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Luminant and the CSAPR

I have not followed the dustup between energy producer Luminant and the EPA very closely. What I know is that like most other disputes between those who want cleaner air here in Texas and those who don’t is that someone in the latter group is complaining about a new federal regulation that will force them to clean up their act a bit. (It’s always a federal regulation, because our state never makes them do anything it doesn’t have to make them do.) Fuelfix summarized the situation last month:

Texas’ largest energy producer, Dallas-based Luminant, has launched an online campaign against a new federal rule that the company says will force the closing of units at one of its coal-fired power plants and three nearby mines.

Luminant’s new website, reconsidertherule.com, takes aim at the Cross-State Air Pollution Rule, which requires aging power plants in 27 states to install modern pollution controls to sharply cut emissions of sulfur dioxide and nitrogen oxide by Jan. 1. The company filed a federal lawsuit Monday against the Environmental Protection Agency to block the rule, saying the deadline is impossible to meet.

The EPA, to its credit, pushed back aggressively against Luminant’s allegations, which you can see in that post. I still wanted to know more, so I turned to Jennifer Powis of the Sierra Club and asked her to write something for me about this that I could run here. This is what she sent me:

Texas Can Do Better

Let’s start focusing on the road ahead instead of the road behind

Every time a new environmental rule comes down, industry proclaims the sky is falling, and that compliance will be too expensive. Yet, all of our major environmental standards—the Clean Air Act, the Clean Water Act, the Endangered Species Act to name a few—are roughly over 30 years old and all the while, the United States has seen clear economic growth and a cleaner, safer, healthier environment for workers and citizens alike.

The Cross State Air Pollution Rule (CSAPR, pronounced “Casper” even though the acronym is missing a few letters) is no different but here, only Luminant, Texas’s largest power provider, is crying and carrying on as if one rule would be decisive for any regulated business. In truth, as Tom Sanzillo’s recent op-ed in the Houston Chronicle pointed out, poor financial choices, made worse by lower natural gas prices, and rising competition from renewables, made business tough for Luminant long before any new air quality rule was finalized.

CSAPR closes loopholes, allowing coal plants to meet similar air quality standards as other regulated industries

The Rule affects 27 states and creates a cap and trade system for pollutants primarily responsible for the formation of ozone. Ozone, as every Houstonian has dealt with and knows, is smog and has been scientifically linked to premature death, lung damage, and aggravation of asthma or other respiratory conditions. But because the rule is a cap and trade system, any polluting entity can continue to pollute at the same levels as it does today, as long as that same entity purchases pollution allowances on the open market. It’s a sort of pay to play, recognizing that a business can be in the driver’s seat, determining how best to improve air quality within its own fleet. For this rule, every power provider in the state has known something like this was coming since 2005, when then-President George Bush’s administration promulgated a similar transport rule across state borders.

Why should Houston care?

Nearly 500 industrial plants in the Houston/Galveston/Brazoria area, 120 in the Beaumont/Port Arthur area, and 342 in the Dallas/Ft. Worth area have had to install and operate air pollution control systems because those areas fail to meet basic public health safety limits for pollution – the areas are all in non-attainment. But Luminant has saved hundreds of millions of dollars by not installing air pollution controls compared to the more than 900 other industrial plants that have done their part in cleaning up dirty smoke stacks and attempting to clean up Texas’s awful air quality.

Realize the three old Luminant coal plants (Big Brown, Monticello, and Martin Lake) are the top 3 industrial polluters in Texas among nearly 2,000 industrial plants. They are exceptionally dirty plants:1

Combined they emit 25.5% of state industrial air pollution
Combined they emit 33.8% of state industrial SO2 air pollution
Combined they emit 11.4% of state industrial PM10 air pollution
Combined they emit 10% of state industrial NOx air pollution
Combined they emit 37.6% of state industrial CO air pollution

Comparing Luminant’s big dirty three coal plants only to other coal plants, however, shows an even more harrowing tale. Luminant’s Big Brown, Monticello, and Martin Lake are:

46.8% of all Texas coal plant emissions (19 existing coal plants)
41.5% of all Texas coal plant SO2 emissions
36.0% of all Texas coal plant PM10 emissions
30.6% of all Texas coal plant NOx emissions
71.7% of all Texas coal plant CO emissions

You can see why only Luminant has reached far and wide into the media, into state government, and into the courts in an effort to stop a rule that will drastically improve the lives of every day Texans.

It’s Time To Move Beyond Coal

Mayor Parker and Houston industry should fight to defend this rule and level the playing field. But unfortunately, while this rule will create real and substantive improvements in air quality — eliminating multiple non-attainment regions across the country — the Houston/Galveston/Brazoria non-attainment region will still have major air quality concerns after this rule is implemented. (See page 30 and 31.) And in truth, so will Texas.

But the path forward is a go local argument for the state. Texas leads the nation in wind production, has huge untapped solar and geothermal resources, and generally has the most underutilized natural gas capacity of any state in the nation. Instead of capitalizing on this potential, all of the state’s power is focused on overturning this rule. Unfortunately, what scores points in party circles doesn’t often make good policy.

Jen Powis is the state lead for the Sierra Club’s Beyond Coal campaign working to transition Texas’s electric system to cleaner alternatives. The campaign is currently working to stop the construction of seven proposed coal plants, and retire older facilities in order to make room for cleaner and greener systems.

1 All data is compiled from the self-reported emissions inventory in 2009 and maintained by the Texas Commission on Environmental Quality (TCEQ).

My sincere thanks to Jen Powis for writing that. The one thing I will add is that if you read that Tom Sanzillo op-ed, it references a report he wrote for the Sierra Club regarding Luminant’s finances. A little Googling led me to that here. It’s a bit technical for me, but the basic gist of it is that Luminant is way overleveraged; the op-ed summarizes it succinctly. The bottom line is that you should keep all this in mind when the pollution apologists complain about what that bad ol’ federal guvmint is making them do now.

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