On Monday, the EPA issued updated rules on pollution limits that haven’t been updated in over 30 years. The rules cover water pollution that results from burning coal for power, pollution that can place a variety of toxic metals into the nation’s waterways. The 2020 regulations replace an Obama-era attempt to set more stringent rules to limit pollution, with the changes motivated in part by the EPA’s decision to avoid having the added costs of control measures push any coal plants out of business.
From fossil fuels to water
Coal is the dirtiest form of electricity generation, with a lot of its problems caused by the release into the air of particulates, toxic metals like mercury, and harmful environmental chemicals like sulfates. But, somewhat ironically, controlling these pollutants creates its own set of problems. Many of processes that remove these chemicals from coal plant exhaust end up with some of the exhaust components dissolved in water.
In addition, the byproduct of coal production, the coal ash, is often cooled and moved out of the plant using water, producing even more contaminated material. The list of toxic materials in this water is extensive—arsenic, lead, mercury, selenium, chromium, and cadmium. These materials have a variety of health effects, and many can persist in the environment for decades or longer. The EPA has estimated that this contaminated water accounts for about 30 percent of all of the toxic pollutants releases in the United States.
This water is regulated, but those regulations date from the 1980s and thus are relatively lenient and don’t necessarily reflect the technology currently in use. During the Obama administration, the EPA issued updated rules designed to reduce the release of polluted water significantly. While it would be expensive—with compliance estimated to be $480 million annually spread across the generating industry—the cost would be offset by public savings of a similar amount.
Naturally, companies reliant on coal-powered generation sued. The suit was ongoing when the Trump administration announced that it would revise the rules in 2017. Yesterday, the final regulations were released. While those will undoubtedly trigger lawsuits as well, they will remain in place until a future administration re-does the entire rule-making process.
The new EPA regulations ease off in a variety of ways. The EPA has examined a variety of pollution technologies and decided a number of them are too expensive, even if they are more effective at removing these toxins. Utilities are also given more time to get their plants into compliance, and plants that are slated for closing by 2028 won’t be expected to control these pollutants at all.
Under the 2015 rules, the EPA estimates that 108 power plants would have to pay some net costs for compliance. Under the new rules, that will drop to 75 plants, although some of the decrease is due to a combination of plant closures and conversion to burning natural gas. Overall, compared to the 2015 plan, the EPA says compliance with its new rules will cost $140 million less annually. If all those costs are passed on to residential customers, the savings compared to 2015 would mean everybody would save a grand total of 49 cents each year.
In return for that, the societal-level savings from decreased pollution are basically wiped out. Depending on economic assumptions, the new rules may actually result in a netcost, with the maximal possible benefit being just $46 million.
Given the public statements of the Trump administration, it’s easy to suspect that the changes were made specifically for the benefit of the coal industry. But the EPA makes this explicit in the new rules themselves.
The plants that will close before 2028, which are exempt from the rules, are being closed because they aren’t likely to be run economically even without the added costs of pollution controls. When the draft rules were first public, people criticized them for establishing a category “to ‘avoid premature closures.'” The EPA says it has the authority to do so, going on to say “EPA’s view that marginal plants should not be forced into retirement while they still have a useful role to play in ensuring electric reliability.”
Even the EPA, however, acknowledges that natural gas and renewables are forcing coal plants out of business on price alone. It’s likely that the EPA rule changes have, at best, given the remaining plants a temporary reprieve. At worst, the rules will be revised again as soon as Trump is out of office, with the coal industry facing regulatory uncertainty in the meantime.