Tuesday, April 29, 2014

SCOTUS upholds EPA on coal plant pollution

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In a 6-to-2 vote, the U.S. Supreme Court has upheld Environmental Protection Agency (EPA) authority to regulate air pollution generated by coal plants that crosses state lines, putting additional pressure on coal as an energy source – and particularly electricity generation – and the railroads that deliver the fuel.

The ruling, issued Tuesday, April 29, 2014, affects numerous Midwest states reliant on coal, historically resisting pleas or lawsuits from East Coast states usually downwind from coal-burning power plants. The court in essence said the Obama Administration has the right to issue new EPA regulations limiting emissions from coal plants, which has been challenged by opponents declaring such a move a "war on coal."

Railroad coal volume has slipped in recent years, though recovering slightly as 2014 began, in part due to cheaper prices offered by increasingly abundant natural gas supplies, which railroads have begun transporting in increasing quantities, though still falling far short of coal carloadings.

Many U.S. coal plants already have closed down prior to the ruling, as utilities have retired older, less efficient plants. Electric utilities can invest in pollution control equipment to keep existing plants running, but many observers, including several Wall Street analysts, doubt the cost-effectiveness of such a move for most sites.

Last December, the Union of Concerned Scientists updated a report on coal generation, stating in part, "A significant number of U.S. coal-fired generators are old, inefficient, dirty, and no longer economically competitive. Simply stated, they are ripe for retirement and should be considered for closure."

The American Coalition for Clean Coal Electricity, a partnership of industry groups, says more than 280 coal-fired generating units are slated to be shut down in part due to stricter EPA regulations. The coalition asserts “the number of coal plants slated for shutdown is fives times greater than the EPA predicted would be forced to shut down due to its regulations.”