American Oil and Gas Reporter - June 2023 - 31

oil- and gas-fired steam generating units,
and certain existing gas-fired combustion
turbines. The deadline for the 60-day
comment period is July 24.
" Consistent with EPA's traditional approach
to establishing pollution standards
for power plants under section 111 of the
CAA, the proposed standards are based
on technologies such as carbon capture
and sequestration/storage, low-GHG hydrogen
co-firing, and natural gas cofiring,
which can be applied directly to
power plants that use fossil fuels to generate
electricity, " the agency says.
The agency also asserts that the standards
" provide owners and operators of
power plants with ample lead time and
substantial compliance flexibilities, allowing
power companies and grid operators
to make sound long-term planning and
investment decisions, and supporting the
power sector's ability to continue delivering
reliable and affordable electricity. "
Snitchler contradicts that assertion.
" Once again, aspirational policy is getting
ahead of operational reality, " he assesses.
" If finalized, these aggressive rules will
undoubtedly drive up energy costs and
lead to a substantial number of power
plant retirements when experts have
warned that we are already facing a reliability
crisis due to accelerated retirements
of dispatchable resources. Efforts to reduce
emissions and deploy zero-emitting technology
must be coupled with an understanding
of how a rule like this will
impact reliability. "
Author, analyst and journalist Robert
Bryce notes that members of the Federal
Energy Regulatory Commission also have
questioned the adequacy of the country's
power supply and distribution. " At the
same time FERC commissioners are warning
of catastrophic failures on the U.S.
electric grid, the EPA under President
Joe Biden wants to implement rules that
could-repeat could-force the closure
of 90% of the hydrocarbon fueled power
plants in the country, " he writes.
Gas-Fired Plants
According to EPA, starting in 2030,
the proposal generally will require more
CO2 emissions control at fossil-fuel-fired
power plants by phasing in progressively
more stringent CO2 limits. The standards
vary by the type of unit, as well as its operational
frequency and timeline.
An EPA fact sheet about the proposal
highlights several ways the rulemaking
seeks to change New Source Performance
Standards for fossil-fuel-fired stationary
combustion turbines, which tend to be
new natural gas units. The agency says
the GHG NSPS are based on generation
efficiency, as well as CCS or co-firing
low-GHG hydrogen.
For new and reconstructed fossil fuelfired
combustion turbines, EPA proposes
three subcategories:
· Low load, " peaking, " units that
consist of combustion turbines with a capacity
factor of less than 20%;
· Intermediate load units covering
combustion turbines with a capacity factor
that ranges between 20% and a sourcespecific
upper bound based on the design
efficiency of the combustion turbine; and
· A base load subcategory for combustion
turbines that operate above the
upper-bound threshold for intermediate
load turbines.
EPA says it plans to phase in best
system of emissions reduction (BSER)
and performance standards for each subcategory
that are based on the agency's
evaluation of the statutory factors, feasibility,
effectiveness and affordability. The
proposal's call for CCS or co-firing hydrogen
applies to intermediate and base
load generation.
According to EPA, the proposal's first
phase requires facilities to meet an initial
standard that is based on highly efficient
generation, with the second and third
phases tightening restrictions at specified
compliance deadlines:
· Intermediate load affected facilities
must meet a second phase standard based
on 30% low-GHG hydrogen (by volume)
by 2032.
· Base load affected facilities that
follow the CCS pathway must meet a
second phase standard based on 90%
capture of CO2, using CCS, by 2035.
· Base load affected facilities that
follow the hydrogen pathway must meet
a second phase standard based on cofiring
30% hydrogen by volume by 2032
and a third phase standard based on cofiring
96% hydrogen by volume by 2038.
Reliability Crisis
Bryce questions EPA's assumptions
about the state of CCS technology. " The
EPA's proposed rule hinges on the dubious
claim that CCS is ready for prime time, "
he writes.
He mentions estimates suggesting
that, during the previous decade, capturing
CO2 from a facility's flue gas
exacted a 28% energy penalty. " Thus,
simply capturing the CO2 slashes the
output of the plant by more than a quarter, "
he warns. " Second, we don't have
enough pipelines to move that colorless,
odorless, worthless gas. Remember, due
to opposition from climate activists, energy
companies cannot get permits to
build pipelines that carry valuable products
like crude oil and natural gas. Given
that, it's unlikely that any energy companies
will be able to get permits for
pipelines to carry CO2. "
Senator Joe Manchin, D-W.V., blasts
EPA's proposal as another Biden administration
overreach that embraces climate
alarmist radicalism at the expense of energy
reliability and affordability. Therefore,
the senator said he would withhold his
support in the closely divided Senate for
the Biden administration's nominees to
the agency.
" This piles on top of a broader regulatory
agenda being rolled out to kill the
fossil industry by a thousand cuts, "
Manchin assesses. " Neither the Bipartisan
Infrastructure Law nor the Inflation Reduction
Act gave new authority to regulate
power plant emission standards. However,
I fear that this administration's commitment
to extreme ideology overshadows
its responsibility to ensure long-lasting
energy and economic security and I will
oppose all EPA nominees until it halts its
government overreach. "
Ultimately, Snitchler suggests, implementing
EPA's proposal will exacerbate
a daunting situation. " When proposed
regulations drove coal from the
market via the CPP, natural gas resources
were available to ensure reliability, " he
recounts. " This rule could cause a similar
outcome that this time will drive lower
emitting, cleaner natural gas resources
off the system.
" If it does, there are neither suitable
nor sufficient generating resources available
to support the existing and increasing
demands of the electric grid-the performance
characteristics of the resources
expected to fill this looming gap are different
from the resources they would replace;
they are not interchangeable on a
one-to-one basis, " he adds. " We are not
slow walking into a reliability crisis-if
this rule is finalized, we will be choosing
to run toward that outcome. A self-inflicted
reliability crisis should be unacceptable
to all Americans. "
r
INEOS Closes Purchase
Of Chesapeake Assets
In Eagle Ford Shale
LONDON-INEOS Energy has completed
its previously announced $1.4 billion
acquisition of a portion of Chesapeake
Energy's oil and gas assets in South
Texas' Eagle Ford Shale.
INEOS says the deal marks its entry
as operator into the U.S. onshore oil
and gas market, bringing with it 2,300
wells producing net 36,000 barrels of
oil a day. The acquisition includes production
and exploration leases across
172,000 net acres.
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JUNE 2023 31
American Oil and Gas Reporter - June 2023

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