Purchasing and Negotiation Training

Robert Menard
Certified Purchasing Professional,
Certified Professional Purchasing Consultant, Certified Green Purchasing Professional, Certified Professional Purchasing Manager

In June 2014, after many months of hearings and deliberations, the U.S. Environmental Protection Agency (EPA) proposed drastic reductions in carbon dioxide (CO²)  emissions from the electric generation power plants in the United States.  According to James Osborne , staff writer for the Dallas Morning News,(DMN) Texas officials are nonplussed as to a response in his story published 06 August 2014. 

Lawyers are the greatest beneficiaries of this EPA decision.  Texas has coal mines, natural gas and, oil wells, solar, and wind farms.  Yet, EPA modeling suggests that coal generation would be cut by 50% by 2030 and replaced by natural gas plants plus a 150% increase from solar and wind sources.  What market forces are at work here? 

The State of TX may not comply and indeed sue the federal government.  The Texas Railroad Commission  (which, despite its name, has major control over energy production) Chairman Barry Smitherman worries that the state’s coal fired electric power generation would be cut in half by 2030 under proposed EPA regulations. The largest electric utility in Texas is Dallas based Energy Future Holdings (EFH)  now working through a complicated bankruptcy, would most likely be forced to close coal fired generation plants while Houston based Calpine  supports the EPA regulation.  Calpine generates natural gas fired plants exclusively. 

In between these extremes, Houston based NRG Energy  is in process of a clean coal projects on one of its plants and is ambivalent about the EPA statements.  The umbrella organization, the Association of Electric Companies of Texas stresses that coal plants cannot be economically converted to other fuels.    

Quo vadis?

The DMN story cites a total of 1,298 pounds of carbon dioxide (CO²) produced for every megawatt hour of electric energy and compares this to 650,000 747 jets.  EPA wants to reduce that total by 30% by 2030 which would shutter many existing plants and drastically drive up the cost of electricity.  This is the equivalent of a hidden carbon tax that will fall most disproportionately and do the most damage on the poor and economically depressed class.   

As currently constituted, the EPA has made coal its whipping boy.  EPA is artificially influencing the energy market by penalizing coal use in favor of the growing wind, solar, and natural gas sectors.  Ironically, the proliferation of natural gas production has driven down prices which has slowed some exploration.   

Litigation to follow – stay tuned!