EPA Power Plant Rule Could Force Fossil Fuel Companies to Walk Their Talk on Carbon Capture

A certain irony has threaded its way through the endless rulemaking filings, legal challenges, and political vicissitudes of the decades-long fight to stop U.S. fossil fuel power plants from spewing carbon dioxide emissions into the air. A recent example is last year’s Supreme Court West Virginia v E.P.A. ruling. At the time, it was widely seen as a serious blow to the Biden Administration’s ambitions to cut power sector emissions. Now, the agency is using the parameters set by that ruling to pound an industry responsible for 25% of U.S. greenhouse gas emissions once more.

The Supreme Court’s ruling blocked the EPA from forcing power sector emitters to switch to clean energy, saying instead the agency could only mandate emissions cuts based on technology that could be deployed “within the fenceline” of power facilities themselves. This morning, the EPA unveiled a new rule that would do just that, requiring most coal and natural gas power plants to cut greenhouse gas emissions by 90% by 2040. Where the previous mandates were based on so-called “generation shifting” as the best available means of power plants reducing emissions—i.e. shutting down and building renewables instead—the new emission reduction rules are based on the capabilities of technology such as carbon capture and storage (CCS) that companies could deploy on the grounds of their power facilities themselves.

So, last year’s setback is now something of a legal backing for the EPA’s new position. After all, the Supreme Court has reiterated that mandating emissions cuts based on what power plants can do on-site falls squarely within the agency’s purview. Still, today’s rule doesn’t actually mandate what solutions power companies should use. They could use CCS or burn hydrogen in former natural gas plants, which are some of the options that the new standards are based on—though those options are likely to be much more costly than generation shifting. And if power producers happen to think that setting up multimillion dollar systems to filter out thousands of tons of carbon dioxide is too expensive of a hassle, they always have the option to shut down those coal or natural gas power plants and switch to cheaper, cleaner solar or wind energy.

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“The EPA will have a strong argument that carbon capture technology is something that can be implemented by or at a facility and within the fence line,” says Ethan Shenkman, a partner at law firm Arnold and Porter and former EPA deputy general counsel under the Obama Administration.

Still, he says, “that doesn’t mean they’re home free,” since there’s other ways that litigants could try to prove that the agency exceeded its authority in these new emissions regulations.

Read more: The Inflation Reduction Act Includes a Bonanza for the Carbon Capture Industry

Another recent irony is that it’s the supposed capabilities of carbon capture technology, long championed by the fossil fuel industry and distrusted by environmentalists, that’s now being used as a cudgel against the owners of coal and natural gas power plants. And the prospect of such regulation has led to some interesting mixed messages on the actual readiness of the technology from some fossil fuel players.

Utility National Grid, for instance, says in its net zero plan that it might not shut down all its natural gas plants by 2050, but that that’s alright because it’ll use CCS to suck out their CO2 emissions from smokestacks and bury them underground. Some environmentalists might see that as a hand-wavy promise of using as-yet unproven tech to justify continued investments in natural gas. But according to National Grid, it’s perfectly reasonable. As the company writes on its website, the technology has “traditionally been viewed as expensive and unpractical at scale. This is changing, however, as investment and research into carbon capturing technologies takes off.”

Yet, as it became clear the EPA might begin basing emissions standards on the fact that it was feasible to use such technology, lawyers representing National Grid took a very different line. Last June, a coalition of power companies that included National Grid submitted comments to an EPA white paper on CCS, saying that the power companies’ work in CCS technology gave them “particular insight into the low likelihood that CCUS [carbon capture, utilization, and storage] will be sufficiently developed to be considered as a viable CO2 control technology in forthcoming proposed rules under Clean Air Act Section 111.”

National Grid distanced itself from the group’s comments in an email to TIME. “Comments like these are based on consensus and not a perfect representation of company views,” a company representative wrote, adding that they support CCS “when it is technologically and economically viable.”

Others see things differently. “This technology has been held up by industry as a way to continue to use fossil fuels for electric power generation and meet whatever emission reductions goals they’ve set,” says Lissa Lynch, the director of the federal legal group at the Natural Resource Defense Council’s climate and clean energy program. “Now that they’re being called on it, they are claiming that it’s too speculative, too far in the future, too expensive, too difficult.”

The question of whether CCS technology is feasible and relatively affordable could be of crucial significance in an expected slew of legal challenges to the EPA’s rule once it is finalized. Plaintiffs may try to prove that the agency has exceeded its authority under the Clean Air Act by drafting emissions reduction requirements based on technology they can’t realistically use.

The industry might also target the EPA’s slow permitting process in lawsuits. To fully implement CCS technology, power companies need to build special wells where they can store the carbon they captured. Some fossil fuel advocates have already begun pointing to the EPA’s permitting backlog for these wells to argue the agency isn’t doing enough to allow companies to actually implement the technology. “The very same agency that is pushing the rule out saying that the industry should rely on CCS to meet these targets, is slow walking the permitting process,” says Tom Pyle, president of the pro-fossil fuel American Energy Alliance.

To counter these arguments, the EPA may end up trying to prove that CCS is viable. Shenkman says the agency will likely start permitting a lot of wellheads for carbon capture. Recent government action, like federal funds being funneled towards CCS demonstration projects, as well as the huge new tax credits for storing carbon that Congress passed in last summer’s climate bill, could also be a significant boon to the EPA’s argument. Those developments, says Jessie Stolark, director of the Carbon Capture Coalition, have made a huge difference in the prospects for using the technology. “It’s really a sea change,” she says.

More broadly, the EPA has the right and obligation to use regulations to force CCS development along, just as it did in previous mandates for power plants to filter out other pollutants, according to Lynch. The technology has to be feasible—but that doesn’t mean that it’s available at the hardware store.

“Every single time, industry claims that it’s going to be impossible, and then when standards are in place, industry innovates and comes up with better, faster, cheaper ways of reducing pollution,” Lynch says. “But there’s no incentive to do any of that innovation until those standards are in place.”

Correction, May 11

The original version of this story misstated the name of the Natural Resources Defense Council. It is the Natural Resources Defense Council, not the National Resources Defense Council.