Citing the now five-year-old Supreme Court ruling which mandated that under the Clean Air Act the EPA must set standards to reduce global warming emissions if the agency found them to be harmful, the EPA has issued the country's first limits on greenhouse gas emissions for new power plants.     

The new rule will effectively bar the building of any new coal plants, as it will require any new power plant to emit no more than 1,000 pounds of carbon dioxide (CO2) per megawatt of electricity produced. The average U.S. natural gas plant emits between 800 and 850 lbs of CO₂ per megawatt, while coal plants emit an average of 1,768 lbs of CO2 per megawatt. Existing power plants will not be affected by this new rule.

While the Co2 limit does not explicitly rule out the construction of new coal fired power plants, the only way that coal plants would meet the 1,000 lb Co2/MW cap would be if they were fitted with special carbon capture equipment that could store the Co2 emissions underground. Although this technology is commercially available, it remains prohibitively expensive.  Coal currently supplies just under half of the nation's electricity needs and its proportion of the country's energy mix has been declining for a decade, while wind power and natural gas have been the fastest growing energy resources in recent years.

Coal industry supporters, some utilities, and many Republican politicians have voiced criticism over this rule and other EPA proposals, saying that such limits will harm the economy and drive electricity rates up.  In contrast, environmental groups have lauded the EPA's moves as evidence that the Obama administration is taking action to slow the growth of greenhouse gas emissions.

But leading energy analysts say that the new rule proposed by the EPA will not have a big impact on retail electricity prices, because very few utilities had new coal fired plants on the drawing board to begin with. This can be attributed to the current historic low price for natural gas. The rule will simply reinforce the existing trend of big utilities moving to natural gas for new electricity generation. "This standard isn't the once-and-for-all solution to our environmental challenges, but it is an important common-sense step toward tackling the ongoing and very real threat of climate change," said EPA's Administrator, Lisa Jackson.   

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