Federal

The Center for Climate and Energy Solutions seeks to inform the design and implementation of federal policies that will significantly reduce greenhouse gas emissions. Drawing from its extensive peer-reviewed published works, in-house policy analyses, and tracking of current legislative proposals, the Center provides research, analysis, and recommendations to policymakers in Congress and the Executive Branch. Read More
 

Reducing methane emissions from the oil and gas sector

The Environmental Protection Agency (EPA) is pursuing regulatory and voluntary steps to reduce methane emissions from the oil and natural gas production system, the largest manmade source of this potent greenhouse gas.

On January 14, 2015, EPA announced a goal to cut methane emissions from the oil and gas sector by 40 – 45 percent from 2012 levels by 2025. As part of achieving this goal, it released proposed regulations under Section 111(b) of the Clean Air Act on August 18, 2015 for new and modified sources of methane emissions from the oil and natural gas sector. These regulations will be finalized by summer 2016.

EPA also plans to work collaboratively with industry and states, including expanding its voluntary Natural Gas Star program, to reduce methane from existing oil and gas operations.

Steps to reduce methane from other sources, such as landfills and coal mines, are also part of President Obama’s Climate Action Plan.

What is methane?

Methane, or CH4, is the main component of natural gas. When combusted as fuel, natural gas produces half as much carbon dioxide emissions as coal, and one third less than oil (per unit of energy produced). However, natural gas that is released into the atmosphere without being combusted is a potent greenhouse gas.

Why is it important to reduce methane emissions?

Methane is the second biggest driver of climate change. It is much more potent than carbon dioxide (CO2) at increasing the atmosphere’s heat-trapping ability, but it remains in the atmosphere a much shorter time (a little more than a decade compared with hundreds of years for CO2).

Averaged over a 100-year time frame, the warming potential of methane is about 21 times stronger than that of CO2. However, in a 20-year time frame, it is 72 times more potent. (The most recent report by the Intergovernmental Panel on Climate Change raises estimates of the global warming potential of methane to 34 times stronger than CO2 for the 100-year time frame, and 86 times stronger for the 20-year time frame. However the earlier estimates are still used to maintain comparability among U.S. greenhouse gas Inventory reports.)

Because methane is potent and short-lived, reducing methane emissions can have a more immediate benefit, and is especially important at a time of growing U.S. oil and natural gas production.

What are the primary sources of methane emissions in the United States?

Natural gas and petroleum systems are the largest emitters of methane in the U.S., according to EPA estimates. These emissions come from intentional and unintentional releases.

Agriculture, solid waste landfills, and coal mines are also major sources and are addressed by other EPA programs.

Figure 1: 2012 U.S. Methane Emissions, By Source

In 2012, U.S. methane emissions totaled 567 million metric tons of carbon dioxide equivalent.

Source: U.S. Environmental Protection Agency, “Draft Inventory of U.S. Greenhouse Gas Emissions and Sinks: 1990-2012” (Washington, DC: U.S. Environmental Protection Agency, 2014), http://www.epa.gov/climatechange/ghgemissions/usinventoryreport.html.

How much methane is released in oil and natural gas production and how will this announcement improve the accuracy of measurements?

Methane is released unintentionally and intentionally from oil and gas systems. According to EPA, natural gas and petroleum systems were responsible for 29 percent of methane emissions in 2012. The rate of methane emissions from the sector has decreased in recent years, even as natural gas production has surged.

However, independent studies estimate a wide range of leak rates from natural gas production, from 0.71 to 7.9 percent. More comprehensive studies are needed for accurate results.

EPA has committed to examining options for applying remote sensing and other technologies to improve methane emissions data accuracy and transparency, and strengthening reporting requirements for methane in its Greenhouse Gas Reporting Program.

Why is methane intentionally released?

In the production process, small amounts of methane can leak unintentionally. In addition, methane may be intentionally released or vented to the atmosphere for safety reasons at the wellhead or to reduce pressure from equipment or pipelines.

How does EPA propose to address methane emissions from oil and natural gas production?

EPA proposed a rule in August 2015 that will require new operators of new oil and gas wells to find and repair leaks, capture natural gas from the completion of hydraulically fractured oil wells, limit emissions from new and modified pneumatic pumps, and limit emissions from several types of equipment used at natural gas transmission compressor stations, including compressors and pneumatic controllers. EPA estimates that this proposal would prevent the emission of 340,000 to 400,000 short tons of methane in 2025, which is the equivalent of 7.7 to 9 million metric tons of carbon dioxide. A final rule is expected in 2016.

EPA already regulates Volatile Organic Compounds (VOCs, which are ozone-forming pollutants) from new oil and gas production sources, which has the side benefit of also reducing methane. EPA plans to apply VOC standards to existing oil and gas systems in areas that do not meet the ozone health standard and in northeastern states in the Ozone Transport Region.

For other existing oil and gas production, EPA said it will work collaboratively with states and industry, including the One Future Initiative and the Downstream Initiative, to reduce methane emissions through voluntary programs, such as the Natural Gas STAR program. One Future and the Downstream Initiative are industry-led, voluntary partnerships to reduce methane emissions from across the natural gas value chain and within distribution networks, respectively. The goal is to encourage innovation, provide transparency, and track progress toward specific methane emission reduction goals. The announcement noted that voluntary action by industry may reduce the need for future regulation, referring to regulation of existing sources under Section 111(d) of the Clean Air Act. However, the administration noted that they will be evaluating progress on voluntary actions and determining if any additional steps are needed.

In addition, the Interior Department’s Bureau of Land Management has committed to update its standards to reduce leaks and flaring of methane from both new and existing oil and gas wells on public lands. The timeline to propose new standards, which was to happen in spring 2015, has been delayed.

What entities will be covered by the regulations?

The proposed rule would cover new and modified oil and gas production sources, and natural gas processing and transmission sources. Specifically, EPA notes it will look to reduce emissions from five specific sources discussed in technical papers released in spring 2014: oil well completions, pneumatic pumps, and leaks from well sites, gathering and boosting stations, and compressor stations. In developing new standards, EPA says it will focus on in-use technologies, current industry practices, emerging innovations and streamlined and flexible regulatory approaches to ensure that emissions reductions can be achieved as oil and gas production and operations continue to grow.

How would the EPA’s proposed methane actions complement existing regulation?

In April 2012, the U.S. Environmental Protection Agency (EPA) finalized new source performance standards (NSPS) and hazardous air pollutant regulations for oil and gas production and gas processing, transmission, and storage facilities. While primarily aimed at reducing smog-forming and toxic air pollutants, known as Volatile Organic Compounds or VOCs, the rules also had the indirect effect of reducing methane emissions, and the proposed rule in August 2015 would have these rules apply directly to methane as well. These rules include the requirement to use "green completions" at natural gas wells to limit emissions from hydraulic fracturing, a rapidly growing means of drilling and production. In a “green completion,” special equipment separates hydrocarbons from the used hydraulic fracturing fluid, or “flowback,” that comes back up from the well as it is being prepared for production. This step allows for the collection (and sale or use) of methane that may be mixed with the flowback and would otherwise be released to the atmosphere. Because the same technologies in place to reduce VOC emissions would also be used to reduce methane, no additional steps are necessary to reduce methane.

In its January 2015 announcement, EPA said it will develop new guidelines to assist states in reducing VOCs from existing oil and gas systems in areas that do not meet the ozone health standard and in states in the Ozone Transport Region. Like the earlier NSPS, these guidelines will also reduce methane emissions.

The proposed regulation of August 2015 will extend emission reductions further downstream from the 2012 rules and cover certaun equipment used in the natural gas transmission sector in addition to equipment covered by regulation in 2012.

What other non-regulatory steps has the administration announced it will take?

The president will request $15 million for the Department of Energy (DOE) to develop and demonstrate more cost-effective technologies to detect and reduce losses from natural gas transmission and distribution systems, including leaks repairs and developing next-generation compressors. The president’s budget will also propose $10 million to launch a program at DOE to enhance the quantification of emissions from natural gas infrastructure for inclusion in the national Greenhouse Gas Inventory in coordination with EPA. Congress must appropriate funding for these programs for them to be implemented. DOE will also be responsible for other recommendations to reduce emissions from the natural gas system.

Q&A: EPA's Federal Implementation Plan

Q&A: EPA's Federal Implementation Plan

On August 3, 2015 as part of the Clean Power Plan release, the Environmental Protection Agency (EPA) issued a proposed federal plan. The agency is currently soliciting comments on the proposal and intends to issue a final federal plan by summer 2016.

What is a federal implementation plan and when is it used?

The Clean Air Act offer states the opportunity to implement national pollution control programs, including the Clean Power Plan. There is every reason for a state to develop its own plan that takes into account its own unique circumstances, and most states choose to develop and implement programs based on that knowledge. Most states are likely to develop their own program to comply with the Clean Power Plan.

EPA assists state efforts by providing technical and policy guidance. EPA must also review and approve state plans to ensure that they comply with the Act. If a state fails to adopt and implement an adequate plan, EPA is required to issue and enforce a federal implementation plan. States may also choose to adopt the federal plan as an alternative to developing their own plan. However, if a federal plan is implemented in a state, the state may still, at a later date submit a plan to replace the federal plan either in whole or in part. States may take over the administrative and enforcement aspects of a federal plan rather than leaving it to EPA.

What is included in the federal plan?

EPA is proposing two federal plans with different approaches – a rate-based approach and a mass-based approach. These two federal plans can be enforced in states that fail to adopt or implement an adequate plan. These two federal plans may also be considered as model rules which states can adopt or tailor for implementation as a state plan.

How does the federal plan encourage market-based solutions?

The federal plans offers two market-based programs to achieve cost-effective emissions reductions. These may be adopted in part or in whole by states or used as a model for states to design their own plans.

In the rate-based program, units must meet an emission standard or acquire a sufficient number of emission rate credits (ERCs), each representing a zero-emitting megawatt-hour, to bring their rate of emissions into compliance. ERCs can be generated by units not covered directly by this rule, and they can be bought, sold, or banked for later years.

For a mass-based program, EPA would create a state emissions budget equal to the total tons of CO2 allowed to be emitted by the affected units in each state, consistent with the state targets. EPA would initially distribute the allowances within each state budget – less three proposed allowance set-asides – to the affected units based on their historical generation. Allowances may then be transferred, bought, sold, or banked for future use. The compliance obligation on each of the affected unit is to surrender the number of allowances sufficient to cover the unit’s respective emissions at the end of a given compliance period.

The federal plan will also facilitate interstate trading as well as international trading with Canadian and Mexican units that are connected to U.S. electric grid. EPA intends to set up and administer a program to track trading programs – both rate-based and mass-based – that will be available for all states that choose it. EPA proposes that affected units in any state covered by a federal plan could trade compliance instruments with affected units in any other state covered by a federal plan or a state plan meeting the conditions for linkage to the federal plan.

Proper evaluation, measurement, and verification procedures are important to ensure emissions reductions are actually achieved in a trading program. EPA must approve any such procedures and has also offered model procedures to verify that any credits in a state-based trading regime are compliant with federal requirements. States may choose to incorporate these procedures into the state plan to assure approval by EPA.

Will states be penalized for using the federal plan?

No. States will not be penalized for using all or part of a federal plan. The stringency of the proposed federal plan for each state will be the same as required if states were to write their own plan.

 

EPA's Clean Power Plan puts states in the driver's seat

The finalization today of EPA’s Clean Power Plan offers Americans a clear, realistic roadmap for addressing planet-warming emissions that threaten the environment and the U.S. economy.

Most importantly, it puts states in the driver’s seat to devise innovative strategies to reduce emissions efficiently and cost-effectively. Now it's time for states to work together with businesses and cities to craft the approaches that work best for them.

Climate change is a critical challenge, and the impacts will only grow more costly if we fail to act. Last year was the warmest on Earth since we started keeping records over a century ago. During the first half of this year, it got even hotter. Climate change impacts include more extreme heat, which can exacerbate drought and wildfires, more frequent and intense downpours that can lead to destructive floods, and rising sea levels that threaten coastal cities.

Many cities, states, and companies recognize climate risks. And many are taking steps to reduce greenhouse gas emissions.

New federal standards are already reducing heat-trapping emissions from the second-biggest source, transportation, by increasing the fuel economy of cars and trucks. The Clean Power Plan takes the next logical step by addressing the largest source: the electric power sector, responsible for nearly 40 percent of U.S. carbon dioxide emissions.

Q&A: EPA Regulation of Greenhouse Gas Emissions from Existing Power Plants

On August 3, 2015, the U.S. Environmental Protection Agency (EPA) finalized its proposed Carbon Pollution Standards for Existing Power Plants (known as the Clean Power Plan), per its authority under Section 111(d) of the Clean Air Act (CAA). The development of this rule was announced by President Obama during his June 25, 2013, climate policy speech. The Clean Power Plan establishes different target emission rates for each state due to regional variations in generation mix and electricity consumption. Overall, however, it is projected to achieve a 32 percent cut in power sector emissions by 2030 from 2005 levels,

See more resources and maps at the C2ES Carbon Pollution Standards Resource Page.

Why is EPA regulating carbon dioxide?

It is important to note that this action is not voluntary on the part of EPA. According to the Supreme Court in Massachusetts v. EPA (a decision that was reaffirmed), EPA is legally required to regulate greenhouse gases under the Clean Air Act if it finds them to endanger public health and welfare, just as EPA has addressed more traditional pollutants for the past 43 years. In 2010, EPA settled a suit with several states and environmental groups by agreeing to finalize greenhouse gas standards for existing power plants by May 26, 2012.

In June 2013, President Obama directed EPA to work closely with states, power plant operators, and other stakeholders as it finalized its guidelines and EPA released its proposed rule in June 2014.

What is in EPA’s Clean Power Plan?

The Clean Power Plan sets different target emission rates for each state due to regional variations in generation mix and electricity consumption, but overall is projected to achieve a 32 percent cut in power sector emissions by 2030 from 2005 levels.

Typically, EPA regulations are set at the federal level and then administered by states. For example, EPA sets a limit on the level of smog in the atmosphere, and states then submit plans for how they will meet that standard. Once approved by EPA, states then administer these plans, known as State Implementation Plans.

The Clean Power Plan is similar in that states have a unique target emissions rate, but have broad flexibility to determine how to achieve that target. Each state was assigned a carbon emissions baseline based on its level of carbon emissions from fossil-fired power plants divided by its total electricity generation. (See our Proposed State Emission Rate Targets Map.) Electricity generation in this case includes fossil generation, nuclear, renewables, plus generation avoided through the use of energy efficiency programs. A target for 2030 was set for each state based on its capacity to achieve reductions using the following three “building blocks” identified by EPA:

  1. Make affected fossil fuel power plants more efficient.
  2. Substitute increased generation from lower-emitting natural gas combined cycle plants for reduced generation from higher emitting affected generating units.
  3. Substitute increased generation from new zero-emitting renewable power sources.

Each state can meet its established target however it sees fit and does not need to leverage each building block to the extent that EPA projects.

State plans can include market-based mechanisms, such as averaging or trading. States can convert their target emission rate (pounds CO2 per megawatt-hour of electricity generated) to a mass-based standard (tons of CO2 emission per year) to enable a cap-and-trade program, a carbon tax or any other mix of market-based mechanisms.

States also have the option of complying as an individual state or as a group of states. States have long collaborated to achieve energy and environmental goals (e.g., through the sulfur dioxide trading program). The Clean Power Plan provides an opportunity to expand on these efforts. A multi-state approach could be similar to the Regional Greenhouse Gas Initiative (RGGI) in that it would regulate carbon dioxide emissions from power plants across multiple states. This could also be accomplished through another existing authority such as a local Regional Transmission Organization (RTO) or Independent System Operator (ISO). Alternatively, states sharing common plan elements could allow trading across state lines even though the programs are not formally linked.

What are the big differences between the proposed and final plans?

States will get more time to submit a plan – they can get an extension to 2018 – and an extra two years – until 2022 -- to begin phasing in pollution cuts. C2ES and others argued for more time to encourage states to take a longer view on planning and investment for a cleaner energy future.

Along with the Clean Power Plan, the administration proposed a voluntary Clean Energy Incentive Program to encourage the installation of renewable energy projects and energy efficiency programs for low-income communities before the 2022 compliance date. It will also encourage states to submit plans early.

Market-based mechanisms are more explicitly encouraged in the final rule. The proposed federal implementation plan includes an option for states to join an interstate cap-and-trade program. It also would allow states to make “trading ready” plans to participate in emission credit trading without the creation of interstate compacts.

What are the costs vs the benefits?

The Clean Power Plan is projected to provide $34 - $54 billion in total benefits ($14 - $34 billion are for U.S. health and $20 billion is for the benefit of the global climate). Compliance costs to implement the plan range from $5.1 to $8.4 billion.

By encouraging energy efficiency, the rule could reduce electricity consumption, especially with regard to the business-as-usual forecast. A homeowner’s electricity bill could stay the same or even decrease.

The incentive program specifically targets helping low-income communities become more energy efficient.

C2ES examined six economic modeling studies on the proposed plan. The majority of them projected that consumers would save money or pay less than $87 per household per year -- about 25 cents a day.

We also can’t forget to factor in the costs of inaction. Adapting to the impacts of unmitigated climate change would be much more expensive than reducing our reliance on fossil fuels.

What can power plants do to reduce emissions?

An individual power plant could reduce its greenhouse gas emission rate by using fuel more efficiently or by switching to a lower carbon fuel, such as natural gas or biomass instead of coal. However, states will implement this rule on a statewide basis using any number of emission reduction options. As long as states met carbon dioxide targets broadly, action would not necessarily be required at particular power plants. States could meet their emissions targets by increasing their consumption of renewable electricity relative to fossil-generated electricity or improving energy efficiency. Options to reduce carbon dioxide emissions in the power sector are illustrated in Figure 1.

Figure 1: Opportunities to reduce carbon dioxide emissions in the power sector

What happens next?

States will have up to two years to submit their proposed implementations plans to EPA. After a plan is submitted, EPA will have a year to either approve plans or send them back to states for revision. If a state does not submit an adequate plan, EPA is authorized to impose a federal plan to drive the necessary reductions.

How was each state’s target calculated?

EPA changed the way it calculated each state target from the proposed plan to the final one.

Unlike the proposal, the amount of energy efficiency a state could achieve, which would reduce electricity demand, was not considered for state target setting. However, the EPA has stated that it will provide ample latitude to use energy efficiency programs for compliance.

EPA also changed its methodology with regard to the determination of incremental renewable energy by making it more reflective of regional technical potential, rather than based on state-level renewables policies as had been the case in the proposal.

“At-risk” nuclear power from existing plants and new generation from plants currently under construction were not used for calculating states’ emission rates targets. Tennessee, Georgia, and South Carolina, which have five units under construction, are now able to use this generation for compliance.

In its final rule (Clean Power Plan) to reduce carbon dioxide emissions in the power sector, EPA has set a unique target emissions rate for each state to achieve by 2030. Targets are based on the “best system of emission reduction” (BSER), which use three “building blocks” or potential pathways to cost-effectively and efficiently reduce CO2 emissions:

  1. Make coal-fired power plants more efficient;
  2. Shift generation from existing fossil steam plants to existing natural gas combined cycle plants (NGCC) up to a maximum utilization of 75 percent; and
  3. Use more zero-emission renewable power, including onshore wind, utility-scale solar photovoltaic (PV) and concentrating solar power (CSP), geothermal and hydropower.

State Target Calculation Steps

To calculate a state’s target, EPA first determined a CO2 emissions baseline (using 2012 data) based on each state’s level of CO2 emissions from fossil-fired power plants divided by its total fossil-fired electricity generation (including coal steam plants, oil and natural gas steam plants and natural gas combined cycle plants). Next, the state level data was aggregated to the regional level (Eastern, Western and Texas Interconnections). Then, “emission performance rates” were established for years 2022-2030 for two subcategories of existing fossil-fired power plants (1) fossil steam (generally, coal-fired plants), and (2) natural gas combined cycle units, based on the capacity of each region to achieve reductions using the identified building blocks.

Finally, state target emission rates (pounds of CO2 per megawatt-hour of electricity generated) were calculated based on a weighted average of the states’ baseline fossil fuel mix (percentage of fossil steam and natural gas combined cycle plant generation) and the two emission performance rates (see sample calculation below).

In 2030, the emission performance rate for all fossil steam plants was determined to be 1,305 lb CO2/MWh, and the emission performance rate for all natural gas combined cycle plants was calculated to be 771 lb CO2/MWh. All state target emission rates in 2030 fall between these two values.

How much flexibility will states have to minimize costs?

States have considerable flexibility to adopt a variety of approaches to reduce carbon dioxide emissions from the power sector, as long as they demonstrate they will achieve the emissions target.

Among the possibilities:

  • States could allow emissions credit trading among power plants owned by the same operator. This means that if one power plant reduced its emission rate below the state target, it could trade credits to a power plant that could not meet the target so that the company overall would be in compliance.
  • States could allow emissions trading between power companies and even across state lines (such a program would be similar to the Regional Greenhouse Gas Initiative). Averaging or trading across power plants, companies, and states cut overall compliance costs by taking advantage of the lowest-cost opportunity for emissions reductions.
  • States could use energy efficiency or renewable energy for compliance, provided that the total emissions met an EPA-approved target.
  • States could also set a standard that is more stringent than what would be required by EPA's guidelines.

What is the Clean Energy Incentive Program?

The Clean Energy Incentive Program (CEIP) is an optional program for states designed to reward early investment in wind and solar generation broadly, as well as demand-side energy efficiency (EE) in historically underserved low-income communities.

To establish participation in the CEIP, states must submit their final plans. New projects generating (MWh) or saving (MWh) energy in 2020 and/or 2021 are eligible to receive allowances or emission rate credits from the EPA. These credits will contribute to state compliance during the compliance period beginning in 2022.

For more details on the program, see the EPA factsheet.

How will existing state policies, such as the Regional Greenhouse Gas Initiative, be affected?

States have significant flexibility in setting regulations for existing power plants within their borders, but are required to follow the broad limits in EPA’s proposed rule. Since states have been given the authority to use market-based mechanisms, California and the nine Northeast states participating in the Regional Greenhouse Gas Initiative (RGGI) could demonstrate that their cap-and-trade programs satsify the required emission reductions, and that further regulation is therefore unnecessary. Policy measures that states might employ to achieve their carbon targets are listed in Table 1.

Table 1: Policy options to reduce power sector carbon dioxide emissions

PolicyDescriptionExamples
Power plant performance standardEach power plant must achieve a set emissions intensityCalifornia, New York, Washington
Renewable Portfolio StandardUtilities must deliver a set percentage of renewable electricityColorado, Hawaii, Kansas, Missouri, Nevada, Rhode Island, and others
Energy Efficiency Resource StandardUtilities must cut demand by a set amount by target yearsArizona, Connecticut, Maryland, Minnesota, Texas, and others
DecouplingReduce utility incentive to deliver more electricity by decoupling revenue and profitCalifornia, Idaho, Massachusetts, Michigan, Oregon, and others
Net MeteringEncourage residential solar by paying homeowners to put excess electricity back on gridArkansas, Colorado, Georgia, Louisiana, and others
Cap & TradeIssue a declining number of carbon allowances, which must be surrendered in proportion to each plant’s emissionsCalifornia, Regional Greenhouse Gas Initiative
Carbon TaxCharge a tax for emitting carbonBritish Columbia
Grid Operator Carbon FeeAdd a carbon price to grid operator decision over which power plants to runNone currently
Appliance Efficiency StandardsRequire new appliances sold to meet set electricity consumption standardsCalifornia, Florida, New Jersey, and others
Commercial & Residential Building CodesRequire new buildings to include electricity saving measuresCalifornia, Illinois, Maryland, Mississippi, and others

With the interim targets extended, can the United States still meet its emissions reduction goals, especially the one for Paris?

The Clean Power Plan is an important piece of the puzzle to reduce emissions, but it’s not the only one. The federal government is also taking action on transportation, methane and other sources of emissions.

The changes made to the proposal put it on a better footing to withstand legal challenges.

Incentivizing early action on deploying renewables sets us up for deeper decarbonization in the future.

C2ES estimated measures already adopted or proposed will reduce emissions up to 23 percent below 2005 levels. So more will be needed to achieve the 2025 target of 26-28 percent that the U.S. made to the Paris talks.

The power plant rule is the most concrete measure of U.S. willingness to act and lead. It will make it tougher for others to hold back and will strengthen the odds of a decent global deal next year in Paris.

Will the Clean Power Plan affect the reliability of the electric grid?

  • The final plan adds a “reliability safety valve” that would make sure that the plan doesn’t undermine the reliability. States will also be required to address reliability in their state plans. This change was made in response to concerns raised by the proposal.
  • States will have up to three years from today to craft plans and 7 years before interim targets have to be met. That’s plenty of time for state regulators and reliability entities to work with utilities and other key stakeholders.
  • The greater threat to reliability is the rising incidence of extreme weather driven by climate change. By beginning to reduce emissions today, we can lessen the effects climate change will have on the power system tomorrow.

Why is regulation of greenhouse gas emissions from existing power plants important?

Electric power generation is the single largest source of carbon dioxide emissions in the United States. In 2013, electric power generation accounted for nearly 40 percent of U.S. carbon dioxide emissions (see Figure 1).

Figure 2: 2013 U.S. CO2 Emissions

Source: Energy Information Administration

Since the federal government adopted new vehicle efficiency standards to address transportation emissions through 2025, the power sector represents the greatest opportunity for greenhouse gas reductions.

Figure 3: Electric Power Sector Carbon Dioxide Emissions without Proposed Emission Standards

Source: Energy Information Administration

Power sector emissions have declined over the past five years in part due to the economic downturn, increased energy efficiency, greater use of renewable energy and a switch from coal, the most carbon-intensive fossil fuel, to natural gas, which emit about half as much carbon when combusted. In the absence of any policy changes, the U.S. Energy Information Administration projects that as the economy grows and natural gas prices rise slowly over the next five years, emissions will rise. The Clean Power Plan will have to push against these underlying trends.

Figure 4: Distribution of Fossil Fuel Power Plants across the Contiguous United States

Source: Energy Information Administration

Additional resources can be found on the C2ES Carbon Pollution Standards Resource Page.

/publications/achieving-united-states-intended-nationally-determined-contribution

Carbon Pollution Standards

Carbon Pollution Standards

The U.S. Environmental Protection Agency (EPA) issued final rules in August 2015 to limit carbon pollution from existing and new power plants. Electric power generation accounts for 40 percent of U.S. carbon emissions, making it the largest source. 

Reducing power sector emissions is a key part of President Obama’s Climate Action Plan, which aims to reduce overall U.S. greenhouse gas emissions 17 percent below 2005 levels by 2020. In addition, the U.S. contribution to the upcoming international climate agreement in Paris sets an economy-wide target of reducing greenhouse gas emissions by 26-28 percent below 2005 levels by 2025.

Under the Clean Power Plan for existing power plants, each state has its own target (due to regional variation in generation mix and electricity consumption). Overall, the rule is designed to cut emissions 32 percent from 2005 emission levels by 2030.

EPA's “Carbon Pollution Standard for New Power Plants” finalizes a standard first proposed in March 2012 that was modified and proposed again in September 2013. States would apply the standards for new coal- and natural gas-fired plants (measured as tons of greenhouse gas emissions per megawatt-hour of elec­tricity produced) at each regulated plant.

Explore the issues and options involved in reducing carbon pollution from power plants through the following resources:

C2ES Resources

Additional Resources

 

Bob Perciasepe's Statement on Clean Power Plan

Statement of Bob Perciasepe
President, Center for Climate and Energy Solutions

August 2, 2015

On the release Monday of the final Clean Power Plan to reduce U.S. power plant emissions.

The administration is doing what science and the law demand, and it’s now up to the states. The smart ones will see this as an opportunity, not a threat – a chance to modernize their economies and energy infrastructure.

I know from my conversations with state leaders and utility CEOs that even those who may openly oppose the rules are thinking hard about how to meet them. And many are very interested in the types of incentive and market-based approaches EPA is encouraging. It behooves every state to sit down with stakeholders – mayors, consumers, businesses – and craft a plan that fits it best. States should take advantage of the opportunity to innovate and make their economies stronger and more sustainable.

The final plan will give states the time needed to craft strong plans and achieve interim targets, provide incentives to increase renewable power and help low-income communities improve energy efficiency, and encourage cost-effective, market-based approaches to reducing emissions.

Many states and businesses are already taking action and demonstrating leadership. Years from now I’m sure we’ll see this as a pivotal moment accelerating the clean energy transition that is already underway.

We’re coming to grips with the rising risks of climate change and laying the foundation for a low-carbon future. The quicker states put their heads together with utilities, businesses, and cities to figure out the smartest approaches, the sooner we’ll get there.

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To talk to a C2ES expert, contact: Laura Rehrmann, rehrmannl@c2es.org or 703-516-0621.

About C2ES: The Center for Climate and Energy Solutions (C2ES) is an independent, nonprofit, nonpartisan organization promoting strong policy and action to address our climate and energy challenges. Learn more at www.c2es.org.

Bob Perciasepe's Statement on Business Act on Climate Pledge

Statement of Bob Perciasepe
President, Center for Climate and Energy Solutions

July 27, 2015

On the White House announcement of business leaders committing to climate action and supporting efforts to reach a global climate agreement in December in Paris.

We applaud the companies that have come forward to pledge action to reduce heat-trapping emissions, increase clean energy investments, improve efficiency, and support efforts to reach a global climate agreement this year in Paris.

Climate change is posing rising environmental, social, economic, and security risks. Delayed action only means greater costs.

Business leaders get it. They see climate risks firsthand -- in damaged facilities, interrupted power and water supplies, disrupted supply and distribution chains, and impacts on their employees’ lives.

And the business community will be essential to mobilizing the technology, investment and innovation needed to transition to a low-carbon economy.      

Several of the companies making pledges today – Alcoa, Bank of America, and General Motors – are members of the C2ES Business Environmental Leadership Council that is committed to climate action.

Although businesses, cities, states and nations are working toward a more sustainable future, it will take a global effort to address a global threat. Paris is our best opportunity to get all the major economies on board a lasting agreement that strengthens the global effort and works to strengthen it over time.

Many nations, including the United States, China, and the European Union, have already announced their goals for reducing greenhouse gases. But the strength of any agreement will rest on the parties’ political will to implement it.

The strong support of business leaders for climate action, like that exhibited today, can only help to strengthen that will.

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To talk to a C2ES expert about business engagement on climate change, contact: Laura Rehrmann, rehrmannl@c2es.org or 703-516-0621

About C2ES: The Center for Climate and Energy Solutions (C2ES) is an independent, nonprofit, nonpartisan organization promoting strong policy and action to address our climate and energy challenges. Learn more at www.c2es.org.

How Canada and the U.S. can lead together on climate change

June 27, 2015
The (Toronto) Globe and Mail
Op-Ed by Janet Peace

With fossil fuel production going strong on both sides of the border, Canada and the United States face similar challenges in balancing energy and economic priorities with the urgent need to reduce climate-altering greenhouse gas emissions.

By sharing solutions, many of which are rising up from the state and provincial level, both countries have the opportunity to not only craft a national approach, but also show real leadership as we work toward a new global climate agreement later this year in Paris.

At one time, governments in both countries sought to contain greenhouse gas emissions by enacting economy-wide cap-and-trade programs. But neither materialized, and the national targets the two have announced ahead of Paris rely heavily on subnational policies.

While U.S. emissions generally have been trending downward, as lower-priced natural gas has displaced coal in power production, steeper reductions require mandatory limits on power plant emissions, as President Barack Obama’s administration has proposed. But implementation of the administration’s Clean Power Plan will fall largely to the states.

In Canada, meanwhile, emissions are rising and oil sands-related emissions could double over the next decade if development continues at projected rates. Similarly, getting a handle on Canadian emissions will be largely a provincial matter – resting heavily, in this case, with the new Alberta government.

One of the great virtues of promoting climate action at the subnational level is that it allows for policy experimentation and innovation. Both countries should draw on these lessons as they move toward economy-wide approaches that can achieve greater emission reductions at lower cost. And they should work to better align their respective efforts.

Here are some specific ideas:

First, as more states and provinces turn to carbon pricing to curb emissions, we should forge stronger links among those systems. Ten U.S. states have carbon trading programs. Others may soon follow suit as they look for promising paths to meet their Clean Power Plan emissions reduction targets.

Quebec’s cap-and-trade program is already linked with California’s, and Ontario will soon join them. British Columbia has a carbon tax and Alberta just announced it is extending its carbon-intensity-based pricing system. By setting a clear timeline for a gradual price rice, Alberta is signalling that the value of taking action will increase over time.

Second, the two countries should co-operate on reducing emissions from growing oil and natural gas production. Mr. Obama’s administration is expected to propose a mix of regulatory and voluntary strategies to reduce methane emissions from the oil and gas sector. It’s essential that the United States and Canada set the right example for other major energy producers around the world.

Third, both should strengthen and more closely co-ordinate efforts to develop and deploy carbon capture and storage (CCS) technologies. Even with dramatic increases in renewable power, the world will continue to rely on coal and natural gas to generate electricity, making CCS key to any plausible strategy to reduce global emissions.

Canada has established itself as a leader with the world’s first commercial-scale, coal-fired power plant with CCS – Boundary Dam in Saskatchewan. The United States is working on its first CCS power plant in Kemper County, Miss. But the first two examples of any new technology are going to be expensive, and we’ll need greater support for CCS to build more commercial scale projects and drive costs down. Alberta has been a strong supporter of CCS. Now is the time to continue and even step up that investment.

Fourth, Canada’s abundant hydro resources can be a boon for both countries. The U.S. and Canadian electricity grids are linked through dozens of connections and more than a dozen states already import a significant amount of Canadian hydro. A recent C2ES study found that importing hydro from even a modestly sized new Canadian project (250 megawatts) could help states reduce power sector emissions. For example, California, Massachusetts and Washington state could each get about a third of the way toward their proposed Clean Power Plan targets.

Canada and the United States are blessed with abundant resources and vibrant economies. Both have the opportunity to show global leadership in dramatically reducing the emissions that are warming our planet and risking our environment and our economies. With the right mix of national and subnational policies, and by working together, the two countries can enjoy strong, sustainable growth while fulfilling the commitments they make in Paris.

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Janet Peace is senior vice-president of policy and business strategy at the Center for Climate and Energy Solutions (C2ES). She is also a member of the Council of Canadian Academies on oil sands environmental technologies.

Read the original article on the Globe and Mail website.

C2ES issues status report on Obama Climate Action Plan Progress

Press Release
June 23, 2015
Contact: Laura Rehrmann, rehrmannl@c2es.org, 703-516-0621

C2ES issues status report on Obama Climate Action Plan progress

WASHINGTON – Two years after President Obama announced his Climate Action Plan, the administration has made notable progress in all areas, according to a new Center for Climate and Energy Solutions (C2ES) status report on the plan’s implementation.

There has been at least initial action on each of the 75 goals outlined in the plan, according to the C2ES status report.

The Environmental Protection Agency (EPA) is expected to finalize rules this summer to limit carbon pollution from the No. 1 source – power plants. As for emissions from the second largest source, transportation, new fuel economy standards are in place for cars and light trucks and are in the works for heavy-duty trucks built after model year 2018.

Other notable areas of progress include:

  • New energy efficiency standards
  • Actions to reduce methane and hydrofluorocarbon (HFC) emissions
  • The release of climate adaptation plans by 38 federal agencies and a Climate Resilience Toolkit for the public,
  • A joint announcement with China on new greenhouse gas targets.

Areas where there has been only initial progress include increasing the climate resilience of federal buildings and infrastructure.

“The administration is making good progress, and cities, states and businesses are all taking stronger climate action” said C2ES President Bob Perciasepe. “But achieving some of the plan’s goals will require sustained efforts beyond the president’s time in office. We’ll need continued federal leadership to reduce the emissions causing climate change and prepare for climate impacts.”

The plan, announced June 25, 2013, outlines goals in three areas: cutting U.S. greenhouse gas emissions, preparing for the impacts of climate change, and leading international efforts to address climate change. With Congress unlikely to enact major climate legislation in the near term, the Climate Action Plan relies almost entirely on steps the administration can take under existing laws.

Read the status report at: http://bit.ly/CAP2ndYear

To speak to a C2ES expert about progress toward climate goals, contact Laura Rehrmann at rehrmannl@c2es.org.

About C2ES
The Center for Climate and Energy Solutions (C2ES) is an independent nonprofit, nonpartisan organization promoting strong policy and action to address the challenges of energy and climate change. Learn more at www.c2es.org.

Climate Action Plan making progress on all fronts

Two years after President Obama announced his Climate Action Plan, the administration has taken at least initial steps on all 75 of its goals, according to a new C2ES status report.

The Climate Action Plan aims to reduce overall U.S. greenhouse gas emissions 17 percent below 2005 levels by 2020. While some steps in the plan are simple and within existing policies and programs, achieving some of the plan’s goals will require a transformation of the U.S. energy system over a period that will outlast President Obama’s time in office.

Federal and state measures beyond those in the plan will be needed to achieve the U.S. pledge to achieve a 26 to 28 percent reduction in U.S. emissions by 2025 as part of the effort to reach an international climate agreement.

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