This story was updated March 4.
EPA sent a new version of its power plant carbon rule to the White House on Friday. This time it’s unlikely that West Wing political advisers will change a key provision on gas plants.
The final rule won’t include a provision that was inserted into an earlier draft of the regulation by the president’s climate team last year — covering existing natural gas plants.
The move sheds light on a disagreement between agency officials and White House climate advisers over a key aspect of the president’s agenda to address rising temperatures. Existing gas plants produce 43 percent of power sector electricity, and the pace at which they’re regulated could affect the administration’s efforts to eliminate carbon emissions in the sector by 2035.
By jettisoning the most contentious and legally problematic element of the rule, EPA says it can forge “a new, comprehensive” approach to regulating existing gas plants for carbon and other pollutants. But it also injects uncertainty into the prospect of reducing emissions at those facilities because the administration wouldn’t be able to finalize a stand-alone rule for those plants until President Joe Biden’s second term — if he wins the election against his likely challenger, former President Donald Trump.
But many industry, state and environmental advocates say it’s the right approach. They argue that EPA is trading in a rule that was abruptly altered last year to cover a small portion of existing gas plants for a future one that could reduce more pollution from more gas plants.
“It’s not great politics for them to back away from it. But it’s pretty good policy for them to back away from it,” said Miles Keogh, executive director of the National Association of Clean Air Agencies.
White House climate adviser Ali Zaidi said in an email to E&E News that taking carbon regulation in stages — new gas and existing coal now, and existing gas in the future — builds “brick by brick” toward meeting Biden’s goal of a fully decarbonized U.S. power grid by 2035. He stressed that EPA and the White House were in agreement.
“The historic push is sparking a manufacturing renaissance across America, securing environmental justice in rural places and urban, and positioning us to lead on climate globally,” Zaidi said. “As an administration, we will continue to sprint down this path together.”
White House climate officials pushed to add some of the nation’s biggest gas plants to last year’s draft rule at the urging of environmentalists.
Interagency review records for EPA’s draft rule, which was issued last May, show that the agency didn’t intend to regulate existing gas at all. The draft it submitted to the Office of Management and Budget last March covered existing coal and future gas plants.
It was the first time future gas plants had faced meaningful carbon restrictions, and EPA laid the groundwork early in 2022 by taking public comment on technological pathways that would allow them to be built with strict carbon controls.
The most aggressive options EPA explored for future gas were carbon capture and blending high volumes of hydrogen. Industry comments painted those technologies as problematic even for future gas plants. Their track record for existing plants — which may have been built far away from needed infrastructure and with technologies that made retrofits difficult — was much thinner.
But insiders told E&E News that the White House climate team led by adviser Ali Zaidi pushed to include existing large baseload gas plants in the rule, using the same performance standards that were proposed for new baseload gas plants.
The change was made in the last few weeks of review last year, and EPA’s staff didn’t have time to update the regulatory impact analysis to include existing gas until later that summer.
The draft standards for both future and existing power plants targeted the largest units — those that were at least 300 megawatts and ran at least half the time.
New or old, they’d have to cut emissions in line with progressively higher blends of hydrogen by 2032, or 90 percent carbon capture by 2035. It wasn’t a standard tailored to existing plants — as the regulatory analysis showed. And while future smaller gas plants that would run at lower capacity faced their own standards, the rule created an incentive for utilities to simply cut capacity at existing gas plants below 50 percent to avoid regulation.
Large baseload gas plants aren’t always the highest-emitting facilities. Gas plants that ramp up and down to cover demand spikes are often higher-emitting and not as well maintained, so a rule that encourages their use could have adverse effects on carbon and local air pollution.
“Folks who knew what they were talking about looked at the initial proposal for existing gas and thought, you know, that’s not a super-elegant policy design there,” said Keogh, referring to the provision added by the White House. “And there’s real questions about whether that’s going to be the smartest way to do it.”
On Thursday, EPA announced its new plan to begin working on a suite of rules that will target not only climate emissions but smog and toxics from existing gas plants. In addition to a targeted carbon rule for those sources, EPA says it is eyeing an update to nitrogen oxide standards and to toxic pollutants, like formaldehyde.
EPA said it made that announcement now instead of in April, when the rule for existing coal and future gas is due, in order to save time.
An EPA official said the agency plans to “begin a robust stakeholder engagement process, working with workers, communities with environmental justice concerns and all interested parties to help create a more durable, flexible and affordable proposal for existing gas combustion turbines that protects public health and the environment.”
But industry advocates said the announcement — which came the day before EPA transferred the rule to the White House for review — was an attempt to prevent political officials from trying to reinsert a standard for existing gas.
“It points to the fact that EPA doesn’t want the White House to make political changes, necessarily,” said one industry official who was granted anonymity to discuss EPA strategy. “And so this is their way of ensuring that once the rule goes over to the White House, there’s less substantive changes made.”
EPA said it “does not comment on deliberations during the interagency review process.”
“We all want to address pollution from existing gas sources and are working together to develop an approach that takes advantage of all we have learned since our proposal,” EPA said in an email to E&E News.
