How Obama's Power Plant Regulations Will Transform Our Electric Grid

President Obama and the EPA have just taken their biggest and boldest step ever to fight climate change. The Clean Power Plan, unveiled by the EPA today, is far more important than the Keystone XL pipeline—if also far less sexy to slap on a poster. But these carbon-cutting regulations have the potential to transform energy in the U.S. and spur clean energy.

The gist of the Clean Power Plan can be summed up in a single sentence: cut carbon emission from U.S. power plants by 30 percent from 2005 levels by 2030. The draft proposal squarely takes aim at the country's 600 or so coal-fired plants, which are the dirtiest way we generate power. To put it into perspective, coal-fired plants are responsible for 38 percent of all carbon emissions in the U.S., which amounts to 1.45 billion metric tons, or more than the total carbon emissions of Central and South America.

Moving away from coal, which generates over one-third of our energy, means potentially huge changes to our electricity infrastructure. But these changes are not meant to be drastic or draconian (though the energy industry will certainly argue otherwise). The EPA's draft proposal is by design flexible, allowing individual states to choose from a menu of options. The EPA doesn't want coal-fired plants to shut down right away, as rolling blackouts would only mean backlash.

Here's how states can reduce carbon emissions, and what it means for the future of energy. All this is contingent, of course, on the draft proposal, which is now out for 120 days of public comment, actually moving forward. The energy industry is sure to fight it. But unlike Obama's failed big climate change legislation in 2010, he at least won't have to wrestle with Congress.

The Flexible, Four-Part Plan

The EPA's factsheet identifies four "building blocks" for states to create their own plan to reduce carbon emissions.

  1. Make coal-fired plants more efficient by reducing the energy lost through heat.
  2. Use natural gas instead of coal, which is cleaner not actually clean. It's also incredibly cheap thanks to our fracking boom. (More on this later!)
  3. More clean energy resources such as solar, wind, nuclear, wave, etc.
  4. Teach consumers to use less electricity.

The EPA elsewhere also offers a fifth option, cap and trade, which essentially lets states buy and sell permits to pollute above a certain set "cap."

What will actually happen? By design, the flexibility in the system means that we actually don't know, because it depend on each state's plans to be worked with the EPA. The energy mix of states vary drastically, and each state gets its own goal (outlined in page 29 of the 376-page full plan). The Great Plains, for example, are especially reliant on coal.

How Obama's Power Plant Regulations Will Transform Our Electric Grid

Edison Electric Institute via Vox

We can, however, guess at the energy trends that may emerge. Clean energy companies, for one, welcomed the plan. EPA Administrator Gina McCarthy hinted at the possibilities in her speech: "Our plan pulls private investment off the shelves and into our clean energy revolution, and sends it in every direction, not just one or two. The opportunities are tremendous." A clean energy investor told GigaOm that the plan "signals that dirty energy is yesterday's business model and that clean innovation is tomorrow's."

But then there is the specter of natural gas. The U.S.'s carbon emissions have actually already been falling since 2005, the plan's baseline year, thanks to cheap natural gas from the fracking boom. Natural gas emits about half as much carbon dioxide as coal when burned for electricity, but natural gas extraction also release methane, an even more potent greenhouse gas than carbon dioxide.

Gas is cleaner option but it's not clean, and it could turn into a crutch. Whether the EPA can actually push states toward (expensive) clean energy options like solar and wind instead of (cheap) gas remains to be seen.

What About "Clean Coal"?

If you've been paying attention to energy news over the past few years, you've probably run across a phrase that sounds like an oxymoron: "clean coal." The technology has never been tested on a large scale, but "carbon capture" schemes are supposed to prevent emissions from ever reaching the atmosphere. That usually means then injecting captured carbon dioxide gas into the ground, where it should after hundreds or thousands of years react with the rock and turn solid. Let's just say it's never been commercially proven before.

Today's proposal targeting existing coal plants is a complement to an EPA's regulation last fall that required new coal plants to capture carbon. With carbon-capture technology so unproven and the alternative—shifting to natural gas—so cheap, the ruling basically incentives energy companies against building any new coal plants.

But there are coal power plants being built and carbon-capture technologies being developed—in China. The country's coal-fueled economy can't afford to let go of cheap and as yet still-plentiful fossil fuels.

When we zoom out like that, we see that these power plant regulations—as unprecedented and sweeping as they are for the U.S.—are a tiny part of what's going on in greater world. But they are still a symbolic step, a signal for other countries to scrutinize their climate policies. Climate change doesn't care for international borders. [EPA's Clean Power Plan]

Top image: A coal-fired powerplant in Georgia. AP Photo/John Amis