Biden Administration Says Clean Energy is the Most Cost-Effective Solution

Expect new limits on coal ash and ozone pollution from the EPA to continue the push toward the transition from fossil fuel-powered energy generation to clean energy.

The Agency continues to explore other options for decarbonization as the Biden administration pushes to achieve the president’s stated campaign goals of achieving net-zero emissions by 2035.

“We want to present the industry with a suite of regulations so that they can make the best long-term investments possible,” EPA Administrator Michael Regan said, according to Reuters. “The power sector will…look at the cost benefit of complying with those and more than likely stay with the conclusion that…clean energy is more cost effective for them and for their customers.”

The announcement comes on the heels of the Supreme Court decision that severely limited the EPA’s authority to enforce broad climate regulations.

“Will [the Supreme Court decision] constrain what we could do and the flexibilities that we could allow the power sector to have? Absolutely,” Regan added. “But are we deterred? Absolutely not. EPA is still in the game.”

Regan characterized the Supreme Court decision in West Virginia v. EPA as being “out of step” with public demand for climate change actions.

“We knew that with the makeup of this court, we weren’t going to get a favorable decision and so from day one, the Biden administration has been working on solutions for designing regulations for power plants,” he continued.

Greenhouse gas (GHG) emissions come from burning fossil fuels. According to EPA 2020 data, primary sources of U.S. GHG emissions are:

• 27% from transportation—cars, trucks, ships, trains, and planes;
• 25% from electricity production, with 60% of electricity produced by burning fossil fuels;
• 24% from industry, from burning fossil fuels for energy, and from chemical reactions to produce goods;
• 13% from commercial and residential, from burning fossil fuels for heat using products containing GHGs, and from the handling of waste; and
• 11% from agriculture and from livestock, soils, and rice production.

The United States is second only to China worldwide in the nation’s GHG emissions.

To achieve Biden’s zero-emissions goals, the administration is striving to put regulations in place across all sectors that contribute to GHGs.

Reducing transportation GHGs

As the largest source of GHG emissions, the administration has initiated multiple regulations to reduce emissions in this sector, including:

• Issuing a final rule lowering GHG emissions standards for passenger cars and light trucks through model year 2026.
• The U.S. Department of Transportation’s National Highway Traffic Safety Administration (NHTSA) announced new fuel economy standards in April 2022 that will increase fuel efficiency 8% annually for model years 2024–2025 and 10% annually for model year 2026. It will also increase the estimated fleetwide average by nearly 10 miles per gallon for model year 2026 relative to model year 2021.
• Executive Order (EO) 14037, Strengthening American Leadership in Clean Cars and Trucks, set a nonbinding target to make 50% of passenger cars and light-duty trucks zero-emission vehicles by 2030. It also directed the EPA and the NHTSA to develop standards for fuel economy and GHG emissions for medium- and heavy-duty vehicles—to be finalized by December 2022.
• On July 7, 2022, the Federal Highway Administration (FHWA) announced a notice of proposed rulemaking for states and municipalities to track and reduce GHG emissions.
• Earlier this year, the EPA reinstated California’s waiver that allows the state to implement its own GHG emissions standards and zero-emission vehicle sales mandate for model years 2017–2025. Several other states typically adopt California’s tougher emissions standards.
• Although the rule was widely criticized, last year, the EPA finalized regulations applying to GHG emissions standards that apply to certain new commercial airplanes, including all large passenger jets. These standards match the international airplane carbon dioxide (CO₂) standards adopted by the International Civil Aviation Organization (ICAO) in 2017.

Reducing electricity generation GHGs

The Obama administration was openly characterized as attempting to regulate the fossil fuel industry into extinction. During that time, there was a push for renewable energy generation and energy efficiency. The industry converted many plants to natural gas fuel and added advanced technological features such as combined-cycle turbines and carbon sequestration.

While the Supreme Court decision in the West Virginia case was a setback in the Agency’s enacting broad regulations to push energy producers into more quickly transitioning to clean energy production, the Agency still has several tools in its arsenal to reduce GHG emissions in this sector.

The ruling only expressly forbids the type of generation-shifting regulations proposed under Section 111 of the Clean Air Act (CAA) under the Clean Power Plan.

Section 115 provides the EPA the authority to regulate domestic pollution harming the welfare of other countries. And, the EPA has ample authority to “set stringent standards based on pollution control technologies such as carbon scrubbers and gas, hydrogen co-firing, and heat rate improvements,” Clean Air Task Force Attorney Jay Duffy said in a statement, according to Bloomberg Law.

In January, the Biden administration announced its decision to begin enforcing coal ash regulations, which require approximately 500 unlined coal ash waste ponds to stop receiving waste and begin closing by April 2021. At that time, the Agency had received 57 applications for extensions on the closure deadlines.  Four of those were incomplete, and 1 was marked as ineligible for an extension. It initially proposed denying 3 extensions and granting a conditional extension on 1 of the applications. 

This was a clear signal that this administration will ensure coal ash impoundments meet strong environmental and safety standards.

However, these regulations only apply to new and existing sites, leaving environmentalists concerned about the environmental impact from previously closed sites.

The Agency has also indicated it will further restrict other pollutants from coal-burning power plants, such as mercury, soot, and nitrous oxides.

Other regulations aimed at reducing GHGs from electricity generators include:

• In March 2022, the EPA presented a proposed strengthened “good neighbor” plan that includes electric generating units in 25 states. The rule proposes limits on nitrogen oxide (NOx) pollution from power plants, including daily emissions rate limits on large coal-fired units to promote more consistent operation and optimization of emissions controls, limits on “banking” of allowances, and annual updates to the emissions budgets starting in 2025 to account for changes in the generating fleet.
• Under the CAA, the National Ambient Air Quality Standards (NAAQS) are required to be updated every 5 years. The EPA has indicated more stringent regulations are to be expected in the future. The NAAQS covers six pollutants:
  • Carbon monoxide (CO)
  • Lead (Pb)
  • Particulate matter (PM)
  • Ozone (O₃)
  • Nitrogen dioxide (NO₂)
  • Sulfur dioxide (SO₂)
• The Mercury and Air Toxic Standards (MATS) limits emissions of mercury from coal- and oil-fired power plants. To date, many operators of remaining coal-fired plants have chosen to install control technologies that reduce emissions. In January 2022, the EPA proposed an action to revoke a 2020 finding that it is not appropriate and necessary to regulate coal- and oil-fired power plants under CAA Section 112.

Additionally, past regulatory activities and market factors have resulted in the energy industry’s being incentivized to transition to cleaner energy alternatives such as natural gas and renewable energy sources.

Reducing industry GHGs

Industry emissions are divided into two categories: direct and indirect. Direct emissions are produced at the facility, and indirect emissions are produced by burning fossil fuels to power industrial facilities and equipment.

Options to reduce GHG emissions from industrial activities include:

• Upgrading to energy-efficient equipment. The federal government typically offers incentives for these types of upgrades.
• Switching to natural gas to fuel equipment instead of fossil fuels.
• Producing industrial products from materials that are recycled or renewable rather than producing new products from raw materials. For example, less GHGs are produced by using scrap steel and aluminum rather than smelting new aluminum or forging new steel.

Commercial and residential GHG reductions

Opportunities to reduce GHG emissions in this sector include:

• “Green building” techniques and retrofits can allow new and existing buildings to use less energy to accomplish the same functions.
• Energy-efficient appliances and electronics.
• Making water and wastewater systems more energy-efficient.
• Reducing solid waste sent to landfills through recycling and waste-reduction programs.
• Capturing and using methane produced in current landfills.
• Reducing leakage from air conditioning and refrigeration equipment.
• Using refrigerants with lower global warming potentials.

Agricultural GHG regulations

Proper crop, land, and livestock management techniques result in lower GHG emissions in this sector. Options include:

• Fertilizing crops with the appropriate amount of nitrogen required for optimal crop production, as over-application of nitrogen can lead to higher nitrous oxide emissions without enhancing crop production.
• Draining water from wetland rice soils during the growing season to reduce methane emissions.
• Improving pasture quality to increase animal productivity, which can reduce the amount of methane emitted per unit of animal product. Also, increased productivity in livestock can be introduced through improved breeding practices.
• Handling manure as a solid or depositing it on pasture rather than storing it in a liquid-based system such as a lagoon would likely reduce methane emissions but may increase nitrous oxide emissions.
• Storing manure in anaerobic lagoons to maximize methane production and then capturing the methane to use as an energy substitute for fossil fuels.

Land use and forestry regulations

Land areas can either be a source of GHGs or absorb CO₂ from the atmosphere by acting as sinks. Since 1990, the United States has found that managed forests and other land areas can act as net sinks in that they have absorbed more CO₂ from the atmosphere than they emitted.

Options to reduce GHG emissions in this sector include:

• Afforestation and minimizing the conversion of forest land to other land uses, such as settlements, croplands, or grasslands;
• Utilizing reduced tillage practices on cropland and improved grazing management practices on grassland; and
• Planting after natural or human-induced forest disturbances to accelerate vegetation growth and minimize soil carbon losses.

Congressional assist

At the end of July, after more than a year of negotiations, Senate Democrats finally reached an agreement on a deal that allocates almost $370 billion to climate and energy security.

In a joint statement issued about the policy package, the Inflation Reduction Act of 2022, Senate Majority Leader Chuck Schumer (D-NY) and Senator Joe Manchin (D-WV) stated, “The Inflation Reduction Act of 2022 will make a historic down payment on deficit reduction to fight inflation, invest in domestic energy production and manufacturing, and reduce carbon emissions by roughly 40 percent by 2030.”

The bill is expected to generate $737 billion through corporate minimum taxes, prescription drug cost savings, and improved Internal Revenue Service (IRS) tax enforcement.

“The proposal would invest $396 [billion] in energy security and fighting climate change, and $64 [billion] to bolster healthcare,” reports The Guardian. “Manchin also indicated that provisions to reform the permitting process for energy infrastructure, including gas pipelines, would be included in the deal.”

The bill places emphasis on tax credits to reduce costs and attract investments for industry to develop low carbon energy technologies.

Analysts believe the Inflation Reduction Act, if passed as expected, will bring the administration close to achieving its climate change goals.

“Jesse Jenkins, an energy modeler at Princeton University in New Jersey, who heads a consortium that is analyzing the legislation’s impacts, says the core energy and climate provisions have been preserved in the new agreement.  Modelling by his group suggests that the legislation could reduce U.S. emissions by the equivalent of nearly one billion tons of carbon dioxide per year by 2030, or two-thirds of the reduction needed to meet the US climate goal,” says Nature.

With the Biden administration’s “whole-of-government” approach to tackling clean energy solutions, it’s clear that all federal agencies are taking multiple actions to promote clean energy solutions, utilizing both carrots and sticks. Industry is advised to stay ahead of expensive layers of regulations and policy strategies by taking advantage of tax incentives to voluntarily reduce GHG emissions. 

While some may see temporary reprieves from costly litigation strategies to achieve delays in having to comply with federal regulations, the distinctive writing on the wall says that the United States will achieve significant GHG emissions reductions in the next few years one way or another.