Cheap Natural Gas Will Kill More Coal Plants Than Us: EPA

Forbes

Aging coal-fired power plants cannot compete with plants burning the cheap, abundant natural gas now emerging from American shale formations, the EPA's chief air pollution official told senators this morning.

"What we are seeing now, with the change in the market that inexpensive natural gas has brought to the table, is a change in the marketability of those [coal] units and the electricity they generate," said Gina McCarthy, the Environmental Protection Agency's assistant administrator for air and radiation.

"So many retirements are expected just simply as a result of inexpensive natural gas."

The natural gas is being developed through fracking, a combination of horizontal drilling and pressured shattering of deep shale formations to free gas and oil trapped within them.

More coal plants will retire—federalspeak for "go out of business"—as a result of competition with natural gas than as a result of new air pollution control regulations proposed by the EPA, McCarthy said in testimony before the Senate Environment and Public Works Committee.

The proposed regulations, designed to reduce mercury, acid gases, organics, dioxin/furans and particulate matter, will shutter coal plants that generate about 1o gigawatts of electricity, McCarthy said, out of a total of 300 gigawatts that America derives from coal.

McCarthy did not hazard a comparable estimate for closures caused by competition with natural gas, but she said younger coal plants can compete because of increased efficiency, and equipment is available to upgrade older plants to meet the standard.

She disputed a claim by American Electric Power, the nation's largest coal-burning utility, that it would have to retire more than a quarter of its 25,000 MW capacity to comply with the proposed rule.

AEP Chairman and CEO Michael Morris said the retirements would "abruptly cut generation capacity in the Midwest."

AEP still has not come into compliance with existing regulations, McCarthy countered, and she accused the utility of misleading people by blaming proposed EPA regulations for existing market conditions.

"What AEP was doing was confusing information and attributing market conditions—and their failure to comply with earlier required reductions—with the impacts of these rules."

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