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Cleaning Up Power Plant Carbon Pollution Without Getting Bloated on Gas

Dan Lashof

Posted December 14, 2012

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This post written with Kate Sinding

Last week NRDC released a groundbreaking report showing how the Obama Administration can use the Clean Air Act to take a big bite out of carbon pollution from power plants, America’s biggest climate polluters. The report overturns the conventional wisdom that relying on the Clean Air Act to address climate change has to be expensive and won’t have much impact. In fact, the report shows that we can achieve big reductions at low cost, using flexible solutions that drive investment in clean energy to reduce carbon emissions 26 percent by 2020, saving lives and creating clean energy jobs across the country.

Here’s another piece of conventional wisdom the report overturns: Our analysis shows that reducing carbon pollution from the power sector doesn’t have to mean a big switch from coal-fired power plants to natural gas. How is that possible?  One word: efficiency.

The report sets forth in detail (pdf) a proposal for how EPA can carry out its obligations under the Clean Air Act by setting state-specific CO2 emissions limits for existing power plants. One of the most striking and innovative parts of the proposal is that it will give credits to the pollution reductions that come from energy efficiency in America’s homes and businesses. This will lead to a massive increase in efficiency investments, which will make power plant CO2 limits more affordable and result in tremendous clear air benefits.

Our recommended standards encourage states to adopt policies that can drive over $90 billion in energy efficiency investments by 2020. Similarly, states will have an incentive to strengthen their renewable portfolio standards, as increases in renewable electricity generation would earn credit on the same basis as electricity savings through energy efficiency. In total, we project that energy efficiency would cause overall demand to decline by 4 percent, rather than increase by 7 percent. And renewables would rise by about 30 percent (not assuming any new measures to further boost their development, for which NRDC will, of course, continue to fight).

The proposal does not dictate any given amount of natural gas consumption, and our modeling shows that natural gas use remains unchanged from the business-as-usual forecast if we don’t have carbon pollution standards. By incorporating energy efficiency directly into our plan, the net effect of the program is that energy efficiency replaces coal rather than natural gas replacing coal.

This result is surprising to some who assume that cutting carbon pollution from the power sector would necessarily mean increased reliance on natural gas-fired power plants. After all, CO2 emissions per megawatt-hour from a modern natural gas combined cycle power plant are less than half of those from the average coal plant. But emissions from natural gas plants are still a lot higher than zero—which is what you get from energy efficiency and renewables (there are in fact some emissions over the lifecycle of these energy resources, but they are tiny compared to the smokestack emissions of fossil fuel plants and would have to be addressed through other policies aimed at emissions from factories and other sources).

So any comprehensive plan to reduce carbon pollution from power plants—whether our plan, or a carbon tax, or an emissions cap—has two competing effects: it creates an incentive that favors natural gas compared to coal and it creates an incentive that favors all non-emitting energy sources over all fossil fuels. As it turns out these two factors cancel each other out according to the analysis of our plan, resulting in essentially no change in electricity generation from natural gas compared to business-as-usual. A policy focused solely on shutting down dirty coal plants, on the other hand, is more likely to have the unintended side effect of increasing demand for natural gas.

As important as they are, power plant carbon pollution standards alone aren’t the only safeguards we need. The fossil fuel industry–gas, oil, and coal–has been running roughshod over Americans’ health and welfare for far too long. All these fuels threaten the safety of our air, our drinking water, and our communities. As long as we still use any fossil fuels, NRDC will continue to advocate policies to reduce the damage from their production as well as their consumption.

Our power plant plan works in concert with the actions we’re taking to cut methane leakage under the Clean Air Act and to oppose expanded fracking without effective safeguards at the local, state, and national levels – including our support for an on-going moratorium on new fracking in New York while the environmental and health impacts are fully evaluated.

Together, these initiatives will provide a big boost to the health of our families, our communities, and our planet.

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Michael BerndtsonDec 16 2012 12:14 PM

As per Sunday morning coffee with the New York Times:

New York Times endorses Liquefied Natural Gas (LNG) plant expansion to develop an overseas market (12/16/12 "Sending Natural Gas Abroad" editorial).

My guess is Obama in his infinite neo-liberal environmental capitalist's wisdom starts negotiations at half of the O&G proposed number of plants. Negotiations end between Obama and O&G, with 75 percent of the proposed plants being permitted. O&G wins 100 percent of what it really wanted in the first place. They went in negotiations with 25 percent more then is feasibly necessary.

BTW - each LNG plant costs somewhere between $100 million and $2 billion to build (delivery cost) depending on capacity and siting. Here's some info:
These plants aren't being built to run at a reduce capacity or for a short period of time. The life cycle economic analysis is probably between 15 and 30 years of operating life.

My recommendation for LNG plant siting is Westchester County, New York. Near the Marcellus and Utica formations. Hudson River port access for overseas shipping. Geographically protected from "Super Storms" and storm surges... well at least compared to Stanton Island. I'm sure Andy Revkin of Dot Earth would be more then willing to chair public meetings for LNG promotion and permit procurement purposes in his home town.

As I understand it, NRDC is proposing a shift from coal with energy efficiency followed by some other renewable alternative. And should gas be a more viable fossil fuel to coal - then a switch is made. In the mean time O&G will move forward with fracking to produce shale and coal seam gas out the wazoo for LNG export - keeping the price up. On the home front, GE comes to the NRDC team with its combined gas turbine/steam generation plants as alternatives to coal fired plants - since simply switching fossil fuel feed stock to existing plants is highly inefficient. Homes are caulked. A couple windmills and solar panels installed. All is good.

How is this not an Oil and Gas lobbyist's dream come true and an environmentalists nightmare. And please don't give me the common sense, real world, workable solutions spiel I've heard and read a billion times over. Without first setting national regulations for gas and oil exploitation and federal land mineral lease re-ups from the 1920s, this is simply a ruse to push natural gas - intended or by accident.

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