Presentation on theme: "The Regulatory Tsunami"— Presentation transcript:
1 The Regulatory Tsunami Rich TrzupekTrinity Consultants, Inc.
2 “In 2010, total U. S. greenhouse gas emissions were 6,865 “In 2010, total U.S. greenhouse gas emissions were 6,865.5 Tg or million metric tons CO2 Eq. Total U.S. emissions have increased by 11.0 percent from 1990 to 2010…”Source: USEPA DRAFT INVENTORY OF U.S. GREENHOUSE GAS EMISSIONS AND SINKS: 1990 – 2010 – Executive Summary
3 “In 2010, total U. S. greenhouse gas emissions were 6,865 “In 2010, total U.S. greenhouse gas emissions were 6,865.5 Tg or million metric tons CO2 Eq. Total U.S. emissions have increased by 11.0 percent from 1990 to 2010…”Source: USEPA DRAFT INVENTORY OF U.S. GREENHOUSE GAS EMISSIONS AND SINKS: 1990 – 2010 – Executive Summary
4 GHG Reductions Continue Directly Targeted Regulations & ProgramsGHG Permitting & LimitsRegional ProgramsRenewable Portfolio StandardsRenewable Subsidies/Grants/Other Wastes of MoneyIndirectly Targeted RegulationsAmbient Air StandardsIndustrial and Utility Boiler RulesAggressive Enforcement
6 GHG Permitting COAL RIP 300,000,000 BC to 2012 AD Targets plants with 100,000 tpy CO2e emissions or moreRoughly a 10 MW coal plant or largerVERY small in power generation worldPlants must use “Best Available Control Technology” to reduce GHG emissionsDetailed guidance to permit authoritiesRIPCOAL300,000,000 BC to 2012 AD
7 GHG Limits COAL RIP You Kept Us Warm 1,000 lbs CO2e/MW Generated Combined cycle gas can doCoal can notEPA dances around Clean Air Act30 year averaging!Ignores financial realityRIPCOALYou Kept UsWarm
8 Regional Programs COAL RIP We Dead Dinos Regional Greenhouse Gas Initiative (East Coast)Trading Program – active since 2009Midwest Greenhouse Gas Reduction Accord (Midwest)Western Climate Initiative (West Coast)More regional trading on the way?RIPCOALWeDead Dinos
12 Obama’s Energy PolicyI’m bound to finda parachutesomewhere….
13 New Ambient Air Regs.National Ambient Air Quality Standards (NAAQS) define “clean air”A moving targetKeeps EPA, enviros and consultants in businessBig projects must model to show complianceNew short term Nitrogen Oxides (NOx) NAAQSVERY stringentCoal plants can’t meetNew short term Sulfur Dioxide (SO2) NAAQSCompliance by modeling, NOT monitoring!Coal plants, refineries are targets
14 New Boiler Rules Boiler MACT Utility MACT Targets industrial boilersStated goal: reduce toxic emissionsReal goal: stick it to coalUnrealistic emissions limitsEnergy efficiency requirementsWill hurt manufacturingUtility MACTTargets utility boilersReal goal: (see Boiler MACT)Both rules put EPA in the control room for first time
15 Enforcement Small coal boilers targeted too Option 1: switch to biomassOption 2: shut downOption 3: enforcementAs rules pile on, enforcement opportunities growLess environmental returnBUT – keeps $ flowing in to EPA
16 Result 50 – 80 GW of Coal Plant Retirements over next ~5 years Natural Gas fired turbines to fill most of gapSolar/Wind can’t be base-loadedNatural Gas meets GHG standardsNatural Gas plants can be built quicklyMuch more GHG reductions – 500,000,000 tons +Natural Gas VERY cheap now, but:Prices historically not as stable as coalCurrent glut will create demandIncreased shale gas regulation can affect priceGrid stability issues?Unlikely – cost certainty the bigger issue