EPA helping Appalachia

New regulation could raise demand

By Bradley Fields - [email protected]

President Barack Obama has announced the U.S. Environmental Protection Agency’s final “Clean Power Plan.”

According to a press release, the plan will cut carbon pollution by 870 million tons, and that power plants account for roughly one-third of all carbon emissions. By the year 2030, it says sulfur dioxide emissions will be 90 percent lower and nitrogen oxides 72 percent less, compared to levels in 2005.

The release says the plan reflects the public’s input. The plan had more than 4.3 million comments while posted on a forum. The EPA claims the plan allows states to set up emissions standards to achieve goals and allows them the flexibility they’ll need to meet those goals, and if they cannot meet those goals, the EPA will implement standards for them.

The title of the release was “Obama Administration Takes Historic Action on Climate Change.” It went on to say, “The Clean Power Plan accelerates the transition to a clean energy future, which is happening even faster than expected, which means carbon and air pollution are already decreasing, improving public health year by year.”

According to the statistics provided in the press release regarding emissions standards, the plan will force power plants to distance themselves from coal even further, which could cause further injury to coal mining economies of Appalachia.

If carbon and air pollution are already decreasing, why is there any need for more strict regulations from the federal government? The U.S. Supreme Court struck down an EPA emission rule in June, saying the EPA didn’t perform a cost benefit analysis when implementing regulations. If the EPA has been doing the research it claims it does, then why did they use pollution results from 2005?

The last air quality and emissions regulations the EPA enacted cost power companies billions of dollars for renovations and conversions in order to comply with the new standards.

Although the press release would indicate the coal market will suffer further losses, Appalachian coal mines may be a huge beneficiary of these new regulations. Coal is different depending on the seam it lies in and the area of the country it’s found. Power companies have been doing research on coal for decades. They monitor things like temperature, impurities, volatility, ash content and many other attributes of coal. Some coal burns at higher temperatures than others, which is the biggest indicator of how much the coal is worth.

Appalachian coal typically burns much hotter than coal in other parts of the country and has fewer impurities, so in the past power companies were forced to buy Appalachian coal at higher prices to blend with cheaper coal to decrease impurities per ton, and increase the megawatt output of the cheaper coal in order to comply with EPA emissions standards.

Coal from different parts of the country like the Powder River basin and the Illinois basin haven’t suffered the same decrease in demand as Appalachian coal. Coal from these basins have many more impurities than coal from the Appalachian basins and burn cooler. It can take around 6-8 tons of Powder River basin coal to match the megawatt output of 1 ton of Appalachian coal. In theory, if power plants only burned Appalachian coal, emissions would decrease by around 60 percent instantly.

Patriot Coal’s Manager of Safety Andy Fields said this would cause problems on a large scale, due to the higher prices of Appalachian coal. He explained power companies didn’t have to keep plants open while they converted them to use a different resource. He said, “They can, and have decommissioned several coal powered plants and not built anything back. They buy excess off a grid from another part of the country. That’s where another major problem will pop up. If there is no excess on the grid and they can’t buy needed power, they will shut off power to customers. People will pay high electric rates, less power will be available and could even suffer black outs.”

In the EPA’s new plan, states have different emissions limits. Some states will have a clear advantage over others when power companies buy excess from other grids to provide electricity to states with more stringent emissions standards.

In past regulations, power companies had to install “scrubbers” to reduce sulfur emissions from burning coal. The scrubbers decreased the demand for Appalachian coal, because they didn’t need it to stay in compliance with regulations. With the new regulations, Appalachian coal may once again be needed to blend with cheaper coal. Some states may have a greater demand for the coal as well, since regulation will be on an individual basis.

Fields said, “While the new regulations could hurt coal as a whole, they may turn out to be a blessing for Appalachian miners.”

Reach Bradley Fields at 606-909-4146 or on Twitter @bradley_HDE.

New regulation could raise demand

By Bradley Fields

[email protected]

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