Compliance with Regulations and Replacing Coal Generation with Natural Gas and Renewables Led to Massive Decreases in SO2 and NOx Power Plant Emissions Over the Last 20 Years (1997-2017) - and Coming Reductions in Marine Fuel Sulfur Limits

Compliance with Regulations and Replacing Coal Generation with Natural Gas and Renewables led to Massive Decreases in SO2 and NOx Power Plant Emissions Over the Last 20 Years (1997-2017) – and Coming Reductions in Marine Fuel Sulfur Limits

The EIA just released a 20-year analysis (1997-2017) of SO2 and NOx emissions from power plants. 1997 was the year that emissions of both of these pollutants peaked. The two main reasons for the decrease are compliance with environmental regulations and switching from burning coal to burning natural gas and renewables for electric power generation. Increases in efficiency is another factor in the redcutions. The regs responsible for the decrease are the 1990 Clean Air Act Amendments (CAAA) and the 2005 Clean Air Interstate Rule (CAIR). CAIR was replaced in 2015 with the similar Cross-State Air Pollution Rule (CSAPR). These were federal regulations that required scrubbers to remove SO2 and other pollutants. These reductions in pollutants are clear regulatory successes that have aided human well-being and demonstrate that pollution reduction is achievable and is a public good. In the second part of the time period coal-fired generation dropped from a high of 2016 million MWh in 2007 to 1206 million MWh in 2017. Thus, it looks like the drop in SO2 and NOx from 2007 to 2017 is mostly a result of natural gas (and to a much lesser extent renewables) replacing coal in power generation with some improvements still coming from pollution abatement of coal plants. The coal-heavy Midwestern, Appalachian, and Southeastern states have benefitted the most in improved air quality. Texas also saw significant reductions. Burning natural gas produces very low amounts of NOx relative to coal and fuel oil and virtually no SO2. However, some of each pollutant is emitted in the production phase of natural gas mostly due to the use of diesel fuel in upstream operations. Renewables are, of course, the least emitting source of these pollutants among power production. 

Soon to be Implemented Marine Fuel Sulfur Limits in Open Seas

Another issue involving the reduction of SO2 worldwide will be coming limits to marine fuel sulfur which produces SO2. SO2 has been problematic in acid-rain production in the U.S. Northeast, Canada, Northern Europe, and other places. Since marine fuel is currently mostly high-sulfur diesel this will spur changes in the oil refining sector where de-sulfurization of fuels and utilizing lower-sulfur crude oils will occur. It will also likely increase the use of LNG for ships as a very low-sulfur alternative. Ships will also have the option of installing scrubbers and while that may save them money in the short-term it may be more costly later if tighter restrictions occur in the future. The standards are set by the International Maritime Organization (IMO), a 171-member state UN agency. The regs for sulfur content by percent weight in marine fuels for open seas are set to drop from the current 3.5% to 0.5% by 2020. This is a big drop. These reductions will also reduce nitrogen oxides (NOx) and other pollutants. It is uncertain whether they will affect shipping costs at this point, but it seems likely they will increase costs at east for a while. However, quite a few coastal areas deemed Emission Control Areas have already dropped emissions from 1% to 0.1% in line with previous IMO rules. This has mostly been in North American and European coasts with a few Chinese and African coasts as well. If the new rules cause refiners to devote more capacity to distillates for the bunker fuel (marine) market then that could affect availability and price of distillates which are already in high-demand for the trucking and heavy equipment markets.

References:

Changes in Coal Sector Led to Less SO2 and NOx Emissions from Electric Power Industry – by Cara Marcy (principal contributor), in Energy Information Administration (EIA), Today In Energy, Dec. 11, 2018

Coming Changes in Marine Fuel Sulfur Limits Will Affect Global Oil Markets – by Mason Hamilton (principal contributor) in Energy Information Administration (EIA), Today In Energy, Dec. 14, 2018