* First step in Obama's climate-change package
* New coal-fired power plants require tech to capture carbon
* Coal, elec utilities see evidence of Obama's "war on coal"
* Industry also jittery over further EPA rules due in 2014
* Stock prices of U.S. coal companies fall
By Valerie Volcovici
WASHINGTON, Sept 20 The Obama administration on
Friday announced first-ever regulations setting strict limits on
the amount of carbon pollution that can be generated by any new
U.S. power plant, which quickly sparked a backlash from
supporters of the coal industry and are certain to face legal
The U.S. Environmental Protection Agency's long-awaited
guidelines would make it near impossible to build coal plants
without using technology to capture carbon emissions that foes
say is unproven and uneconomic.
The rules, a revision of a previous attempt by the EPA to
create emissions standards for fossil fuel plants, are the first
step in President Barack Obama's climate change package,
announced in June.
The revised rule contained a few surprises after the agency
held extensive discussions with industry and environmental
groups, raising concerns by industry that the EPA's new
restrictions on existing power plants, due to be unveiled next
year, will be tough.
But the regulations announced on Friday cover only new
plants. Under the proposal, new large natural gas-fired turbines
would need to meet a limit of 1,000 pounds of carbon dioxide per
megawatt hour, while new small natural gas-fired turbines would
need to meet a limit of 1,100 pounds of CO2 per MWh.
New coal-fired units would need to meet a limit of 1,100
pounds of CO2 per MWh but would be given "operational
flexibility" to achieve those levels, the agency said.
The most efficient coal plants currently in operation emit
at a rate of at least 1,800 pounds of CO2 per MWh.
In a speech at the National Press Club in Washington on
Friday, EPA Administrator Gina McCarthy discussed the rationale
behind the new rules, and defended Obama's climate plan, which
opponents say amounts to a "war on coal."
"There needs to be a certain pathway forward for coal to be
successful," she said, adding that "setting fair Clean Air Act
standards does not cause the sky to fall."
Still, stocks of coal mining companies fell on Friday and
most are down more than 25 percent for the year to date. Alpha
Natural Resources Inc fell 6.2 percent to close at $6.22
on Friday. Peabody Energy Corp closed 3.1 percent lower
at $18.16 and Arch Coal Inc dropped 5 percent to $4.74.
"Today's announcement ... is direct evidence that this
Administration is trying to hold the coal industry to impossible
standards," said Senator Joe Manchin, a Democrat from the
coal-producing state of West Virginia.
The U.S. Chamber of Commerce, which represents more than 3
million businesses, said the EPA's strategies "will write off
our huge, secure, affordable coal resources."
In her first major speech since being confirmed to the EPA's
top job in July, McCarthy described her commitment to cleaner
air in sometimes emotional terms, focused on the impact of
pollution on public health.
"It's not just the elderly who suffer from air pollution. So
do children - especially children in lower income and urban
communities," she said. "If your child doesn't need an inhaler,
then you are one very lucky parent."
Under the new rules, any new coal plant built in the United
States would need to install technology to capture its carbon
waste, known as carbon capture and storage (CCS).
That technology, which aims to prevent the release of large
volumes of carbon into the atmosphere, is controversial because
it is currently not yet operational on a commercial scale, an
issue likely to be central to legal challenges to the EPA.
By giving coal plants seven years, rather than the 30 years
proposed in 2012, to achieve an emissions rate below 1,100 lbs
per MWh, the EPA is showing that it has full confidence in the
nascent CCS technology.
"We now have enough information and confidence to say that a
CCS option with coal meets the test of being the best system of
emission reduction," David Doniger, policy director of the
Natural Resources Defense Council's Climate and Clean Air
Program, told Reuters.
The EPA previously issued a version of the rule last year
but made changes to address potential legal weaknesses and to
factor in more than 2 million public comments.
The EPA will launch a fresh public comment period after
It is due to issue a proposal to address emissions from
existing power plants - which account for nearly a third of U.S.
greenhouse gas emissions - by June 2014.
McCarthy, the EPA boss, said on Friday that people should
not look at the proposal for new plants and then assume that the
future rule for the existing fleet will be similar.
Canada, whose emissions policies are in focus as it waits
for a U.S. decision on whether to approve the Keystone XL oil
pipeline from Alberta to Texas, applauded the U.S. action on
power plants. Joe Oliver, Natural Resources Minister, noted in a
statement that Canada has already banned construction of new
coal-fired electricity plants that use traditional technology.