By David Wagman, Chief Editor, Power Engineering magazine 

Now that the Democrats have lost their super majority in the Senate it seems more likely that carbon regulation rules will come from the U.S. Environmental Protection Agency rather than Congress.

This is contrary to what many in the power generation industry had hoped. A congressional approach might make it more likely that an economy-wide strategy would be adopted. As a rulemaking agency the EPA is more narrowly confined. Its approach, although still likely to be far-reaching, will nonetheless fall short of the scale and scope that Congress could address.

Uncertainty over carbon has left much of the industry in a state of paralysis. Perhaps the only happy outcome of the recession is that electricity demand has dropped, easing many timetables for building new fossil-fired power plants. Given the long lead time needed to permit, build and commission a new baseload plant, however, the industry can’t wait indefinitely for a decision on carbon.

Complicating matters is the global muddle that resulted from last December’s Copenhagen climate change talks. Little consensus emerged on how the world will address the issue of global climate change. Behind it all are the climate change skeptics whose doubts still needs to be listened to: are regulations truly necessary?, is climate change a phenomenon that humankind can control? and so on. Answering “yes” assumes agreement on a host of scientific and political factors. Saying “no” assumes agreement on a different list. Still to be considered are legal challenges that may result from new rules.

All this points to a purgatory of “maybe” that does no one any good. Trying to figure out how to value the cost of carbon has turned into such a fundamental issue that it affects capital spending decisions from nuclear power plants to solar rooftop installations. Either Congress or the EPA must act swiftly to resolve the impasse and allow the industry to move on.