Los Angeles, CA Ė (September 23, 2015) Ė It is now apparent that the Obama Administrationís Clean Power Plan aims to significantly reduce the amount of power generated by coal. Itís a game changer for utilities, mining companies and equipment suppliers. And, itís another spotlight moment for renewables but in the long run, the real champion will be natural gas.
The final CPP rules issued by the EPA on Aug. 3 reflect important revisions from those proposed in 2014, including some that were detrimental to the survival of the power industry. But the fact remains that the federal government is focused on increasing power from sources like wind and solar while cutting power from coal.
What is not fully considered by this new federal focus is the importance of natural gas in the overall equation; thatís where the plan misses the mark. Natural gas remains the only viable choice to reach the planís goals. CPP seeks to reduce CO2 emissions in 2030 by one-third from 2005 levels. States have up to three years to submit their own reduction plans.
As states develop compliance plans, they are "dependent on natural gas combined cycle turbines to pick up the slack when the sun doesnít shine and the wind doesnít blow," says Americaís Natural Gas Alliance (ANGA).
The White Houseís plan perpetuates a false choice between renewables and natural gas, says ANGA. The plan is "disingenuous" and ignores market realities for gas to provide much of the nationís power while reducing emissions.
The industry trade group also notes the irony in the Energy Information Administrationís routine release of power generation data for April 2015, one day after the release of Obamaís plan. In that month, according to the EIA, the US generated more electricity from natural gas than any other fuel source, including coal. That was the same month the country emitted less CO2 into the atmosphere than at any time since 1988.
"Thatís no coincidence," observes ANGA. And, as the most cost-effective and flexible option for power generation, natural gas "will balance the dual mandates of cleaner air and healthy economic growth."
Supporters of renewables were quick to underscore the ways the Obama plan discourages a "rush to natural gas," due to its risks to consumers, public health and the climate. A report by one group notes the plan incentivizes "zero-carbon energy sources," requires state compliance plans to meet a renewables target, limits gas combined cycle power to 22 percent above 2012 levels, and closes a loophole for new source gas plants.
Whatís more, to illustrate the significant leverage given coal in the economy and power grid, 16 states filed protests with the EPA seeking to delay the rule while legal challenges are sorted out.
In the meantime, natural gas will play a pivotal role in reliably powering the economy and reducing emissions.
"The presidentís plan to reduce power plant emissions from higher-carbon fuels would greatly benefit from a clear emphasis on a clean, abundant, efficient fuel like natural gas," said Nicholas Nadjarian, chief executive officer at Industrial Motor Power Corp, a leading power provider to O&G. "We can expect a steady increase in natural gas use in the power sector and are prepared to provide targeted solutions for our customers."
By Dan Larson, journalist for IMP Corp.