Coal Country: EPA Plan Is Short Term Boost, No Solution For Industry Decline

Aug 27, 2018
Originally published on August 27, 2018 11:36 am

The Trump's administration's proposal to relax regulations on carbon emissions is welcome news in coal producing states like Wyoming, even as people in the industry acknowledge its impact would be limited.

"Coal fired power plants are a necessity to keep the... electricity grid stable in America," says Tom Stalcup, plant manager at the Dry Fork Station coal-fired power plant in Gillette. Large open-pit mines dot the plant's perimeter, and the light-blue building rumbles as electricity flows to states across the West.

Like many here — where the coal industry produces nearly a quarter of the state's income — Stalcup worried the Obama-era Clean Power Plan would have forced plants to close. It set targets for states to reduce carbon emissions, and aimed to remake the power grid with a large-scale shift away from coal to renewable power like wind and solar. Two dozen states, including Wyoming, challenged the Clean Power Plan as exceeding the Environmental Protection Agency's authority, and a court held up the rule before it could take effect.

The Trump administration's new proposal, called the Affordable Clean Energy rule, would give states more power to regulate carbon emissions. It doesn't set any cap for emissions, but simply suggests ways that individual plants could become more efficient. In Wyoming, that's providing new hope that some coal plants might stay open longer.

"It'll keep some of the plants on," manager Stalcup says. "I don't know as if it will keep all of them on."

One technical tweak that could make a difference is a change in what's called New Source Review. It was meant to make sure that as coal plants expand or retrofit, they also install the latest, most effective pollution controls. But that can cost hundreds of millions of dollars.

The Trump administration wants to relax this, allowing plants to make minor emissions control changes without having to do a full, bank-breaking environmental upgrade.

"It maybe creates a little bit more of an incentive to invest in some coal-fired power plants, to keep them open a little longer than they might have been otherwise," says Rob Godby, of the University of Wyoming Center for Energy Economics and Public Policy.

Environmental groups point out this would be bad for public health, as it would increase air pollution from coal plants. In fact, those plants most likely to benefit from the change are some of the country's oldest, and dirtiest. The E.P.A.'s own projection finds that its new proposal would mean up to 1,400 more premature deaths every year, 48,000 new cases of "exacerbated asthma," and at least 21,000 more missed days of school.

The economic reality of coal's decline

But energy analyst Godby says it would only make sense to extend the life of "a very small number" of plants, because coal's real problem is economic.

"Coal fired power plants have to compete directly with [cheaper] natural gas plants and renewables, where they're already losing," he says. "This plan really isn't going to affect that."

Over the past decade, coal's share of the country's energy mix has dropped from just over half to about a third. According to S & P Global Market Intelligence, utilities plan to close about three dozen more coal units by 2020, and many say they don't expect that to change despite the new proposal.

Cloud Peak Energy, the country's third largest coal producer, welcomes the regulatory rollback. But Rick Curtsinger, director of public affairs, says more could still be done to protect the coal industry. He says the company would even like to see Congress step in, with legislation "that gives long-term certainty to utilities to make the 20 and 30 year investments necessary."

It's not clear what, exactly, that would mean. But the Trump administration has repeatedly raised the idea of subsidizing struggling coal and nuclear plants.

The administration's Affordable Clean Energy proposal is open for public comment. If it takes effect, environmental groups and some states are threatening a legal challenge.

Gillette Mayor Louise Carter-King says the plan would really be just a short-term boost. What's more, she says, regulation of carbon emissions could be stepped up again after the next presidential election.

"It's that uncertainty that's tough on people and the industry," she says.

Utilities are also mindful of that uncertainty, another reason President Trump's latest lifeline to the coal industry may not change much.

Copyright 2018 Wyoming Public Radio. To see more, visit Wyoming Public Radio.

DAVID GREENE, HOST:

The Trump administration's rollback of coal plant regulations last week has renewed hopes for those in the industry that some plants might stay open a little longer. The share of coal in the country's energy mix has dropped dramatically over the past decade. Even in the state that produces the most coal, there is concern that this latest lifeline is not going to be enough to turn this around. From Wyoming Public Radio, Cooper McKim reports.

UNIDENTIFIED PERSON: (Unintelligible).

COOPER MCKIM, BYLINE: In Gillette, Wyo., on a bright, cloudless day, huge open-pit mines dot the perimeter of a coal-fired power plant, the Dry Fork Station. Inside, turbines are producing electricity from pulverized coal mined a mile south. It's feeding electricity to the entire Western grid right now.

TOM STALCUP: California, Washington, Oregon, New Mexico west to the ocean.

MCKIM: That's Tom Stalcup, the plant manager here. He says the sun can stop shining, wind blowing. But coal, he says, is reliable.

STALCUP: Coal-fired power plants are a necessity to keep the system stable - the electricity grid stable in America.

MCKIM: Stalcup believes the Obama-era Clean Power Plan could have put that at risk. It aimed to cut carbon emissions by shifting away from coal to renewables. That would've been a big blow to Wyoming where the coal industry produces nearly a quarter of the state's income.

STALCUP: We're hoping, you know, this new plan under the Trump administration will relax that a little bit.

MCKIM: The new proposal, called the Affordable Clean Energy Rule, would give states more power to regulate carbon emissions. It doesn't set any cap for reducing them. It simply suggests how individual plants could become more efficient.

STALCUP: You know, it'll keep some of the plants on. I don't know if it'll keep all of them on. But, yeah, I think it'll have an impact on which plants close and which plants stay running.

MCKIM: University of Wyoming economist Rob Godby is not so sure. He says the real problem for coal is economic. It's just too expensive compared to other forms of energy.

ROB GODBY: Coal-fired power plants have to compete directly with natural gas plants and renewables where they're already losing, and this plan really isn't going to affect that.

MCKIM: Godby says, sure, it's possible some plants could stay open longer. The proposal would allow coal plants to make minor emissions control changes without having to do a full bank-breaking environmental upgrade.

GODBY: It maybe creates a little bit more of an incentive to invest in some coal-fired power plants to keep them open a little longer than they might have been otherwise, but that is a very small number.

MCKIM: According to S&P Global Market Intelligence, utilities plan to close about three dozen coal units by 2020. And many say they don't expect that to change despite the new proposal. Cloud Peak Energy, the country's third largest coal producer, welcomes the rollback. But spokesman Rick Curtsinger says more could still be done to protect coal. He says the company would even like to see Congress step in.

RICK CURTSINGER: And develop comprehensive and cohesive energy legislation that gives long-term certainty to utilities to make the 20 and 30-year investments necessary for lasting affordable and reliable electricity.

MCKIM: Back at the Dry Fork Station, Gillette Mayor Louise Carter-King says the administration's Affordable Clean Energy Rule is really just a short-term boost, plus everything could change again after the next presidential election.

LOUISE CARTER-KING: You know, there's always that thought. You just don't know what the next administration will do. That uncertainty is tough on people and the industry.

MCKIM: Utilities are mindful of that, too, which is another reason why the Trump administration's latest effort to help coal may not change much. For NPR News, I'm Cooper McKim.

(SOUNDBITE OF TRACE BUNDY'S "LITURGY") Transcript provided by NPR, Copyright NPR.