Reducing Coal Haze at National Parks

Note: This is a modified version of a paper I did for an environmental planning course this past semester.  I discussed some of the earlier stages in this project a while back.

Although coal-fired power plants provide about one half of America’s electricity today, they have become increasingly controversial in the past few years for a variety of reasons.  Perhaps the most prominent of the objections to coal as an energy source have revolved around its role in global climate change through emissions of carbon dioxide.  Even by the standards of other fossil fuels such as oil and natural gas, coal produces an enormous amount of carbon dioxide emissions, and many environmental groups have recently taken particular aim at coal as a contributing factor to climate change that can and should be stopped.  There is still considerable resistance to these efforts, however, both by the coal industry itself and by utilities and government officials who are in favor of coal because it is cheap, plentiful, and convenient.  One approach that tries to (at least rhetorically) find a middle path is the so-called “clean coal” movement, which is focused on finding technologies to increase plant efficiency and sequester carbon emissions.

Despite the prominence of the global warming angle, numerous other objections to coal have been voiced over the years.  Due to its chemical structure, coal contains an astonishing variety of pollutants in varying quantities, and many of these are released when it is burned.  Mercury and arsenic, although generally present in small quantities within coal, are among the most directly dangerous to human health, while sulfur dioxide is a bigger threat due to its presence in considerable quantities in certain types of coal.  Among the other threats are nitrogen oxides (NOx), which are not as directly harmful as the other pollutants but can be just as bad because of the byproducts they produce by reacting with other chemicals in the atmosphere when they are emitted.  These include ground-level ozone, which is very dangerous to humans in large quantities; acid rain; and particulate matter.  Also unlike most other pollutants, NOx comes not from inherent properties of the fuel being burned but primarily from the burning process itself and the complex chemical reactions that take place inside burners.  For this reason, options for controlling NOx emissions are potentially more flexible than options for controlling many other pollutants, since adjustments to combustion processes can result in significant emissions reductions even without the addition of expensive control equipment (although there is a limit to how much mitigation can be achieved this way).  Indeed, the experience of the US in regulating NOx emissions at power plants has shown that adjusting plant processes has been a surprisingly effective and inexpensive way for some plants to meet their obligations when regulatory regimes have allowed sufficient flexibility.

Beyond a certain point, however, significant reductions can only be achieved through the use of specialized equipment.  What sort of equipment is required depends on what level of emissions is considered acceptable for the situation.  Until the advent of market-based approaches in the late 1990s with a series of cap-and-trade systems mostly focused on the eastern states, regulation of NOx by the US Environmental Protection Agency (EPA), when it existed at all, consisted primarily of standards that, while theoretically performance standards limiting the amount of NOx emitted by particular facilities without specifying how they were to be achieved, in practice tended to be set at a level designed to be met by only one specific technological solution, usually so-called “low NOx burners” (LNB), which are relatively inexpensive and reduce NOx emissions by 30 to 50%.  Even now, after the cap-and-trade approach has become quite popular for controlling one specific effect of NOx emissions (elevated summer ozone in the eastern states), many facilities elsewhere in the US are still covered by such de facto technological standards.

Some of those facilities have still other issues beyond ozone and acid rain to deal with.  Specifically, there are two coal-fired power plants in the Southwestern US that are in close proximity to many national parks and other scenic natural areas that attract considerable tourism.  One of these, the Four Corners Power Plant (FCPP) in Fruitland, New Mexico, has the highest annual NOx emissions of any facility in the United States.  The other, the Navajo Generating Station (NGS) in Page, Arizona, also has very high emissions of NOx.  A major concern with these levels of emissions of NOx, along with particulate matter both emitted directly by these two plants and produced by the emitted NOx through chemical reactions in the atmosphere, has long been a persistent haze that reduces visibility at the national parks and other scenic areas in the region.  The results are objectionable to many, including environmental groups and local residents, on both an aesthetic and an economic basis, due to the damage to views and resulting loss of tourism.  Human health effects are not often mentioned in this context, although particulate matter is known to be very dangerous to humans in large quantities.

This issue has been addressed in federal legislation on air pollution issues starting with the original Clean Air Act, which set fixing existing visibility problems and preventing new ones as an explicit national goal.  Due to longstanding difficulties with judging the scientific data, however, which were not effectively resolved until a study by the National Academy of Sciences in 1993 prompted by new requirements in the 1990 Clean Air Act Amendments, EPA did not promulgate actual regulations on the issue until 1999.  After a lengthy legal process, a revised set of regulations issued in 2005 was upheld by the courts.  These regulations are on a regional basis, however, and do not address specific sources.

The issue of haze resulting from generation at FCPP and NGS specifically has another complication, in that both plants are located on the Navajo Indian Reservation and are thus under direct EPA authority rather than the authority of the environmental regulatory agencies of New Mexico and Arizona.  Since it has the responsibility for carrying out actions to deal with haze at these to plants, EPA published an Advance Notice of Proposed Rulemaking (ANPR) in the Federal Register on August 28, 2009 soliciting input from all stakeholders and any other interested parties on how best to approach the issue (EPA 2009).  No official action seems to have been taken since then, but the process of reviewing the comments in response to the ANPR and formulating a proposed rule and Federal Implementation Plan (FIP) for each plant is presumably ongoing.

Since the ANPR is a preliminary action and not a formal proposal, it does not contain specific judgments about EPA’s preferred options.  It does, however, discuss the factual background of both plants, their existing control equipment, and the results of computer modeling done by both the plant’s owners and EPA to determine the potential emissions reductions and costs from various strategies.  For NOx control, two main options are considered, with some variations depending on the specific circumstances at each plant: LNB and Selective Catalytic Reduction (SCR), a more expensive but much more effective process involving an add-on unit that cleans NOx from the emissions after combustion with the capability of removing 80% or more of the NOx.  Although it has not been used at NGS or FCPP, SCR is a common technology used for NOx control in many coal plants (Franco and Diaz 2009).   The ANPR also addresses direct emissions of particulate matter, but this analysis will focus exclusively on NOx control.

Since the goal of EPA’s ANPR is to determine the Best Available Retrofit Technology (BART) for reducing haze, in preparation for mandating the use of that technology, a lot hinges on the differences between LNB and SCR and the way those differences affect the determination of which qualifies as BART.  In effect, the choice is between the low cost but limited capabilities of LNB and the much higher cost (both absolute and per unit of emissions reduced) but much greater effectiveness of SCR.  Note that market-based approaches such as cap-and-trade, while used elsewhere to great effect in managing NOx emissions, are not reasonable in this context because of the limited scope and distinctive nature of the problem, which greatly constrain EPA’s ability to offer flexibility in resolving the haze issue.

Since SCR is both more expensive and more effective, this analysis will focus on it and look at the advantages and disadvantages of EPA designating it the BART for these two plants.  Although there is some quibbling in the ANPR over the modeling done by the plant owners, which uses some inputs different from those preferred by EPA in its own modeling, the scientific facts behind the differences in effectiveness of the two options are not seriously disputed.  Indeed, one of the criticisms EPA makes of the owners’ models is that they overstate the effectiveness of SCR.  Despite this criticism, however, it is quite apparent from the ANPR that EPA is generally more in favor of SCR as a solution, which is unsurprising given the marked difference in effectiveness between the two options.  Thus, as explained further below, the most important factor of the three considered here to the resolution of this problem is likely to be the reaction of non-governmental stakeholders, particularly the plant owners and environmental groups, to whatever choice EPA makes.  The idea that SCR represents “stronger” control over haze than LNB is taken as given, as no one seems to dispute it.

Policy criteria and stakeholders relevant to this issue are listed below, along with the advantages and vulnerabilities of mandating SCR with regard to each.

• Reaction of elected officials and staff
  • Advantages:
    • EPA seems strongly inclined to favor SCR
    • National Park Service (NPS) and USDA Forest Service (FS), which manage the parks and wilderness areas affected by haze, are also likely to favor strong controls
    • Some local governments, especially those affected by the haze themselves, may favor strong controls
  • Vulnerabilities:
    • The Navajo and Hopi tribal governments, which get royalties from coal mining and have many tribal members who work at the plants and the coal mines that supply them, both have factions strongly in favor of coal and likely to oppose any strong controls
    • Some local governments, especially in Arizona, get much of their power from the plants, and some are supplied with water from the Colorado River pumped to them with power supplied by NGS, so they may be concerned about possible increases in electricity and water prices resulting from higher costs for emissions controls
    • The US Bureau of Reclamation owns 24.3% of NGS, and may stand with the other plant owners in opposing costly retrofits
• Reaction of nongovernment stakeholders
  • Advantages:
    • Local and national environmental groups such as the Sierra Club and the Grand Canyon Trust are strongly in favor of haze reduction and intensely opposed to coal
    • Many local residents and frequent visitors to the parks are likely to support haze reductions
    • Some media outlets may pick up on the tourism and natural beauty aspects of the issue and promote strong controls
    • Commercial vendors of SCR systems are likely to be strongly in favor of a new market for their products
  • Vulnerabilities:
    • The owners of the plants, mainly private utility companies in Arizona, New Mexico, Nevada, and Texas, are likely to vigorously oppose any attempts to impose the expensive SCR option, which will cut into their profits and conceivably even make their plants so unprofitable that they will be forced to shut down
    • Some consumers in places where water and power supplies are strongly linked to these plants may oppose any controls that they think will increase their utility bills
    • Media outlets in places dependent on the plants for water and power may emphasize the threat of increased costs in their coverage of the issue
• Human and ecological health
  • Advantages:
    • SCR is much superior to LNB in reducing haze according to all modeling mentioned in the ANPR
  • Vulnerabilities:
    • Use of certain types of catalysts in SCR can increase emissions of sulfuric acid from plants
    • At NGS, use of SCR would require daily delivery of ammonia by truck, with resulting impacts on local air quality and carbon dioxide emissions
    • Use of SCR reduces energy efficiency, requiring larger amounts of coal to be burned to maintain a constant output of electricity, which would increase overall emissions of carbon dioxide and other pollutants
• Economic costs and benefits
  • Advantages:
    • Improved visibility at parks will encourage more tourism, an important part of the regional economy
    • Increasing costs of coal power generation may ultimately be beneficial to the area by decreasing current economic dependence on fossil fuel extraction and power generation
  • Vulnerabilities:
    • SCR will be very expensive to implement, and will likely increase electricity costs, both through the cost of installing the system and to a lesser degree through the reduction in efficiency
    • If costs increase too much, coal plants may become too expensive to operate and may close entirely, with significant effects on the local governments and populations which are heavily dependent on the plants economically
    • Since much of the power from NGS is used to pump water from the Colorado River to Phoenix, water could potentially become much more expensive there if electricity prices increase dramatically as a result of SCR implementation
• Moral imperatives
  • Advantages:
    • Environmental stewardship concerns argue for reducing impacts to public lands, including visibility impacts from coal haze
    • In addition to the haze issue, coal generation has many deleterious effects on human and ecological health, and to the extent that the visibility rules increase the cost of coal power relative to other power sources they will contribute to a much-needed shift in energy use more generally
  • Vulnerabilities:
    • The impacts of increased costs to generation, possibly even leading to plants shutting down, will fall disproportionately on the Native American population in the local area, which is a significant environmental justice concern
    • Visibility could be characterized as more of an aesthetic than a public health or environmental concern, which for many people may make it less important than other values such as the economic vitality of the local area or the need of customers elsewhere for cheap and reliable electricity and water
• Time and flexibility
  • Advantages:
    • These regulations were supposed to be developed and implemented long ago, and EPA has a legal obligation to deal with the visibility issue as soon as is practicable
    • The full value of the public lands in the area cannot be realized until the haze is gone, which should therefore happen as soon as possible
    • Current reliance on coal for power generation is so problematic that any measures to discourage it should be implemented as soon as possible
  • Vulnerabilities:
    • Unlike many environmental contamination issues, visibility is not something that gets worse over time; the amount of haze is a function of the current amount of coal being burned and the type of combustion used, and it will decrease as soon as mitigation measures are implemented, so there is no particular rush or urgency to implementing those measures
    • Given the major economic impacts possible from implementing SCR, it should not be done prematurely and should only be implemented once adequate responses to its cost and economic effects can be developed

As noted above, the scientific evidence of the superiority of SCR in controlling haze seems to be settled, and even the possible drawbacks from an environmental perspective are unlikely to make much difference in the choice, since LNB has similar drawbacks in terms of possible increases in other pollutants.  Time and flexibility are also unlikely to be decisive, since the timing of an action like this is unusually flexible.  These regulations have been in the works for literally decades, but since the issue is one of visibility at a given time rather than the accumulation of pollutants over time, as soon as significant mitigation is put into place the situation will improve, regardless of when that is.  Moral and ethical considerations are less straightforward, since as is typical with controversial environmental policy issues there are conflicts of fundamental values involved.  The main weakness of the argument for SCR over LNB is that the concern for visibility can easily be characterized as prioritizing aesthetics over economic efficiency and equity.  This is particularly troublesome since many of the people most likely to suffer the economic consequences of more expensive mitigation are Native Americans from the Navajo and Hopi tribes who are very poor and dependent on the royalties and jobs involved in coal mining and plant operation on their reservations.  This environmental justice issue is a bit different from some other contexts in which environmental injustice can be identified, but it is no less real for that, and it is also closely tied to the criteria of economic costs and benefits and governmental reactions.  Nevertheless, there is a certain element of inevitability to the conflict of values involved here, and it will not go away regardless of the EPA’s decision on this issue, so it is unlikely to be the deciding factor.

Economic costs and benefits are really at the heart of this issue, and closely connected to the reactions of non-governmental stakeholders (and, to a lesser extent, those of governments too).  The main difference between LNB and SCR from the perspective of the plant owners, after all, is that SCR is much more expensive.  It does reduce haze and visibility problems much more effectively than LNB, but as the modeling described in the ANPR shows, even when measured per unit of improved visibility SCR is much more expensive than LNB.  It is the only serious option for reducing haze to the extent preferred by environmental groups, but the costs are considerable.  This has led the plant owners to lobby hard against SCR, even putting out misleading statements about the likely effects of instituting it, as described below.

The governmental positions seem relatively straightforward, with EPA and the land management agencies strongly in favor of SCR and some local and tribal governments possibly opposed, but since EPA’s authority  is well-established on this issue it is unlikely that other governmental entities will have a whole lot of input on either side.  The most important criteria seem to be the reaction of non-governmental stakeholders, especially the owners of the plants, and economic costs and benefits, both of which are discussed in detail below.  A list of the criteria in order of importance would likely go something like this:

1. Reaction of non-governmental stakeholders
2. Economic costs and benefits
3. Moral imperatives
4. Reaction of elected officials and staff
5. Human and ecological health
6. Time and flexibility

As noted above, the most important of the six policy criteria in determining the EPA’s decision on whether to require SCR at FCPP and NGS are likely to be the reactions of non-governmental stakeholders and the economic costs and benefits involved in implementing SCR at the plants.  Since the most important stakeholders are likely to be the plant owners, whose concerns are based almost entirely on economics, these two criteria are really not separable in any meaningful way.  Instead, the reactions of the plant owners are inextricably tied to their perceptions of the economic costs involved in this proposed requirement, while the reactions of other non-governmental stakeholders such as environmental organizations are also connected to economic issues (as well as ecological and aesthetic issues) in a somewhat more indirect manner.  Because these two criteria are so closely connected, the discussion below mostly considers them together.

Starting with the non-governmental stakeholders, these are primarily the plant owners (described in detail below) and environmental advocacy groups, although local citizens and the media are also likely to have some effect on the decisionmaking process.  The economic issue at stake is primarily the cost of implementing SCR as compared to LNB, although the indirect effects of this increased compliance cost on the viability of plant operation is a concern as well on both sides, and the economic benefits to the local area from increased tourism resulting from decreased haze is also a relevant issue (especially to local residents), although it is hard to predict and of limited interest to the most influential stakeholders.  The ANPR discusses economic modeling done by EPA, the plant owners, and the National Park Service (NPS), and it concludes that SCR is indeed much more expensive than LNB, although the exact relationship varies considerably in the different models due to their different assumptions, but it is very unlikely that the increased cost will be too much for the plants to absorb.  The plant owners dispute this conclusion vehemently, but they do not provide much evidence, even in their own modeling, to demonstrate that their dire predictions of compliance being an impossible cost burden like to force closure of the plants are plausible.  Interestingly, however, the environmental organizations pushing for more stringent emissions control seem happy to agree with the plant owners that implementing SCR may cause their plants to close down, but they see this as a good thing.  SCR can reduce plant NOx emissions by 80% or more, but plant closure, of course, would reduce it by 100%.   Even if the effect is not so dramatic, and EPA seems strongly inclined to believe that it will not be, from the environmentalist perspective any increase in the cost of coal power is good, because coal is generally considered the most environmentally problematic fuel (at least from the perspective of climate change and local health effects), and any increase in the cost of using it can only encourage the use of cleaner fuels.

Calling the plant owners all “non-governmental” is actually a bit of a misnomer, as one of the major owners of NGS (24.3%) is the US Bureau of Reclamation (BoR), a federal government agency.  Nonetheless, the BoR does not play an active role in the management of NGS, which is run by one of its other owners (21.7%), the Salt River Project (SRP), an electric and water utility serving large parts of central Arizona.  The remainder of the plant is owned by the Los Angeles Department of Water and Power (21.2%); Arizona Public Service (APS), another Arizona utility company (14%); Nevada Power Company (11.3%); and Tucson Electric Power (7.5%).  FCPP is operated by APS, which owns 100% of three of its five units and 15% of the other two.  The other owners of those two units are Southern California Edison (48%), Public Service Company of New Mexico (13%), SRP (10%), El Paso Electric Company (7%), and Tucson Electric Power (7%).  In practice, the main stakeholder for NGS is SRP and the main stakeholder for FCPP is APS, as these are the companies that operate the plants as well as owning substantial portions of them.

These companies are unlikely to go along quietly with attempts by EPA to force them to install the very expensive SCR systems that the ANPR seems to lean in favor of, and a hint of their reaction can be seen in a news story in the Arizona Republic, the main newspaper in Phoenix, that was published soon after the ANPR was issued.  In this story SRP representatives are quoted frequently expressing outrage at having been “surprised” by the EPA “forcing” SCR on them, and they make ominous predictions about the effect an SCR mandate could have on the cost of water in Phoenix.  The water issue comes in because while NGS does not produce a very large amount of power, much of the power it does produce is used to pump water uphill through a canal from the Colorado River to the Phoenix metropolitan area, which has grown rapidly in recent decades and has long since outstripped its local water resources.  According to SRP representatives quoted in the article, installation of SCR at NGS could be so expensive that it would become unprofitable to operate the plant.  If it did shut down, the power to pump water through the canal would have to be purchased on the open market, which would make it so much more expensive that water suppliers would be unable to absorb the cost and the cost to consumers would skyrocket.

It is telling that the article does not contain any quotes from EPA responding to these allegations (the “other side” is represented by environmental groups who do not sound at all sad at the prospect of the regulations forcing coal plants to shut down), as a look at the ANPR itself clearly shows their exaggerated nature.  EPA is not, at this point, “forcing” anything on anyone.  The ANPR is an attempt to get input on issues pertaining to a future rulemaking, and while that future rule would be binding and probably not very comfortable for the plant owners financially, the modeling discussed shows a more nuanced picture of the financial realities than the article portrays.  Indeed, separate financial modeling by the NPS shows significantly lower costs for SCR than either the EPA’s models or those of the plant owners.  Also, since SCR is a widespread technology used at many coal plants, it is not clear just why SRP thinks that installing it at NGS would be such a major blow to the facility’s viability, and it is easy to conclude that the real concern is the substantial blow it would be to SRP’s profits.  Overall, this article is a valuable look at the attitudes of the plant owners but otherwise a somewhat misleading take on the issue as a whole.  It is important, however, as an example of how the issue may be covered in areas dependent on the power and water provided by the plants in question, areas that are mostly rather far from the plants and the parks directly affected by the haze.

The other major non-governmental players are environmental organizations, both national (e.g., the Sierra Club) and local (e.g., the Grand Canyon Trust).  These groups have been pushing hard on this issue for a long time, and they recently petitioned the Secretaries of Agriculture and the Interior to chime in on the effects of the haze on the national parks and forests in the area, presumably as part of the process of influencing the EPA’s decision-making process on a final rule.  While the plant owners are likely to push for LNB as an alternative to SCR, the environmental groups can be counted on to push back hard, and to emphasize the clear-cut evidence from the emissions modeling showing the much more significant reductions in haze associated with SCR use as compared to LNB.  Although these organizations are not always well-liked in the rural Southwest, they have a lot of political clout on a national level, and if they make this a priority, as many of them seem to, they can be counted on to fight hard for stringent regulations.  The contest between the plant owners’ push for less regulation and the environmental groups’ push for more is likely going to be the key factor in determining how EPA formulates its final rule.

Franco, A., & Diaz, A. (2009). The future challenges for “clean coal technologies”: Joining efficiency increase and pollutant emission control Energy, 34 (3), 348-354 DOI: 10.1016/j.energy.2008.09.012

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