US announces stringent new conditions for coal-fired power plants

THE first-ever US proposal to restrict carbon dioxide emissions would have once been a major shock to electricity companies by making it uneconomic to build new coal-fired power plants.

But the discovery of abundant supplies of cheap natural gas means that many of those plants won’t get built anyway – making the Obama administration’s plan, while painful for the coal industry, much less relevant.The US Environmental Protection Agency (EPA) announced on Tuesday it planned to set new rules that would limit new power plants’ CO2 emissions, the first move by the world’s largest economy to regulate the gas blamed for contributing to global warming.Those CO2 rules, long feared by coal users, come on top of EPA pollution regulations that will drive dozens of old coal power plants into retirement, and will make it even harder to build those plants that have powered the nation for decades.’It is dramatic,’ said Brandon Blossman, analyst with Houston investment bank Tudor, Pickering and Holt. ‘But cheap natural gas has caused that to happen in a much stealthier way.’A glut of gas from vast shale fields in the United States has driven prices of that fuel to their lowest level in a decade near US$2,20 per million British thermal units, prompting power companies to run their gas plants at record levels.That has pushed coal’s share of the nation’s electricity production down by nearly a quarter over the past year, although it still remains the largest supplier of power, with nearly 40 per cent of the market compared to 27 per cent for gas-fired power generators. -Nampa-Reuters

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