TORONTO (miningweekly.com) – NYSE-listed Arch Coal has filed comments expressing concerns about the US Environmental Protection Agency's (EPA’s) proposed Clean Power Plan.

The EPA’s public comment period on its proposed clean power plan ended Monday with more than 1.6-million comments submitted since being announced in June.

The proposed plan would cut carbon emissions from the power sector by about 30% from 2005 levels by 2030. The plan also laid out state-specific goals for lower carbon emissions.

In May, the US Chamber of Commerce issued a report saying the EPA’s proposed plans would cost the US more than $50-billion a year between now and 2030. The EPA called the report “nothing more than irresponsible speculation based on guesses”.

In the wake of stubbornly low coal prices, a global supply glut and competition from natural gas, many North American operators had in recent months idled unprofitable mines, including top US miners such as Alpha Natural Resources, Consol Energy, Walter Energy and Patriot Coal.

Arch Coal senior VP of strategy and public policy Deck Slone on Monday said current promulgated regulations were expected to drive the shutdown of as much as 20% of America's coal-based electricity generation fleet – the primary source of baseload power generation in the US.

“That's an unprecedented change to America's power system in what constitutes the blink of an eye in energy markets – creating enormous potential for market disruptions, supply shortages and rate spikes. Now, before this current round of closures has even run its course, EPA is preparing to step on the regulatory accelerator once again with the proposed Clean Power Plan. Such a move threatens to ratchet up the risk still further,” he commented in a statement.

Slone pointed out that the US grid was already showing signs of strain, as witnessed last winter when large sections of the US were pushed to the brink by bitterly cold weather and surging power demand.

The EPA’s Clean Power Plan was expected to drive double-digit increases in electricity rates in most states. Given the long lead times and high capital costs required when adding capacity, the damage associated with another wave of power plant closures could take years to address and reverse.

"Along with the huge risks it poses to the grid and the economy, the Clean Power Plan is also likely to prove counterproductive to the EPA's stated objective of addressing global climate concerns," Slone noted, adding that every "serious" forecast projected that fossil fuels would supply more than two-thirds of the world's primary energy needs through mid-century and beyond. 

As a result, low-carbon fossil fuel utilisation technologies would be indispensable to any real effort to stabilise greenhouse-gas (GHG) concentrations in the atmosphere.

“But the EPA is proposing a rule that will undermine new power sector investments in coal as well as natural gas even as it slows economic growth and damages US competitiveness.

"As the administration has acknowledged, the proposed Clean Power Plan won't have any discernible impact on GHG concentrations. There is a way forward for addressing climate concerns, and that is through robust investment in advanced technologies for coal and other fossil fuels. We strongly encourage the administration to withdraw its proposal and move towards a more rational and effective approach,” Slone explained.