A Contentious Pick

alt   By Russell Ray, Managing Editor

She’s a plain-spoken Bostonian who is popular with environmental groups and even some in the energy industry.

She was one of our keynote speakers at COAL-GEN 2012, and she has won my begrudging admiration for her straight-talking discourse with the power generation industry.

At the time this column was written, Gina McCarthy was being widely exalted as President Obama’s pick to lead the U.S. Environmental Protection Agency. Her selection is by no means a prologue for diplomacy or compromise with the U.S. power sector. Her selection signifies a commitment to a calculated strategy to advance the administration’s War on Coal, a conflict borne from real rulemakings and real policies carried out by the EPA’s previous administrator, Lisa Jackson, who left the agency’s top post last month.

Gina McCarthy   The changing of the guard will have little effect on the EPA’s anti-coal agenda. McCarthy, a former state regulator from Connecticut and assistant administrator of the EPA’s Office of Air and Radiation, has led the EPA’s efforts to impose a suite of new clean-air rules for U.S. power plants, including a greenhouse gas standard that effectively bars the construction of new, highly efficient coal-fired generation in the U.S.
Gina McCarthy

Given Obama’s State of the Union Address, where he pledged to make climate change a priority and threatened executive action in the absence of climate-change legislation, McCarthy’s selection shouldn’t be a surprise. She is a veteran regulator and a clean-air expert who has faced heated criticism from lawmakers and industry leaders for the agency’s tough new emission standards.

To her credit, McCarthy was instrumental in lowering the cost of complying with the Mercury Air and Toxics Standard, which was finalized and enacted into law last year. The final rule was more flexible than the initial proposal and required fewer plants to install costly emission control equipment.

But her selection means the EPA will be working hard to finalize the first greenhouse gas standard for power plants, a standard that precludes the construction of new, cleaner-burning coal-fired plants and discourages investment in clean coal technologies. It also means the EPA will be expanding its anti-coal agenda by proposing a greenhouse gas standard that targets existing coal-fired power plants.

McCarthy delivered a compelling speech at COAL-GEN last August in Louisville, Ky. As compelling as it was, her message was carefully crafted and failed to trump the chief criticisms of the EPA’s blitz of new emission standards, which fail to achieve balance between economic concerns and environmental concerns.

Here are a couple of excerpts from McCarthy’s speech last August.

McCarthy: “My job is primarily to implement the Clean Air Act. Our Clean Air Act is prescriptive, but it does allow flexibility. It looks at variability in technology and design. It is not a law that picks winners and losers.”

Not exactly.

In the battle between coal-fired and gas-fired generation, gas is clearly winning due partly to low-priced natural gas. But gas has received a lot of help from the EPA. Instead of embracing competition and technology to determine the winner, the EPA is picking the winner by managing the competitiveness of coal with new regulation that favors gas over coal. The EPA’s proposed New Source Performance Standard is a perfect example.

McCarthy: “The Clean Air Act recognizes that coal is a significant and major source of electricity generation. We do not anticipate that the rules we have put into place or are proposing will do anything to change that fact. We believe that as a result of our rules, clean coal will have a place in the future.”

This is disingenuous at best.

The prospects and the economics of building a modern-day coal-fired power plant equipped with clean-coal technology in the U.S. have been severely damaged by the EPA’s proposed NSPS, which is expected to be finalized this year. Without it, the industry would undoubtedly be pursuing clean coal projects to mitigate the risk associated with the unruly price of natural gas.

McCarthy’s nomination will be met with fierce opposition from Republican senators. Already, some groups are urging lawmakers to reject the nomination. She will face tough questions about allegations the EPA has exceeded its statutory authority and has collaborated with radical environmental groups to settle enforcement lawsuits.

If McCarthy is confirmed, Obama will have a capable general to continue the administration’s assault on the nation’s most important segment of the power sector. If she is successful, it will further handicap the power sector’s effort to meet demand with this nation’s abundant supply of reliably-priced coal and make a mockery of Obama’s so-called “all-of-the-above” energy strategy.

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