EPA Turns Lights Off on Texas Power Plant Project

Jan 28, 2013

Port of Corpus Christi. Photographer: Eddie Seal/Bloomberg.

Federal regulations have mothballed a proposed Corpus Christi, Texas power plant:

CEO Dave Freysinger, of Houston-based Chase Power Development, LLC, on Wednesday afternoon confirmed plans to cease operations, effectively orphaning the $3 billion petroleum coke-fueled electricity project that has faced an uphill battle in its quest for the necessary regulatory approvals.

“Chase Power ... has opted to suspend efforts to further permit the facility and is seeking alternative investors as part of a plan of dissolution for the parent company,” Freysinger said in a statement emailed to the Caller-Times.

You might remember my ongoing "It’s Great to Have a Job…" series of posts about how EPA regulations are causing power plants to shut down and workers to lose their jobs all over the country. This news from Corpus Christi, Texas is along the same lines but has a few wrinkles. First, the Las Brisas Energy Center would have been powered by petroleum coke—a byproduct of refining crude oil—not coal. Second, this power plant was only on the drawing board. It was having difficulty getting air and water permits before starting construction. Except for those working at the project’s financing company that’s shutting down, nobody lost their job.  

This doesn’t make this news any less outrageous. The project, backed by both the business community and labor unions, was supposed to create up to 3,900 jobs over its five-year construction, then directly and indirectly support as many as 275 jobs as the plant operated. The chance to create all those jobs is gone, and EPA is much to blame. More from the Corpus Christi Caller-Times:

Although financial conditions played a role in the decision, Freysinger said the project was the victim of an insurmountable regulatory framework erected by the U.S. Environmental Protection Agency, which has in recent years enacted stiffer carbon-based fuel permitting requirements while tightening standards on petroleum coke emissions.

“The (Las Brisas Energy Center) is a victim of EPA’s concerted effort to stifle solid-fuel energy facilities in the U.S., including EPA’s carbon-permitting requirements and EPA’s New Source Performance Standards for new power plants,” he said. “These costly rules exceeded the bounds of EPA authority, incur tremendous costs, and produce no real benefits related to climate change.”

The Caller-Times editorial board argues that economics is mostly to blame citing low cost natural gas produced from Texas shale formations. Under our free enterprise system the supply, demand, and costs of different energy sources fluctuate. But by picking energy winners and losers, EPA artificially makes some fuels uneconomical. For example, the proposed greenhouse gas rule was crafted to squeeze out coal and other fuel sources, and that's not the only example.

Excessive regulations doesn’t only stop projects like this from being built, it also gives a signal to businesses to not bother with certain projects in the first place. Las Brisas is a good example of the need to streamline the permitting process and regulatory reform to ensure rules are based on good data and sound science.

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