EPA Targets Gas-Fired Power Plants With Carbon Capture Requirements

By Charles Kennedy - Apr 24, 2023

• The EPA plans to require gas-powered plants to capture carbon dioxide emissions.
• The new rules could be made public this week.
• 
  
• "These standards could level the playing field between new gas plants and new renewable energy," a Sierra Club official told Reuters.

The Environmental Protection Agency plans to adopt requirements for gas-fired power generators to capture the carbon dioxide emissions of their facilities, Reuters has reported, citing unnamed sources.

According to the sources, the new rules could be made public as soon as this week to cover both new and existing power generation facilities running on natural gas. Natural gas, Reuters notes, accounts for a quarter of total U.S. carbon emissions.

Once these rules come into effect, utilities will have to choose what to invest in: gas-fired plants with carbon capture and storage systems in place or renewables.

"These standards could level the playing field between new gas plants and new renewable energy," a Sierra Club official told Reuters, which noted that currently, most U.S. gas-fired plants do not pay for the carbon emissions they generate.

Yet the remark also raises the question of just how cheap wind and solar actually are if they need a leveling of the playing field with natural gas.

Natural gas accounts for the biggest chunk of fossil fuel power generation in the United States. Last year, the total share of fossil fuels in the mix was 60 percent, and of that, 60 percent was natural gas, with the rest coal.

Yet the fast decarbonization of the grid that the Biden administration is envisioning in its climate plans requires this to change, and carbon capture is a big part of how this change will be effected.

To encourage more carbon capture, the Inflation Reduction Act features an increase in carbon capture credits from $45 per ton to $85 per ton of carbon dioxide removed from a smokestack. For carbon captured from the air, the incentive is a lot more generous at $180 per ton.

Naturally, environmentalists are not fans of carbon capture, arguing that it will only extend demand for fossil fuels over time instead of discouraging it.

By Charles Kennedy for Oilprice.com