Clean Power Plan Comments
The US Environmental Protection Agency (EPA) has wrapped up a series of four hearings inviting oral comments on the Obama administration’s Clean Power Plan proposal, which is currently open for public comment until October 16. The agency has highlighted multi-state plans, target methodology, and their proposed “best system” to achieve emissions reductions as areas that would particularly benefit from public input.
In a recent blog post, RFF’s Anthony Paul and Sophie Pan break down the four “building block” components that together form EPA’s “best system” for meeting state carbon dioxideemissions targets. They note that calculating the emissions reductions that can be achieved under the blocks individually is important “in the case where some building blocks don’t survive legal challenge.” The authors conclude that block number two—involving shifts to natural gas—might offer the biggest potential emissions reductions.
Natural Gas Price Drop
Cool weather and increasing inventories have caused the price of natural gas futures to drop below $4 per million Btu, to its lowest seasonal price in 13 years, with both trends projected to continue over the next few months. These unusually low prices are also “prompting power plants to switch from coal,” even as output from natural gas generators continues to fall.
In a new discussion paper, RFF’s Joshua Linn, Lucija Muehlenbachs, and Yushuang Wang show how with lower natural gas prices, electricity prices and emissions fall—but not in lockstep. Muehlenbachs explains in a follow-up post: “When there is more switching, we see a smaller drop in the electricity price (because prices are set at the now-higher cost of coal-fired generation, not the falling cost of natural gas). But at the same time, with more switching, we see a larger drop in emissions. So, ultimately, the more that electricity consumers benefit from a price drop, the less we see environmental benefits.”
