– September 9, 2014—House Committee on
Energy and Commerce, Subcommittee on
Energy and Power hearing.
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Indiana’s Response to the
111(d) Proposal
• Indiana joined with 11 other States on
August 1, 2014 to petition the D.C. Circuit
concerning U.S. EPA’s inability to regulate a
source under 111(d) of the Clean Air Act
when that source is already regulated under
112.
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Indiana’s Response to the
111(d) Proposal
• On August 25, Indiana joined other States in
a request that U.S. EPA withdraw the
proposed regulations under 111(d) and
111(b) because the U.S. EPA’s failure to
include in the dockets key materials that the
agency relied upon as support is a violation
of Section 307(d) of the Clean Air Act.
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Indiana’s Response to the
111(d) Proposal
• Indiana is pursuing other options in case the
legal and policy challenges do not succeed.
– IDEM is preparing possible options for a State
plan to meet the proposed regulations.
– IDEM and the IURC are working with other
MISO states as the Midcontinent States Energy
and Environmental Regulators (MSEER) to
evaluate possible regional plans.
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Midcontinent States Environmental and Energy Regulators
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Indiana’s Response to the
111(d) Proposal
• Indiana will submit written comments on all
aspects of the proposed rulemaking. These
comments will represent all agencies
including: IDEM, IURC, OUCC, IDNR as well
as input received from stakeholders.
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Questions?
Tom Easterly
Commissioner
Indiana Department of Environmental Management
(317) 232-8611
[email protected]
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