EPA Facts

The High Cost of Red Tape:

In September 2013, the EPA issued proposed regulations that will limit the amount of carbon dioxide that can be emitted by new coal and natural gas power plants. The proposed limits for coal power plants are so stringent that the regulations will effectively create a moratorium on the construction of any new coal power plants unless carbon capture technology can be perfected. Since perfecting a cost-competitive carbon capture and sequestration process is unlikely to be feasible in the near future, the new emissions standards make it nearly impossible to build a new coal power plant.

So if somebody wants to build a coal-powered plant, they can. It’s just that it will bankrupt them because they’re going to be charged a huge sum for all that greenhouse gas that’s being emitted…That will also generate billions of dollars that we can invest in solar, wind, biodiesel and other alternative energy approaches.

Barack Obama, 2008

Regulations Will Cause the Cost of Electricity to Skyrocket

Coal-fired power plants currently produce an average of 1,768 pounds of carbon dioxide per megawatt hour. Yet the EPA’s new rule requires new power plants to emit no more than 1,100 pounds of carbon dioxide per megawatt hour—a likely impossible standard without utilizing carbon capture and sequestration (CCS). However, the EPA’s new rules effectively require the use of CCS before the new technology is commercially available. Though the new rule only impacts new power plants, the EPA plans to develop new carbon dioxide limits for existing power plants in the near future.

The U.S. Energy Information Administration projects that the use of coal will increase beginning in 2016 and continue to increase through 2040. If EPA regulations take effect and conventional coal-fired power plants must be replaced with plants utilizing unproven carbon capture and storage technology, the capital cost is projected to be over $2.2 trillion.

If instead of replacing conventional coal plants with clean coal plants we replace them with natural gas powered plants, electricity prices are still expected to rise significantly. Because coal is our largest source of power, relying almost completely on natural gas will result in a large increase in natural gas imports. Even with the current boom in natural gas production, the U.S. still imports more natural gas than it exports—if coal electricity is no longer an option, the U.S. will either have to step up domestic production (which has encountered resistance due the environmental concerns with fracking) or import more natural gas. Without diversity in supply, customers are more susceptible to changes in the price of other energy sources.

Twenty-two states rely on coal as their largest source of energy and 48 states rely on coal to produce at least some of their electricity. If the price of electricity from coal were to increase by 80 percent, it would add thousands of dollars to household electricity bills. The biggest increases will be shouldered by households in the coal-producing Midwest:

State Annual Increase in Household Electricity Bills
Illinois $865
Iowa $918
Indiana $984
Ohio $996
Missouri $1,032
Pennsylvania $1,104