EPA Rule Would Stress Power, Gas Grids

October 2011, Vol. 238 No. 10

The Environmental Protection Agency has released the Cross-State Air Pollution Rule, an addendum to the Clean Air Act, with the goal of reducing sulfur dioxide and nitrogen oxide emissions from power plants.

The required emissions reductions would take effect in 2012 and affect more than 1,000 power plants in 27 eastern states. Based on these estimates, using EPA’s Continuous Emissions Monitoring System (CEMS) data, BENTEK calculates gas demand from power would increase 35%, or 7 Bcf/d, by 2014.

BENTEK’s new Market Alert, EPA Rule Would Stress Power, Gas Grids, is based on BENTEK’s power database, GenCast, which relies heavily on actual data from CEMS and other power data. CEMS covers 97% of all oil, coal and natural gas-fired generation across the U.S. According to BENTEK’s analysis, the ruling would force 50 GW of coal-fired power units to either be retired or converted to burn natural gas.

*The rule, as crafted, could lead to operational problems on the power and gas pipeline networks.
*Domestic coal demand could drop 15% by 2014 if the rule becomes effective.
*New emissions equipment costs could exceed $20 billion.
*BENTEK believes implementation of the rule will be delayed.

The analysis reveals substantial coal plant shutdowns, curtailments or emissions equipment additions would be required in the Northeast, Midwest, Southeast, Texas and Midcontinent regions.

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