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Do Coal Plants Collect Social Security?

January 10, 2011

That apparently silly question was posed by investment advisors at Deutsche Bank Climate Change Advisors in a report on Natural Gas and Renewable Energy. What was their point?

Coal-fired power plants that are more than 60 years old account for 60 gigawatts (“GW”) of electric generating capacity in the United States. Plants that are 45 years old or older account for 92 GW of capacity. Almost half of the electricity generated by burning coal comes from plants that were built before the Clean Air Act was passed.

Coal-fired power plants account for almost half the electrc generating cpacity in the United States. If you do the math, that means coal plants over 60 provide 13% of our electric generating capacity. If these plants were human, they would soon be collecting Social Security and Medicare. Plants built before the Clean Air Act account for 20% of our total generating capacity. Because electric grids are required to use the cheapest electricity first, probably more than 20% of the electricity we use is from these old plants. In the middle of the night when electric demand is low, and wind turbines are turning, it is mostly coal that is providing our electricity.

Among these doddering old coal plants, there are, no doubt, some old acquaintances of mine. In the late 1970’s and early 1980’s I was Chief of the Environmental Protection Bureau of the New York Attorney General. Soon after President Ronald Reagan took office, the Environmental Protection Agency revised the permits of Midwestern coal-fired power plants to allow them to emit 10 times the pollution previously allowed. These plants had very tall stacks that sent their pollution to New York and New England causing acid rain in the Adirondacks, Green Mountains and the White Mountains. New York brought together a coalition of Northeastern States to challenge the revised permits of 26 of these plants. I did all the oral arguments in these cases in places like Cincinnati and Chicago. We lost them all. The decisions were not published, but the courts’ apparent reason was that fixing these plants would be expensive so Congress should deal with it.
We may have lost the cases, but we learned to work together.  Ever since , Attorneys General of the Northeastern States have used litigation to protect the environment when the federal government was not doing its job. States have been critical to the global warming effort and appear in most of the litigation. It is no accident that the state of Massachusetts was the lead petitioner in Massachusetts v. EPA.

Congress finally got around to doing something about acid rain in 1990. It passed the 1990 Amendments to the Clean Air Act, which gave these old plants a lot of free pollution allowances. The plants started buying low sulfur coal from the west, which they could have done a decade before, and the acid rain problem got better. The coal-fired power plants lived to pollute another day. Now they are at the center of the effort to reduce mercury and greenhouse gas emissions.

The fact that so much of our electricity is generated by coal is usually offered as a reason why we cannot switch to fuels with lower or no carbon footprint. The other excuse for doing nothing is that coal is cheap and abundant. None of these reasons stand up upon close examination. Right now, the United States has a lot of excess electric generating capacity because of the economic downturn. If we shut those old coal plants today no one would notice the difference. By the time the economy recovers, we will have new gas-fired plants and more wind and solar capacity. Coal is cheap in part because we subsidize it and pretty soon it will not be so abundant. Two independent studies have forecast that we will reach worldwide peak coal this year or soon. That means from now on the amount of coal mined per year will decrease because it is getting more expensive to mine.

This year we will see if these wily old survivors, these sixty-something coal-fired power plants will live to pollute a few more years. In 2011, EPA will propose two more sets of regulations which should make it uneconomic for these plants to continue: the hazardous air pollutant standards for mercury (“Utility MACT Rule”) and the New Source Performance Standards for Electric Generating Units (“Utility NSPS”). In the Alice In Wonderland world of the Clean Air Act, New Source Standards apply to old sources.

Deutsche Bank and Credit Suisse assume that these regulations will force a lot of coal plants to close, but what do Europeans know about American politics. Having pursued these very same coal plants for thirty years, I’ll believe it when it happens. There are, however, some favorable signs. No new coal plants have started construction in the past two years. Natural gas is cheap, so cheap it is a problem for wind and solar. And utility scale solar and wind projects are being approved.

I plan to live to 100 and I would like my epitaph to include “She closed some coal plants.”

4 Comments
  1. January 11, 2011 8:15 pm

    Marcia who? Please put your last name on posts. :o)

    I’d like to post your stuff on my blog and my client’s blog but I need your last name. And I bet some others who might not know you yet would like to know it.

    Thanks!

  2. January 11, 2011 8:18 pm

    Also: There’s a sentence near the end that reads: “In 201, EPA will propose two more sets of regulations which should make it uneconomic for these plants to continue: the hazardous air pollutant standards for mercury (“Utility MACT Rule”) and the New Source Performance Standards for Electric Generating Units (“Utility NSPS”). ” Can you give me the correct date on that? Thanks!!!!

  3. Marcia permalink
    January 12, 2011 1:36 pm

    2011

    Marcia J. Cleveland Legislative Representative, Sustainable Environment Program Friends Committee on National Legislation 245 Second Street, NE Washington, DC 20002-5761

    tel: (202) 547-6000, ext. 2520 email: marcia@fcnl.org

  4. John Rapach permalink
    January 16, 2011 9:17 pm

    Energy comes in many forms. It all costs money to produce. There are several solutions which also include conservation. Coal will be with us for a long time. It can be cleaned up to a better level. The problem is that the old coal fired power plants are the polluters. regardless of what we do, it will take enormous amounts of $. The consumer will end up paying for it. so, get ready to see large increases in the price of energy. Making your own is possible, but this will cosrt a major investment. The major projects are to ween our Country from foreign oil. we should also conserve our coal which has been exported for years. So, in the short run coal, natural gas, and nuclear are our best solutions to replace oil energy.

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