New EPA Rule Could Disrupt Primary Reason America Leads World in Emissions Reductions

Amanda Eversole
Posted May 12, 2023

Over the past 15 years, the United States has achieved something truly remarkable: We have led the world in oil and natural gas production while simultaneously leading the world in emissions reductions. 

How is this possible? 

It’s largely the result of low-cost natural gas displacing coal in the power sector, a market-driven trend increasingly complemented by rising renewable energy generation. It’s an emissions success story that has benefited the U.S. economy and communities across the nation, fostering a cleaner and more flexible electricity grid without sacrificing reliability.

Unfortunately, newly revised power plant greenhouse gas (GHG) emissions rules announced Thursday by the Biden administration could disrupt that trend by discouraging new investment and accelerating early retirements of much-needed dispatchable and reliable power generation. 

Worse, the rules come at a time when reliability concerns are already emerging and broad pushes for electrification are poised to significantly increase electricity demand, thereby intensifying the risks associated with this heavy-handed approach.

API and our nearly 600 member companies agree on the need to reduce emissions, including in the U.S. power sector. To date, most of those reductions have been the result of switching from coal to natural gas, but we recognize the critical importance of renewable energy and promising early-stage low carbon technologies to drive further emissions reductions. 

Still, given the essential need for reliable electricity in our everyday lives, forcing cost and reliability to take a backseat to emissions considerations is a dangerous approach. A reliable, low-cost and low-carbon electricity grid requires flexible, dispatchable generation based on proven and scalable technologies. Policies should recognize this. We’ll be reviewing the proposed rule through that lens.

Make no mistake: The EPA proposal announced Thursday seeks to change how the U.S. generates electricity. It follows a recent EPA proposal on tailpipe emissions seeking to change and limit which cars Americans can buy.

Both are massive, unprecedented regulatory interventions in how Americans produce and consume energy. Both also discourage investment in U.S. natural gas and oil projects at a time in which American energy is needed more than ever. 

Bottom line: This sends the wrong signal at the wrong time. 

API is reviewing the rule in its entirety and remains committed to working with policymakers to develop regulations that protect the environment, promote grid reliability and support U.S. energy security.

In the meantime, here are some energy realities to remember as your office answers questions from fellow policymakers, the media and constituents about the new EPA power plant GHG emissions proposal:

Energy Reality #1 – The Shift to Natural Gas Led to Reduced Emissions

• Switching from coal to natural gas for power generation is the key reason emissions from the U.S. power sector are in decline. Between 2005 and 2021, about 60% of CO₂ emissions reductions came from fuel-switching to natural gas.
• Recent EPA data has confirmed that overall U.S. emissions aren’t the only thing in decline; total GHG emissions from the operation of natural gas systems dropped 12% from 1990 to 2021 even as natural gas production in the U.S. nearly doubled.
• The EPA data complements data from the U.S. Energy Information Administration showing that CO₂ emissions drop as the mix of electricity generation further shifts from coal to natural gas.

Energy Reality #2 – Power Grid Operators and Utilities Want More Natural Gas 

• The switch away from coal to natural gas for power generation has been underway for many years, both here and abroad.
• Last year, the European Parliament deemed natural gas investments climate-friendly and European Commissioner for Energy Kadri Simson acknowledged the role of liquefied natural gas in bolstering Europe’s security as they meet their many energy challenges.
• U.S. power generators also want more natural gas. At a recent conference, an executive with the Edison Electric Institute said: “I have members who will spend the next decade exiting from coal. … That means we are going to be dependent on natural gas, which is flexible.”

Energy Reality #3 – Successful Environmental Breakthroughs are Driven by Industry Innovators

• The blueprints for successfully reducing emissions and creating low carbon technologies are being written by America’s natural gas and oil companies. U.S. producers are achieving real results in reducing methane emissions through The Environmental Partnership, and API’s Climate Action Framework details actions to meet the dual energy and climate challenge, including accelerating technological innovation and advancing cleaner fuels.
• American companies are also leading in the development of promising early-stage technologies like carbon capture, utilization and storage, which the Intergovernmental Panel on Climate Change says is central to reducing GHG emissions globally.
• We’re poised to lead in producing hydrogen and cleaner transportation fuels, such as sustainable aviation fuel. The world’s most ambitious projects to develop new technologies to create cleaner fuels and reduce emissions are being executed by American oil and natural gas companies – not by federal agencies in Washington.

The focus of America’s long-term energy strategy should be increasing – not restricting – development and production of natural gas and oil. The pursuit of greater supplies of oil and natural gas starting with the Shale Revolution spurred a new day in technology and efficiencies that benefit the environment. As a result, America has become the model for the rest of the world on emissions reductions. The course is being charted by America’s natural gas and oil producers.