EPA Rules Close Door on Energy Projects
National Review's Jim Geraghty noticed two coal projects in Wyoming and West Virginia that got scrapped in July. He suggests it's due to EPA's new Cross-State Air Pollution Rule. I think Geraghty is on to something, but he should look more broadly. The cause may be the glut of several major EPA rules, all working in concert to create massive uncertainty for energy sector investors. Bill Kovacs, the Chamber's senior vice president of Environment, Technology, and Regulatory Affairs, explained to a House of Representatives subcommittee:
The cumulative impact of regulatory action can be overwhelming: agencies literally have the power to decide the fate of firms and entire industries. American Electric Power Co. made headlines last month when it disclosed that EPA’s “train wreck” of coal industry regulations—Coal Ash, Utility MACT, the Transport Rule and Cooling Water Intake structures—would force the utility to retire 6,000 megawatts of coal-fired generating capacity and spend another $6 billion to $8 billion reworking the rest of its fleet. AEP would close three power plants in West Virginia, one in Ohio and one in Virginia, and would retire several boilers at coal plants in Indiana, Kentucky, Ohio, Texas and Virginia.
AEP is not alone. Six other power plants have announced early retirement due to excessive regulation: Portland Gas & Electric’s Boardman coal-fired power plant in Oregon; Exelon Corporation’s Oyster Creek Nuclear Generating Station in New Jersey; TransAlta Corporation’s Centralia coal-fired power plant in Washington; and, just this week, three Georgia Power plants in the next two years. In each case, the utility was forced to choose between installing several hundred million dollars’ worth of pollution controls to comply with EPA regulations, or simply shut down early. In all cases, the utility chose early retirement.”