By Jeryl L. Olson, William R. Schubert, and Eric E. Boyd

The U. S. Environmental Protection Agency (EPA) issued a proposed rule that would reach a new milestone for environmental regulation in the United States: substantive limits on carbon dioxide (CO2) emissions at the source.  The rule would apply to new fossil fuel-burning electric utility generating units (EGUs) with generating capacities of over 25 megawatts, setting the limit at 1,000 lbs of CO2 per megawatt-hour.  Coal-fired power plants are the most likely to be affected; emissions from natural gas units would remain below the threshold.  The EPA suggested that natural gas is already the fossil fuel of choice at new EGUs for economic reasons.

An alternate compliance option would exist for new coal-fired or pet coke-fired units.  The proposed rule states that these units “could meet the standard either by employing carbon capture and storage (CCS) of approximately 50% of the CO2 in the exhaust gas at startup, or through later application of more effective CCS to meet the standard on average over a 30- year period.”  However, regulated entities are likely to rule out this option as too costly.

“Transitional sources,” i.e., certain units that are soon to be built, would be exempt from the rule.  EPA described the scope of the “transitional sources” exemption as covering projects that “have acquired a complete preconstruction permit by the time of this proposal and that commence construction within 12 months of this proposal.”

Public comments should be marked with docket number, EPA-HQ-OAR-2011-0660, and must be received on or before June 12, 2012.