The Biden administration has finalized rules to slash 90% of emissions from new natural gas-fired power plants, designed in part to encourage the use of more carbon capture and sequestration (CCS).
The U.S. Environmental Protection Agency (EPA) strengthened New Source Performance Standards (NSPS) for newly built gas-fired combustion turbines. Guidelines also were established to curb carbon dioxide (CO2) emissions from existing coal-fired, steam-generating units.
The rules are designed to reduce “pollution while ensuring that power companies can make smart investments and continue to deliver reliable electricity for all Americans,” said EPA administrator Michael S. Regan.
Overall power sector CO2 emissions since 2005 have declined by 36% because of the “ongoing trend away from carbon-intensive coal-fired generation and toward more natural gas-fired and renewable sources,” EPA said. Over that time, CO2 emissions from gas power plants have “almost doubled.”
EPA is forecasting natural gas-fired generation will continue to increase by about 34 GW by 2035, and by 261 GW by 2050.
More CCS
Gas-fired facilities that began construction as of May 2023, which would support baseload electric generation, are required to use “highly efficient generation” immediately, according to the rule. By 2032, those facilities also should have deployed CCS technology to catch 90% of the carbon emissions.
While regulations for existing gas-fired generators were expected to be included in the final rules, EPA shelved a final decision for those facilities. EPA said it would “issue a new, more comprehensive proposal to regulate GHGs from existing sources. The new proposal will focus on achieving greater emission reductions from existing stationary combustion turbines...”
Additional rules are expected if President Biden is reelected, according to analysts with ClearView Energy Partners LLC. Separate rulemakings could “tighten applicable standards for all existing natural gas units as part of its legacy to deliver on climate policy.”
The rules highlighted CCS as the “best system for emissions reduction for existing coal-fired…and new natural gas-fired” combustion turbines in light of a declining cost for the technology and federal incentives.
EPA noted that the Infrastructure Investment and Jobs Act of 2021 and Inflation Reduction Act of 2022 would encourage CCS because of tax incentives.
Further up the natural gas supply chain, oilfield services companies such as SLB Ltd., and producers including ExxonMobil, Occidental Petroleum Corp. and TotalEnergies SE, have increasingly invested in the technology.
Energy Trade Groups React
The final rules drew criticism from two major energy trade groups.
The U.S. Chamber of Commerce’s Marty Durbin, senior vice president (SVP) of Policy, said the members were “increasingly concerned with the administration’s contradictory approach to energy policy,” particularly in light of expectations for an expected future surge in power demand.
“Accelerating the energy transition and providing reliable, affordable electricity are not mutually exclusive, but they will require thoughtful policies such as comprehensive permitting reform, increased domestic production and processing of critical materials and minerals, and building out natural gas infrastructure to shore up reliability and help support more renewable energy,” Durbin said.
American Petroleum Institute SVP Dustin Meyer of Policy, Economics and Regulatory Affairs echoed the concern that the “final rule fails to properly consider grid reliability and the need for new natural gas plants to maintain that reliability.”
