Dallas-based Luminant Calls Obama's Proposed Carbon Limits on Power Plants "Unworkable"

Categories: Biz

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Peter Ryan
Following through his pledge to confront a changing climate, which an international body of scientists now says with 95 percent certainty is caused by human activity, President Barack Obama's administration has announced limits on greenhouse gases emitted by power plants.

Nearly half of all energy-related greenhouse gas emissions come from power plants, particularly coal-fired ones. According to The New York Times, new power plants would be required to reduce their emissions to 1,000 pounds of carbon dioxide per megawatt hour for natural gas-powered plants, and 1,100 for coal. The story also indicates carbon limits for existing power plants are in the offing.

Dallas-based Luminant, Texas' biggest generator of electricity, was critical of the carbon limits. "These rules dictate unworkable standards for new coal plants and reflect EPA's picking of winners and losers among fuel sources, which is not authorized under the Clean Air Act," Luminant spokesman Brad Watson tells Unfair Park in an emailed statement.

Asked whether any of Luminant's newest power plants could meet the limits as they've been described so far, Watson replied simply, "No."

That major players in the industry like Luminant are reacting with alarm is no surprise. Limits for existing plants have yet to take shape, but those for new plants would require costly retrofits. With profit margins shrinking for existing coal-fired power plants due to the low wholesale price of electricity, there's little financial incentive to comply. As we noted earlier this week, Luminant just applied to idle units at yet another of its coal-fired plants because operating it from December to June would be a money-losing enterprise.

Indeed, along with robust power prices, the profitability of coal-fired plants (especially aging ones like Luminant's Big Brown and Martin Lake, the state's biggest polluters) depends upon their ability to externalize the byproducts of their operation cheaply -- in other words, to dump pollutants into the air. Martin Lake is already being sued by the U.S. Department of Justice for allegedly making major changes to the plant without installing new pollution controls, in violation of the Clean Air Act. Increase the cost of pollution and you'll see coal-fired plants shuttered across the country.

Watson says the kind of carbon-capture technology required to meet new requirements isn't proven or ready for large-scale, national deployment. Energy Future Holdings spokesman Allan Koenig adds that the company will spend $500 million "in environmental capital expenditures" between 2013 and 2017.

Complicating all of this for Luminant is the threat of looming bankruptcy. According to a DMN story, its creditors are meeting today in a "last-ditch effort" to determine whether they can hash out who gets what, how big a hit some of them will take, and if they can even agree on what the company is worth. Last time we checked, it was worth less than its liabilities.

An already complicated situation for Luminant and EFH just got much, much tougher.

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14 comments
Obummer
Obummer

Yo ‘nother tax on stupid peeps.

fracquestions
fracquestions

If Luminant is teetering on the verge of bankruptcy, then that should be all the proof the City of Dallas needs to deny the anticipated zoning change permit to drill for natural gas and build a refining and compression facility at Northlake. Obviously, Luminant is not financially solvent enough to pay for any damages it might cause when things go awry.

fracquestions
fracquestions

The story states, "Limits for existing plants have yet to take shape, but those for new plants would require costly retrofits."

My question is, why does a NEW plant require retrofits? Would not they design a new plant according to requirements of laws?

ElFlaco714
ElFlaco714

“If somebody wants to build a coal-fired power plant, they can. It’s just that it will bankrupt them,” Obama said, responding to a question about his cap-and-trade plan. He later added, “Under my plan … electricity rates would necessarily skyrocket.”  Apparently he intends to keep this one promise.

fracquestions
fracquestions

@ElFlaco714 So, you are willing to accept unhealthy air for lower electricity costs? Your choice may be okay for you, but for the rest of us it is not acceptable. Why should others suffer and die just so that you can pay a low price for energy? Are you really THAT greedy and self-centered?

schermbeck
schermbeck

@ElFlaco714 Except, you know, the Republican-inspired Cap and Trade idea never got off the ground thanks to the Tea Party. That's why these rules are being written instead. Keep your Fox-like tirades against regulatory GHG schemes straight please.

fracquestions
fracquestions

@ThePosterFormerlyKnownasPaul @fracquestions Ummm, Luminant is the one who has already indicated, about three months ago, their intention to apply for a zoning change at Northlake so they can drill wells and build the refinery and compression facilities there. Luminant, the City of Dallas and Lucy Billingsley negotiated a land swap early this year that would consolidate six Luminant land leases around Northlake into a single lease on the southeast corner of Northlake. 

Dallas Cothrum has publicly announced Luminant's intentions - Masterplan Consultants is the PR firm hired by Luminant to represent them in this matter at City Hall.

Do you know something about this matter that I do not know? If so, then please don't keep us in the dark. Let's hear it.

ElFlaco714
ElFlaco714

@schermbeck @ElFlaco714 Except, you know, reread my post, because it was not a tirade.  I only quoted your hero and Svengali.  He is the one who wants your electricity bill to skyrocket, and now he is advancing toward that end.  Enjoy those skyrocketing bills!

fracquestions
fracquestions

@ThePosterFormerlyKnownasPaul @fracquestions So, what is your point? Chief would be a subcontractor of Luminant in whose name permits would be issued. If the permit holder is bankrupt, then it would not matter whether or not they were the actual driller.

Surely you do not mean to imply that if a problem arose and Luminant was unable to cover the cost of mitigation due to bankruptcy that Chief would step up to the plate and cover those costs. If that is what you are implying, then I want some of whatever you are smoking!

You are attempting to confuse the facts by throwing in irrelevant information.

ThePosterFormerlyKnownasPaul
ThePosterFormerlyKnownasPaul topcommenter

@fracquestions @ThePosterFormerlyKnownasPaul 

The surface locations are owned by Luminant.  Chief Oil and  Gas would be the driller and operator.  I am assuming that when Billingsley purchased the property Luminant retained the mineral rights and let a lease to Chief Oil and Gas.  Luminant probably retained these surface parcels when they sold the North Lake property to Billingsley in order to have drills sites.

http://blogs.dallasobserver.com/unfairpark/2011/10/dallas_inches_closer_to_issuin.php


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