As a follow up to my last post, I realize the key issue that has changed, as heralded by Obama’s State of the Union address, is an ‘air of inevitability’ for coal emissions regulations. What would motivate an industry executive to throw their weight behind preferable coal regulations rather than completely fighting them and ridiculing the EPA to the public? A feeling that coal will be regulated no matter what, and therefore he or she should lend their voice to construct the most pallatable policies. Based on my time participating in advocacy groups in DC, this ‘air of inevitability’ is something lobbyists and lawmakers try to create as they know it changes the playing field. Well, along those lines, I may be able to applaud Obama for making such an onerous public threat of executive controls for emissions.
In addition, two news stories are out this morning that relate to this topic. First, development of a 1,200MW coal plant in Texas is being halted, as announced by its developer White Stallion Energy LLC (article here), citing EPA regulations and the price of natural gas. This seems to be a positive societal outcome, of mitigating emissions before relatively significant capital has been spent. A second article describes that New Mexico’s primary utility, PNM, has come to an agreement with the EPA over the regional haze dispute described in my first post under which it will shut two units of its San Juan power plant, and build a gas unit and install pollution controls. This may be a reasonable outcome as well, which I hope to look into at another time, and it will certainly add stability to the region to know the path forward for PNM’s major generators that have been under heavy scrutiny from the EPA for several year, Four Corners and San Juan (together 3,700MW).
A third notable development on this topic that I will mention is the EPAs release of a report confirming the ozone/disease link that it toted as support for its 2011 proposal to lower the ozone standard to 60 or 70 ppb from the 75 ppb set in 2008. This caused the industry to go up in arms, declaring both that it was prohibitively expensive and that the science behind such a reduction was faulty. There is an article on this topic here. It will be worthwhile to spend more time on this, see what the tea leaves are saying for the future, and come to a view on how this is being handled. One thing we can say, writing at 1,200 page report (the length of this reference EPA report) certainly creates some jobs, right?