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EPA’s latest GHG rules highlight Administration’s unfinished business on energy policy

Now more than ever, America needs a true all-of-the-above energy strategy. A proposal announced by the U.S. Environmental Protection Agency (EPA) last week shows how much remains to be done.

On Friday, EPA issued re-proposed New Source Performance Standards (NSPS) for GHG emissions from new power plants. While we are pleased that the NSPS for new power plants sets separate standards for different fuel types – a power plant combusting coal is under a different standard from one using natural gas – it will harm U.S. energy diversity by essentially ending construction of new coal-fired power plants in the United States.

The problem is, even power plants using the most state-of-the-art technology in commercial use today – so-called “supercritical” plants – will be unable to meet EPA’s proposed GHG emission standard for coal combustion. EPA points to carbon capture and sequestration as the answer, but CCS is not widely available commercially, and the few new plants that are slated to use it are not yet operational with a proven technology.

ACC and many other trade groups pointed to the short-sightedness of EPA’s proposal. They include the Edison Electric Institute, which said in a statement:

[quote]EPA’s proposed NSPS rule for new sources and its pending proposal for existing sources likely will affect the price of electricity for all Americans and our industry’s ability to enhance the electric generation fleet and grid, underscoring the vital need to get both rules right … We cannot afford to take generation sources out of the mix, as fuel diversity guards against potential supply disruptions and is key to affordable and reliable electricity.[/quote]

And the National Mining Association said,

[quote]The regulation announced today by EPA effectively bans coal from America’s power portfolio, leaving new power plants equipped with even the most efficient and environmentally advanced technologies out in the cold.[/quote]

American manufacturers need diverse, efficient, affordable, and reliable energy in order to expand, innovate, and create jobs. As ACC President and CEO Cal Dooley said during a recent E&ETV interview:

[quote]I think clearly we have to have a comprehensive approach to ensure we have a regulatory environment that allows us to maximize the production of natural gas and other fossil-based fuels in the United States.[/quote]

As EPA develops its proposal for existing power plants, due by June 2014, ACC is eager to work with the Administration to explore how various approaches would affect the cost and reliability of energy and to identify ways to stretch supplies of natural gas so the chemistry industry can continue its unprecedented expansion in the U.S.

Meanwhile, ACC urges the President to develop a comprehensive energy policy that aggressively and responsibly develops oil and natural gas resources and related infrastructure; boosts energy efficiency; promotes the development of alternative energy; and ensures sound, balanced environmental regulations that enable the use of all energy sources, including coal, natural gas, oil, nuclear power, alternatives, and renewables.

Energy efficiency is one of the cornerstones of an all-of-the-above energy strategy. Smart, bipartisan energy efficiency proposals like the Energy Savings and Industrial Competitiveness Act (S.1392), sponsored by Sens. Jeanne Shaheen (D-NH) and Rob Portman (R-Ohio), are an important step. It can lead to increased use of many innovative products the chemistry industry makes that help American consumers, homeowners, businesses and manufacturers do more with less energy.

The chemistry industry is part of the solution. Use of chemistry in energy efficient products and technologies already saves Americans up to $85 billion in energy costs annually, and with greater adoption, the benefits can be even larger in the coming years.

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