Biden’s EPA Plans to Ration Electricity

The Biden Administration’s regulations are coming so rapidly that keeping track is difficult, but we’ll try.

Thursday, the Environmental Protection Agency proposed its latest humdinger—rules that will ultimately force the shutdown of coal plants while banning new plants that supply natural gas.

“With the announcement today, the power sector can make planning decisions with a full array of information,” declared the EPA press release. What does that mean? Get on board with the green-energy transition because we must eliminate fossil-fuel power.

Barack Obama’s regulation ignited a wave of coal plant closures. Now, Joe Biden is trying to finish the job by tightening wastewater, mercury, and ash disposal standards. EPA is additionally replacing the Obama Clean Power Plan that the Supreme Court struck down with a rule that requires new gas-fired plants and coal plants to adopt costly and unproven carbon-capture technology by 2032.

The Clean Air Act, Section 111, says the EPA can regulate pollutants from stationary sources through the “best system of emission reduction” that is “adequately demonstrated.” Carbon capture needs to be adequately demonstrated, or the best. By 2023, only one commercially scaled coal plant in the world will use carbon capture, and no plants filed by gas did.

EPA states that Inflation Reduction Act tax funding and credits in the 2021 infrastructure bill will “incentivize and facilitate the deployment” of carbon capture. However, subsidies must be two or three times larger to make coal plant technology cost-effective. Carbon capture reduces a plant’s efficiency, raising costs.

Because carbon capture utilizes 20% to 25% of the electricity generated by a power plant, less electricity will be available for the grid. This means additional generators will be required to provide the same amount of power. However, new gas-fired plants won’t be built because the technology will make them uneconomic. Now there’s a catch-22.

One more problem—CO2 requires underground storage in specific geologic formations, primarily in the Gulf Coast and upper Midwest. Allowing new wells for CO2 injections will take six years. Pipelines for the transport of CO2 can take longer. Green groups oppose CO2 pipelines as they do for natural gas and oil.

Uncertain regulations will discourage the development of gas-fired new plants, even while coal plants that generate about 16% of the country’s power are forced to retire. Renewables are unable to provide reliable power around the clock to fill the gaping hole. 

This will all happen while power demand is surging amidst an artificial intelligence boom and new manufacturing needs. The grid operator in Texas this week increased its forecast for demand growth for 2030 by 40,000 megawatts compared with last year’s forecast. That’s around seven times more powerful than New York City uses at any time.

Texas’s power demand will almost double over the next six years due to manufacturing plants, crypto mining, data centers, and the electrification of gas and oil equipment. When Texas temperatures climbed into the 80s, the grid operator informed power plants not to shut down for maintenance. Americans nationwide are being told to increase their thermostats during summer and avoid running appliances to prevent blackouts.

The EPA plans to unveil another rule soon to reduce CO2 emissions from existing gas-fired plants, so some may also have to shut down. Meanwhile, China has added around 200 gigawatts of coal power over the past five years—about as much as the entire American coal fleet. The fossil-fuel onslaught by the Biden administration won’t affect temperatures globally.

However, despite what the EPA states, it will increase electricity prices. Electric rates are already soaring amid the green transition that the government is force-feeding, particularly in states like New Jersey, California, and New York, which have done the most to punish fossil fuels.

Even some Democrats are noticing the strain on the pocketbooks of their voters. Representatives Vicente Gonzalez, Marcy Kaptur, Henry Cuellar, Mary Sattler Peltola, and Jared Golden urged President Joe Biden last weekend to defer finalizing the EPA’s power-plant rules because they cause “increased risks to electric reliability” and might “inadvertently exacerbate existing problems related to the unaffordability of electricity.”

Biden’s new rules are sure to draw a legal challenge. However, as litigation plays out, the massive uncertainty will delay investment in needed new gas plants. In Biden’s first term, Americans didn’t face energy rationing, but they might soon.