Rural Electric Co-Ops Sue to Stop EPA Power Plant Regulations

May 16, 2024

EPA’s new power plant rule relies heavily on carbon capture and sequestration to meet stringent new carbon dioxide reduction requirements, but rural electric cooperatives and nearly two dozen states say the technology is unproven.

The National Rural Electric Cooperative Association (NRECA) has asked the D.C. Circuit Court of Appeals to stay the rule, arguing that EPA’s timeline is unrealistic in part because it relies on CCS. Twenty-three state attorneys general also have sued.

The rule, announced last month and recently published in the Federal Register, requires existing coal-fired plants that wish to continue operating -- as well as new natural gas plants -- to reduce 90% of their CO2 emissions using CCS by 2032..

EPA and supporters of the rule insist the technology has been “adequately demonstrated,” as required by the Clean Air Act. They cite numerous examples of facilities around the world and in the United States where it is being used.

Executives of rural electric cooperatives told reporters Tuesday they are not opposed to CCS as a technology but argue EPA is relying too heavily on it.

Mac McLennan, president and CEO of Minnkota Power Cooperative in North Dakota, said Minnkota has been working for eight years on a CCS project it calls Project Tundra, which was cited by EPA in the rule as an example of a prospective carbon capture technology.

“We haven't captured a ton of CO2,” he said. “We haven't put a shovel in the ground. I have great confidence that we're going to capture substantial amounts of CO2 from our project. But for us to have a reference point called a 90% removal from EPA when it's yet undemonstrated or unverified, causes me pause.”

NRECA CEO Jim Matheson said that “no power plant has ever achieved 90% reduction in carbon with carbon capture and sequestration, so it has not been proven at commercial scale.”

“I am a significant cheerleader that CCS can provide an option for us as we move into the future,” McLennan said. “I'm concerned, however, that what EPA has done in this rule, ultimately, is unrealistic for most plants in this country.”

McLennan said the earliest that Minnkota's project could be in operation would be 2028 or 2029, “if I pull the trigger right now.”

NRECA said the rule threatens electric reliability, especially for power plant operators in colder climates who can lose access to renewable sources such as wind and solar in the winter.

“When it gets extremely cold where we live, not one ounce of that wind operates,” McLennan said, forcing the co-op to rely on coal-fired power generation.

Republican senators at a hearing last week echoed NRECA’s concerns, with Sen. Shelley Moore Capito of West Virginia going so far as to say, “We're going to build pipelines that are going to carry carbon? That's not going to happen.”

However, EPA said  that all components of CCS have been demonstrated simultaneously. Its rule said, "Even if the record only included demonstration of the individual components of CCS, the EPA would still determine that CCS is adequately demonstrated as it would be reasonable on a technical basis that the individual components are capable of functioning together.”

It said also, “CO2 capture technology providers have issued statements supportive of the application of systems and solvents for CO2 capture” at fossil fuel-fired electric generating units.

“These statements speak to the decades of experience that technology providers have and as noted below, vendors attest, and offer guarantees that 90 percent capture rates are achievable.” 

EPA's assertions were endorsed by Dan Lashof, director of the World Resources Institute.

Although he concedes CCS technology is not “super common” and there are challenges to the use of the technology, Lashof says there are indeed facilities, such as natural gas projects in Norway and a few coal-fired power plants that use it.

“We certainly know how to build and operate CO2 pipelines,” he says. “The oil and gas industry has been doing that for enhanced oil recovery for many years. The ability to inject CO2 underground has been demonstrated in multiple places.”

The safety of underground injection also has been studied extensively, he says. “There have been many scientific studies … by the National Academy, by the [Intergovernmental Panel on Climate Change], and others, all of which concluded if you do it right, which means being careful about characterizing the sites and picking appropriate geological formations, there is very low risk of CO2 leakage or of induced seismicity.”

Simone Stewart, senior industrial policy specialist at the National Wildlife Federation, called CCS “part of the portfolio of solutions that we think are necessary for addressing the climate crisis.”

“It's definitely not a silver bullet,” she said, adding that NWF mainly works in the area of decarbonizing industrial plants, where there is untapped potential to use CCS.

“It's experienced deployment globally,” she said, while echoing Lashof’s comment that it hasn’t been widely deployed in the U.S.

Lashof says a big reason for that has been the lack of incentives, which now include the Inflation Reduction Act’s tax credit paying $85/ton for each ton of permanently sequestered carbon.

“There haven't been that many projects, because frankly, there hasn't been a regulatory or market driver for those projects,” he said. Noting the IRA was passed just two years ago, he said, “These projects take a while to develop. So it's not surprising that there aren't that many.”

“This technology has been demonstrated scientifically for decades,” Stewart said. “It's been demonstrated at the commercial scale in other places. We have a robust oil and gas industry that has experience with similar technologies and similar kinds of pathways with sequestration and enhanced oil recovery.”

She said it’s now a matter of taking all that has been learned so far and using the new tax incentives to spur wider acceptance of CCS.

She also pointed to work being done by the Department of Energy on carbon capture demonstration projects with funding from the Bipartisan Infrastructure Law. “What they're doing now is they're deploying that money to take these facilities and do CCS.”

But the rule, like most major EPA regulations, likely will have to go through a lengthy court battle. Matheson said there is a “sense of urgency.” NRECA wants “time for the litigation to play out to establish whether or not, in the long run, this is an appropriate use of the Clean Air Act or not."

A date in the Supreme Court could await. The court already had struck down EPA’s previous power plant rule, saying the agency had strayed beyond its statutory mandate. Lashof said EPA did all it could in the current rule to make it compatible with the court’s 2022 opinion.

Source: Agri-Pulse