How Will the Mercury Rule Affect Coal Prices?
Under the Clear Skies proposal which is currently in legislative limbo, mercury allowance emissions were intended to be capped at $35,000/pound. Assuming that 1 billion tons of coal is consumed by electric plants and mercury allowances reach the maximum price level set under the proposed Clear Skies price, the maximum cost of complying with the 10 ton reduction required by CAMR in 2010 would have added a maximum $0.70/ton of coal. The actual added cost to coal likely will be much lower. Directly controlling mercury emissions with sorbent injection is estimated to add the equivalent of between $1.00 and $2.00/ton of coal burned, depending on plant size. For a 300 MW plant, for example, capital equipment costs are roughly $1 million and operating costs add another $1-2 million per year. There may be a slight premium added to coals with higher halogen concentrations that then can be blended with subbituminous and lignite coals. Subbituminous and lignite coals with naturally high halogen c
