Fox News Misrepresents EPA Climate Rule

Fox News reporter Doug McKelway falsely reported that EPA's proposed greenhouse gas rule requires coal plants to install carbon capture and storage technology and could shut down up to 25 percent of coal-fired power. In fact, the rule applies only to future coal plants, which few companies planned to build anyway due to competition from natural gas.

Rule Applies Only To Future Power Plants

Fox News Misrepresents EPA Rule Limiting Greenhouse Gas Emissions From Coal Plants. During Fox News' America's Newsroom, Doug McKelway falsely reported that “The new rules require coal-fired plants to install new technology called carbon capture and storage, but it's tremendously expensive and not commercially available.” McKelway also stated that “people across the spectrum of politics and industry fear the regulations will shut down as many as 20-25 percent of coal-fired plants,” and that “A lot of those people” who work in the coal industry are “really fearing for their jobs.” [Fox News, America's Newsroom, 5/10/12]

Rule Does Not Affect Existing Coal Plants. As Politico reported, the proposed rule “doesn't limit greenhouse gas emissions from existing power plants. [EPA Administrator Lisa] Jackson said if the agency proposes a standard for existing plants in the future, it would be after an 'extensive' and transparent public process to set limits that 'avoid inconsistent requirements' and are 'achievable.'” [Politico, 3/27/12]

Few Companies Planned To Build New Coal Plants Anyway

Major Coal-Powered Utility Said New EPA Rule “Won't Have Much Of An Impact” On Business. American Electric Power, one of the largest U.S. utilities, told the National Journal that the new EPA rule “doesn't cause immediate concern” for the company:

Even one of the nation's most coal-reliant utilities, Ohio-based American Electric Power--which has come out in fierce opposition to many other Obama EPA rules--says climate-change rules for new plants probably won't hurt the company's bottom line.

“We don't have any plans to build new coal plants. So the rules won't have much of an impact,” said Melissa McHenry, a spokeswoman for the company. “Any additional generational plants we'd build for the next generation will be natural gas. It will shape sources for new generation. But in the near term, the impact will not be as great. It impacts the ability to expand the use of coal for electricity, but it doesn't cause immediate concern for us.” [National Journal, 3/26/12]

Duke Energy: EPA Rule “Means Nothing To Us.” reported:

Duke Energy (NYSE: DUK) has two new coal plants -- not subject to the EPA emissions cap -- slated to come on line at the end of this year, along with two new natural-gas plants. The company plans to spend $7 billion on the four plants, which will result in rate increases for its customers in the coming months.

Still, Duke, which has utilities that serve North Carolina, South Carolina, Indiana, Kentucky and Ohio, says it has no plans for new coal projects beyond the two plants already in the works. Tom Williams, director of external relations for Duke, added that the company will look at natural gas, nuclear energy and upgrades to existing coal plants instead.

“This proposal means nothing to us,” he said. “Our carbon profile is going down. We're shutting down 3,800 megawatts of coal and [the new plants] we're bringing on will replace that with lower carbon emissions,” Williams said. [, 3/27/12]

The Economist: “New Rules Will Only Formalize A Shift That Has Already Been Under Way.” From a March 31 article by The Economist:

Lobbyists for the coal industry immediately declared that the Obama administration was “driving up energy prices and destroying jobs”. In fact, low gas prices, along with sluggish demand for electricity in the aftermath of the recession, have kept power prices subdued (petrol prices are another matter). For some time now utilities, faced with falling gas prices and the prospect of stricter environmental regulation, have been favouring gas over coal anyway. So the new rules will only formalise a shift that had already been under way, with little immediate economic impact. [The Economist, 3/31/12]

Contra Fox, EPA Rule Will Have Little To No Impact On Electricity Rates

Fox Airs False Claim That Rule Would Increase Electric Bills “At Least ... 30 Percent.” During the segment, Fox aired video of Craig Jennings, the Preston County Commission President, stating: “They're telling us that you're going to see at least a 30 percent increase in your electric bill now.” Fox did not clarify who “they” are. [Fox News, America's Newsroom, 5/10/12]

Brookings Economist: “EPA Rule Will Have No Significant Effect On Electricity Prices.” Syracuse University economics professor and Brookings Institute Senior Fellow Peter Wilcoxen said that “the EPA rule will have no significant effect on electricity prices”:

The idea that the new regulations will shut down the coal industry is nonsense. The new rules only bear on new power plants (and exempt those already in the planning stages), so existing coal-fired power plants are unaffected and can continue burning coal.

One might argue that the ruling will limit the *growth* of the coal sector but that's not correct either: coal's growth would be very limited anyway due to the low cost of natural gas and the very high capital cost of new coal plants. To put it simply: the life-cycle costs of coal-fired power are considerably higher than gas-fired power. This is not a theoretical matter: over the last decade, the electric power sector has responded by adding more than about 200 gigawatts of gas-fired capacity and about 2 gigawatts of coal. The US now has considerably more gas-fired capacity than coal-fired capacity and low gas prices will accelerate that trend even without the EPA decision.

Finally, because it only rules out an expensive option that wouldn't have been used anyway, the EPA rule will have no significant effect on electricity prices. [Email to Media Matters, 4/2/12]

Harvard's Robert Stavins: Given Low Natural Gas Prices, New Coal Regulation “Will Have Absolutely No Effect Whatsoever” On Electricity Prices. Professor Robert Stavins, Director of Harvard's Environmental Economics Program and a proponent of more market-based approaches to greenhouse gas regulations, explained that as long as natural gas prices remain low, there will be no new coal plants under construction. Therefore, EPA regulations on new plants will have “absolutely no effect whatsoever” on the price of electricity. He also noted that under these conditions, the new rule will have no environmental benefits. [Phone conversation with Media Matters, 4/2/12]

Bipartisan Policy Center: Rule Will Have “Very Little, If Any, Impact” On Electricity Rates. Jennifer Macedonia of the Bipartisan Policy Center wrote:

The rule is neither expected to reduce huge amounts of carbon emissions, nor will it kill a swath of power plants. In fact, the proposed regulation will have very little, if any, impact on actual power plants, jobs, electricity rates, or pollution. Still, it represents an historic step in the debate over actions to curb climate change and in the long term future of coal-fired electricity generation. [Bipartisan Policy Center, 3/30/12]