Biden’s risky effort to take on coal

President Joe Biden’s newest bid to cut the nation’s climate pollution relies on a series of big bets.

The upcoming rule from the Environmental Protection Agency is expected to depend on rarely used technology for capturing power plants’ greenhouse gas pollution. It will have to survive the conservative Supreme Court that hobbled the EPA’s regulatory powers just 10 months ago. And it could make life harder for Democratic senators facing reelection in states like West Virginia, Montana and Ohio, which have large workforces that depend on fossil fuels.

Another crucial factor is the reelection campaign that Biden launched Tuesday: If Biden loses in 2024, a Republican president — possibly Donald Trump — could repeal the rule before it can take effect. Trump did exactly that to the similarly ambitious power plant climate rule that Barack Obama launched in August 2015.

Climate advocates say the gains from Biden’s gambit could be as big as the risks. The electric power sector is the nation’s second-largest source of greenhouse gases, so cleaning it up is essential to meeting Biden’s goal of having U.S. carbon pollution reach net zero by 2050. Environmentalists hope EPA will go bold by targeting not just coal, the dirtiest fuel in the power mix, but also natural gas — the reigning champ in the U.S. energy economy.

The EPA and the White House have declined to confirm any details about the rule, which is still undergoing review and could be released as early as next week.

“[W]e have been clear from the start that we will use all of our legally-upheld tools, grounded in decades-old bipartisan laws, to address dangerous air pollution and protect the air our children breathe today and for generations to come,” EPA said in a statement.

'Considerable risk here'

The Biden administration is already trying to take on the nation’s No. 1 carbon source — transportation — with an EPA auto-pollution rule released just two weeks ago that’s designed to spur a huge increase in sales of electric cars and trucks.

That rule is also at risk of political and legal attacks from Republicans, who accuse the president of endangering the economy by pushing green technologies before they’re ready.

But electric vehicles are already traveling the highways. In contrast, carbon-capturing technology is not yet in place in any active commercial power plant in the U.S., and industry groups argue it’s not ready for wide deployment.

That could make the EPA proposal especially vulnerable in the courts, because the Clean Air Act requires the agency to show that the technologies it proposes are “adequately demonstrated” — not something that might work in the future.

“I think there's considerable risk here,” said Justin Schwab, founder of the firm CGCN Law and a former EPA deputy general counsel during the Trump administration.

EPA’s rule is expected to set emissions limits for power plants that would in some fashion rely on achieving reductions in line with what carbon capture could achieve, according to people familiar with the proposal. States would then craft compliance plans and could choose other methods that achieve the same reductions, although what those options are remain unclear. The people were granted anonymity to discuss the proposal because the draft rule is not final.

The rule could also require operators of natural-gas-fired plants to reduce their carbon pollution by adding hydrogen to their fuel mix.

“Carbon capture and hydrogen are simply not well established technologies in the way that historical, traditional pollution control technologies have been when they've been adopted by EPA on a broad scale,” Schwab said.

Utilities and fossil fuel advocates have long argued that carbon capture and hydrogen could be important technologies for reducing sector emissions — but not for some time, even with recent unprecedented federal investments and incentives.

Climate advocates say the industry needs to put up or shut up.

“The fossil fuel industry says this [technology] is how they stay competitive in a carbon-constrained world. Well, we're in that carbon-constrained world now,” said Jim Murphy, director of legal advocacy for the National Wildlife Federation. “I think it's time for the fossil fuel industry to put their money where their mouth is.”

Tom Pyle, president of the pro-fossil fuel American Energy Alliance, accused the administration of issuing an overly aggressive rule that could compel utilities to shutter their coal plants as a political message to environmentalists ahead of Biden’s reelection.

“I think that the end goal is, they're really just trying to game the system for renewables,” Pyle said.

A 2024 message for both parties

Republicans are eager to tie the upcoming rule and every other Biden climate and energy policy to one of their major themes — the inflation that’s irking Americans and weighing down the president’s approval ratings.

Rules limiting fossil fuels would also align with the GOP’s narrative that Biden is out to shut down traditional home-grown energy, messages they’ve also sounded on gas stoves, oil drilling and cars.

Even if courts nix the upcoming EPA rules, their mere existence could prod utilities to shutter existing natural gas power plants depending on how the agency designs the regulations, said Todd Snitchler, president of the Electric Power Supply Association, a trade group that represents power generators. That would probably feed into Republicans’ broader criticisms of the Biden administration, he said.

“If we are in effect turning off natural gas,” Snitchler said, “I think they’re likely to lean into this to say the administration is raising your prices and jeopardizing power reliability.”

And after delaying action to await the Supreme Court’s ruling last summer, the EPA also has little time to defend the rules in court should Biden lose his reelection bid.

“These things are about the campaign,” said Republican energy lobbyist Mike McKenna. “That’s why they waited until year three.”

But going small would also carry risks by causing the U.S. to miss its climate goals, and it would turn off supporters Biden needs in 2024.

“The whole Biden coalition is built around this commitment” on climate change, said Dallas Burtraw, a senior fellow with the think tank Resources for the Future. He noted that the administration got Congress to pass a climate law last year that offers big incentives for clean power as well as hydrogen and carbon capture.

While the climate effort may drive enthusiasm among Biden’s green supporters, Senate Democrats’ hopes of keeping their slim majority depend on defending their turf in moderate states. Some, such as West Virginia, Michigan, Montana and Ohio, are home to big workforces in the automobile, coal and natural gas sectors.

Biden found a balance in the 2020 campaign, winning the blue-collar-heavy swing states of Pennsylvania, Michigan and Wisconsin while promising to eliminate carbon pollution from the power grid by 2035. At the time, he said carbon capture and hydrogen technology could give a lifeline to power industry workers. Few of Biden’s Democratic primary rivals shared that vision.

“The public fully understands that fossil fuels are creating pollution that is harming communities across the country,” said Matthew Davis, senior director of government affairs with the League of Conservation Voters, addressing questions about the upcoming EPA rules. “There is also a need to emphasize how important it is that we transition in a way that helps workers that are in those sectors.”

Some energy experts say electricity generation doesn’t offer Republicans the same potent weapon that Biden’s other green energy moves do.

“It doesn’t hit home to a driver or a homeowner as much as a gas stove or an electric car does,” said Frank Maisano, who represents energy clients at the law firm Bracewell. “I suspect most people don’t know they’re already getting a lot of renewable power because the sector has transitioned much faster than expected.”

But will it work?

For utilities, forthcoming investments and incentives from the federal government mean carbon capture could one day be an effective way to reduce power plants’ impact on warming the planet.

But the big question is whether it can do that now.

Only two commercial-scale coal-fired power plants in North America have installed carbon capture technologies: Petra Nova in Texas and Boundary Dam in Saskatchewan, Canada. Both projects experienced cost overruns and performance issues that caused them to miss their targets, and Petra Nova shut down after a few years in operation.

That means the technology flunks the Clean Air Act’s “adequately demonstrated” test, Bracewell attorney Scott Segal argued.

On the other hand, EPA has previously set standards that require industries to invest in new types of pollution controls, said Dena Adler, an attorney with New York University's Institute for Policy Integrity.

“The history of the Clean Air Act is filled with regulations where technologies were projected to be very expensive,” she said. “And after the regulations came down, industry figured out how to install these control technologies better and cheaper.”

But installing the technology isn’t the only hurdle. Requiring large amounts of carbon capture will also raise questions about what to do with all the CO2.

Oil producers can use carbon dioxide in “enhanced oil recovery” wells in which CO2 is pumped underground to push out difficult-to-reach oil — although those are mostly clustered in Texas, California and a few other states. It can also be pumped underground into geological formations.

Either option would probably require many new pipelines to be built to carry the gas to its destination — at a time when permitting is taking longer and the public increasingly opposes them.

Running carbon capture technologies also requires a significant amount of power, as much as 20 percent of a plant’s electricity output, the Congressional Research Service said last fall. Petra Nova powered its carbon capture equipment by building a 75-megawatt natural gas unit onsite, the emissions from which dampened the carbon reductions achieved by the coal-fired unit.

“If EPA wants its rule to survive, it needs a substantial basis in the record that its assumptions about the feasibility of the adoption of this technology have a real basis and that it's not just pie in the sky,” said Schwab.

Similarly knotty questions surround the possibility of utilities burning hydrogen alongside natural gas — another promising but unproven technology that they could use to comply with the upcoming rule.

SCOTUS’ shadow hangs over the rule

The courts may have the final say on EPA’s rule — as they did in knocking down both Obama’s power plant regulation and the Trump administration’s attempt to replace it.

The Supreme Court last summer split along ideological lines in striking down the Obama-era Clean Power Plan — while embracing a legal doctrine that forbids agencies from deciding “major questions” that legally rest with Congress. That doctrine doomed the Obama rule, which had pushed for a broad shift by utilities away from coal.

Biden’s foes could argue that his rule similarly runs afoul of the same legal standard if it effectively prompts utilities to shutter their coal plants.

But some legal experts see a bright spot for Biden in last year’s EPA ruling.

For one thing, NYU’s Adler said, an EPA standard based on carbon capture would be “entirely different” from the Obama regulation’s demand that utilities switch to cleaner fuel sources. Capturing pollution at the source “is really the bread and butter of the Clean Air Act and the type of regulation that EPA has been issuing for decades,” she said.

In addition, while Congress hasn’t explicitly changed EPA’s regulatory authority, Democrats have passed major investments as part of the 2021 bipartisan infrastructure law and the 2022 Inflation Reduction Act. Those laws provided billions of dollars in research grants for carbon capture and hydrogen, plus expanded tax credits to encourage adoption of those technologies.

But EPA can’t rely on those federal dollars to justify a more stringent regulation, said Schwab, the Trump-era agency veteran. He said it’s not clear the Clean Air Act even allows EPA to consider the availability of the money, and much of the funding may never materialize if a future Congress and administration undo the Biden-era laws
It’s unlikely that all of Biden’s many climate rules will survive Supreme Court scrutiny, environmental and energy lawyer Michael Buschbacher said in an email this week to POLITICO’s E&E News.

“The Biden administration appears to just want something to stick, essentially scaring industry into self-regulating,” wrote Buschbacher, a partner at Boyden Gray & Associates. He added, "This approach could backfire spectacularly.”