As Wyoming’s delegation cheers the rollout of the Trump administration’s replacement for the Clean Power Plan, mining data and an old study show declines predicted from the greener Obama proposal came true without that regulation ever going into effect.
“The so-called ‘Clean Power Plan’ would have mandated the shutdown of power plants and increased energy costs for families in Wyoming and across the country,” said Sen. John Barrasso (R-Wyoming) in a press release celebrating the Affordable Clean Energy rule last week. He called the new rule “good news for Wyoming.”
But good news remains hard to find for Wyoming’s coal country, where declines in production have sparked mine company bankruptcies even though the Clean Power Plan was never implemented. The reason is market forces, said Rob Godby, the director of the University of Wyoming’s Center for Energy Economics and Public Policy.
“Right now the outcomes we have are as bad as the worst outcomes we expected under the Clean Power Plan at the time,” Godby said.
A 2015 paper written by Godby and colleague Roger Coupal suggested the impacts of the Clean Power Plan on Wyoming coal production would be “severe.” The paper predicted “maximum decline scenarios” of a drop from 2012 production levels to the level of anywhere from 32%-51% by 2030.
The year of the study, Wyoming coal production produced nearly 377 million short tons, according to data maintained by the Wyoming State Geological Survey. By 2015, however, coal’s decline was already underway. The high came in 2008 at around 446 million short tons, according to a list kept by the industry group the Wyoming Mining Association.
By 2019, the researchers predicted Wyoming coal production dropping to around 350 million short tons a year under the lowest impact scenario of the Clean Power Plan.
From the mining perspective, the reality has proven worse than the worst fears of decline envisioned by Godby and Coupal under the Clean Power Plan. In 2018, the state produced 304 million short tons. Compared to 2012 production levels, it’s a decline of roughly 25%. The pace of decline without regulations is well ahead of UW researchers’ predictions of a low end decline of 32% by 2030 under the Clean Power Plan.
“So it happened faster and without any federal [carbon] emission regulations,” Godby said in an interview last month.
The federal Environmental Protection Agency’s own analysis of impacts from the new rule appears to bear out such assessments.
When it comes to carbon emissions, the EPA argues market forces are slowing output of the greenhouse gas on its own as the energy sector shifts away from coal. The argument nods to the market forces hurting Wyoming coal production.
“The electric sector is already on track to meet the goals of the [Clean Power Plan], even though it is not being implemented,” an EPA fact sheet accompanying the new rule’s release says.
Though considered very friendly to coal-fired power, in particular when compared to the Clean Power Plan, the EPA estimates the new rule will still increase the decline in western coal mining, albeit only slightly. The EPA predicts the new regulation would increase declines in production by 1%.
But the new rule may not impact many utility companies’ professed plans to shift to clean energy sources, which is likely to continue dealing tough blows to coal mining in the Powder River Basin and elsewhere.
Those decisions would hasten coal’s structural decline but are irrelevant to EPA’s estimated impact of its new rule, the agency argued.
“Many utilities have announced long-term clean energy and/or climate commitments,” the EPA’s regulatory impact analysis says, “with a phasing out of large amounts of coal capacity by 2030 and continuing through 2050. These announcements, some of which are not legally binding, are not necessarily reflected in the baseline.”
New rule panned as giveaway to coal
Trump’s former EPA chief Scott Pruitt blocked the Clean Power Plan. Pruitt shelved the regulation, which would have given states targets to meet in reducing carbon emissions, when he chose not to combat court challenges from states opposed to it. Pruitt resigned following ethics investigations into his administration and the EPA is now under the direction of Andrew Wheeler.
Wheeler, a former coal industry lobbyist, this week announced the Trump administration’s replacement for the Clean Power Plan. The Affordable Clean Energy rule provides more “achievable and realistic standards for reducing greenhouse gas” emissions from coal plants, according to the EPA.
The new rule relies on the suggestion that increased efficiency from coal-fired plants is the best and least government-intrusive way to reduce their carbon dioxide emissions. The rule leaves it to the states to set reduction targets for specific power plants. It incentivizes utility companies to invest in new technologies for aging coal-fired power plants as opposed to moving on from the power source to renewable energy or natural gas.
The plan has been panned by environmentalists as an attempt to prop up the coal industry at the cost of public health. The Sierra Club has deemed it “the Dirty Power Plan” in press statements.
“The Dirty Power Plan is an illegally weak and intentionally vague effort to roll-back the Obama administration’s Clean Power Plan,” the Sierra Club’s Deputy Press Secretary Caleb Heeringa wrote to news outlets last week. “It gives a lifeline to coal billionaires to keep their polluting plants open just a little bit longer.”
The plan tries to fight the energy-market tide for coal while increasing emissions, the Sierra Club said.
“The Dirty Power Plan is meant to prop up failing coal-fired power plants by eliminating the Clean Power Plan’s legal structure,” Heeringa wrote, “which would incentivize clean energy growth, and instead focuses entirely on minimal ‘tune-ups’ at coal plants that would achieve only paltry emission reductions, while possibly increasing total emissions by incentivizing owners to run the plants more often.”
In a separate press release, the director of the Wyoming Chapter of the Sierra Club argued that coal’s race has been run and further decline is inevitable in the far of cheaper renewable energy.
“There’s nothing the federal government can do that will change the fundamental economic challenges facing aging coal plants,” wrote director Connie Wilbert. “It’s time to embrace these permanent changes in the energy world and make sure Wyoming and Montana are building the clean energy that the public is demanding.”
But Travis Deti, executive director of the Wyoming Mining Association, told Wyoming Public Media the new plan is more “realistic” than the Clean Power Plan.
“The focus is on regulating those individual sources in a state rather than trying to remake the entire power grid,” Deti told the radio station.
Republican U.S. Sen Mike Enzi wrote that he’s glad the EPA is replacing the Clean Power Plan, “which was designed to put coal out of business.”
“States, not the federal government, are in the best position to set energy policies that work best for them,” his statement posted on the EPA website read.
U.S. Rep. Liz Cheney, also a Republican, said in a statement that Trump is “working to strengthen the Wyoming economy and protect the energy industry.”
Plan snubs carbon capture
Some in Wyoming’s political ring, including Gov. Mark Gordon, are looking to the development of carbon capture technologies for coal plants as a way to keep them relevant in a carbon-conscious world. The Affordable Clean Energy rule however does not include carbon capture and sequestration in a list of technologies it suggests coal plants could pursue to comply with new regulations.
Following in the wake of his predecessor Matt Mead, Gordon in recent public appearances has suggested Wyoming could help develop carbon capture, sequestration and utilization (like using the carbon to stimulate oil production). He’s gotten $5 million from the Legislature for that effort already, and is likely to ask for more this coming legislative session.
Gordon is also interested in a technology that would pair coal plants with the burning of biomass to make them “carbon negative,” he told WyoFile in a recent interview.
While the Trump energy department looks favorably on carbon capture, the EPA in its new rule concluded such technologies remain too costly to be a viable way to reduce power plant emissions. Low profit margins at most coal plants means installing the technologies would be “exorbitant” if they were demanded by regulation, the EPA concluded.
Nor does a new federal tax credit for carbon capture that was pushed in part by Barrasso last year make the technology feasible under the new rule, the EPA concluded. The tax credit could subsidize the cost of the technologies for utility companies, a federal notice says, but it requires them to begin installing CCS technologies too soon to go hand-in-hand with the new rule.
The rule does not prevent utilities and states from suggesting carbon capture for certain power plants as a way to meet their emission reduction targets, however.