On Coal Ruling, EPA Asks For a Second Look

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Abandoned coal company structures are seen on April 16, 2012 in Lynch, Kentucky. The historic coal mining town of Lynch once boasted a population of more than 10,000 and was once the largest coal camp in the world.

Looks like the Environmental Protection Agency (EPA) isn’t taking “remanded” for an answer. Today the agency is asking a court to review an August decision that turned down an EPA rule aimed at reducing pollution from coal power plants across state lines, called the Cross State Air Pollution Rule.

In a filing with the DC Court of Appeals, the EPA asked for a “Petition for Rehearing En Banc.” We don’t know what that is, so we googled it. And it turns out it’s significant. En Banc is French for “by the full court.”

The original ruling in August was made by a three-judge panel of the appeals court. They voted along party lines, essentially — two Republican appointees for turning the rule down, one Democratic appointee for approving the proposed EPA rule. By asking for En Banc, the EPA wants to have the entire Court of Appeals (composed of eight judges, five of them Republican and three of them Democratic appointees) review the case.

Texas was one of the many parties (and states) to the suit asking for the rule to be overturned, represented by State Attorney General Greg Abbott and several state agencies, alongside several power and mining companies like Luminant. (You can read more about the original decision in our earlier report.)

In a statement to StateImpact Texas, the EPA says that the rule was proposed as “a cost-effective and common-sense approach that would help states meet their Clean Air Act obligations to cut air pollution and meet air quality health standards, preventing more than 30,000 premature deaths and hundreds of thousands of illnesses each year.”

Coal has become something of a political football this election season. Republican presidential candidate Mitt Romney boasted at Wednesday’s debate that he “likes coal” and has received financial backing from the coal industry. Romney says regulations like the proposed EPA rule threaten American jobs and industry. President Obama, meanwhile, has said that he supports clean coal but has largely championed natural gas and renewable development.

But missing from the dialogue is the fact that what’s “killing coal” isn’t politics or regulation as much as it is the low price of natural gas, thanks in large part to a fracking boom taking place in Texas and other parts of the country. A report this week by the Brattle Group, a research consultant group that advises the Texas electric grid, found that since late 2010, “both natural gas prices and the projected demand for power have decreased, and environmental rules have been finalized with less restrictive compliance requirements and deadlines than previously foreseen.”

As a result, coal is on the decline. “As of July 2012, about 30,000 MW of coal plants (roughly 10% of total U.S. coal capacity) had announced plans to retire by 2016,” the report says. Coal power plant retirements are “even more sensitive to future market conditions than to regulations, particularly natural gas prices,” it says. If natural gas prices go up, fewer plants could shut down for good.

More notably, the study finds that new regulations won’t financially kill the coal industry. “Once industry-wide compliance adjustments are made, the coal fleet should be as profitable as it would have been absent the environmental rules,” the report says.