NATURAL GAS SUPPLY ASSOCIATION

CONTACT: Charlotte LeGates

PHONE: 202/326-9316

FAX: 202/326-9334

E-MAIL: clegates@ngsa.org

Natural Gas Producers Praise EPA's First Application of Fuel-Neutral, Output-Based Standards to New Generating Facilities

WASHINGTON, DC -- The Natural Gas Supply Association had high praise today for the Environmental Protection Agency's (EPA's) proposal on New Source Performance Standards (NSPS). "This proposal, which puts all new boilers on the same measurement scale, no matter what type of fuel they use, is an economically defensible, competitive standard," said Bruce Craig, NGSA's director of utility and environmental affairs.

The proposal, which applies only to the new construction of utility and industrial steam generating units, which produce electricity, marks the first time EPA has applied so-called "output-based standards" to utilities.

(The output-based standard regulates emissions on the basis of the amount of electricity the facility produces. In this case, it limits nitrogen oxides (Nox) on the basis of the number of kilowatt hours of electricity produced. Previously, utilities have been regulated only under "input-based standards," which permit utilities that use higher-polluting fuels like coal to emit greater quantities of pollutants than are permitted for similar-sized utilities that use lower-polluting fuels like natural gas. The EPA has used output-based standards in other instances; for instance, car emissions are frequently measured on the basis of number of grams of pollutant per mile driven. Some industrial engines have also been held to output-based standards. Many coal-based utilities have objected to their application to utilities, however.)

"Natural gas producers have long sought this type of fuel-neutral regulation," said Craig, "to enable gas to compete equally with coal as a generation fuel." Adoption of the EPA proposal could increase natural gas demand by approximately 200 Bcf annually by 2010.

"Utilities and other generators must consider a number of factors when deciding about new capacity," Craig explained. "In the past, the regulatory structure has favored coal, allowing new coal facilities to pollute more than facilities using other fuels. Gas has not been able to compete for utility business on the basis of what should have been one of its most competitive attribute: its low-polluting, high-efficiency qualities. This new proposal is the first regulatory step in permitting gas to compete head-to-head with coal for new generation."

This page was last updated August 31, 1997.