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Coal on trial

February 10th, 2008 by Fereidoon Sioshansi, EEnergy Informer

Coal, the mainstay of US power generation, has been facing unprecedented resistance, including from some unexpected sources.

Presently, over 600 coal-fired plants in the US burn more than 1 billion tons of coal spewing 2 billion tons of CO2 annually, about a third of the country’s total. Under a business-as-usual scenario, the coal’s share of US electricity generation will increase from roughly 50% today to nearly 60% over the next 2 decades, according to government projections.

A_third_of_the_problem

A third of the problem US sources of CO2
* Of which 32% is from coal-fired generation
Source: EPA, National Energy Technology Laboratory

Despite coal’s heavy environmental footprint, the US coal lobby, spearheaded by a group with the confusing name of Americans for Balanced Energy Choices (ABEC), would like you to believe that all is well. In a published report in mid January, it claims that currently there are more than 120 coal-fueled power plants under or near construction, permitted or in the early stages of development in the US.

ABEC rhetorically asks what else but coal can feed an estimated 6,000 MW of new generation capacity needed per annum to feed the growing US economy by 2030 – citing projections by the Energy Information Administration (EIA).

With US electricity demand projected to double over the next 20 years, and sitting on a 250-year supply of domestic coal, the US “is in a position to leverage its most abundant domestic resource to provide secure, affordable energy,” says Joe Lucas, ABEC Executive Director.

Dont_write_off_coal

Don’t write off coal Electricity generation mix, US & the world
Source: International Energy Agency & Energy Information Administration

Coal may be plentiful and cheap – relatively speaking – yet it is facing unprecedented challenges from many environmental groups, who appear to be gaining momentum. At least four dozen coal plants are being contested in 29 states, according to Associated Press (14 Jan 08). “Our goal is to oppose these projects at each and every stage, from zoning and air and water permits, to their mining permits and new coal railroads,” according to Bruce Nilles, a Sierra Club activist who directs the group’s national coal campaign and is quoted in the AP story.

“They (the coal plant developers) know they don’t have an answer to global warming, so they’re fighting for their life.” The coal developers counter, “These projects won’t be denied, but they can be delayed by those who oppose any new energy projects,” according to Vic Svec, a vice president at Peabody Energy, one of the largest US coal mining companies.

The two sides are battling each other in the courts, in public hearings, and increasingly in a fierce public relations campaign designed to gain public support and sentiment. Sierra Club alone spent over $1 million in 2007, a figure that is expected to increase to $10 million in 2008, according to Mr. Nilles. Yet, the environmentalists are outgunned by the powerful coal lobby, which spent $15 in 2007 and is planning $35 million in 2008, according to Mr. Lucas – mostly from coal mining companies, utilities and railroads.

Who has the upper hand is hard to say, but according to the AP story, the environmental groups claim 59 canceled, delayed or blocked plants as evidence of their success. Yet, 22 new coal plants are now under construction in 14 states, more than there has been in two decades.

Why the current rush to build so many new coal plants? One theory is that the coal lobby knows that harder times are inevitable and it is best to build as many as they can now before new legislation is enacted – with the hope that existing plants will be exempt from new restrictions. This may explain why former TXU was rushing to build 11 coal-fired plants in record time. While acknowledging that there is indeed a rush to build new coal plants, Peabody’s Mr. Svec denies that there is any conspiracy.

Even Mr. Lucas admits that there have been a number of high profile coal plant cancellations, including a few in previously coal-tolerant places. He, however, dismisses any fears that this may be the beginning of a trend by pointing out that “there are many more projects that have been approved and under construction than have been cancelled.” He also claims that every major plant currently under construction or proposed makes use of cleaner, more advanced technologies, including sub-critical and supercritical pulverized coal (PC), coal fluidized bed (CFB) or integrated gasification combined cycle (IGCC).

Technically, he is correct and nobody is writing off coal in this country, or anywhere else. But then Mr. Lucas resorts to scare tactics to suggest what might happen if – God forbid – construction of coal-fired plants are opposed or delayed for what ever reason. “US coal-fueled electricity contributes $1.05 trillion in gross economic output, $362 billion in annual household incomes and 6.8 million jobs in 2015,” he says. ABEC’s wants you to believe that take away coal and the US economy is crippled.

But no matter how hard the coal lobby tries, all is not well for coal. Take Kansas, not traditionally included in anyone’s list of green or environmentally enlightened states. Last October, Kansas Department of Health and Environment Secretary Roderick Bremby rejected a critical permit for a plant in western Kansas proposed by Sunflower Electric Power Corp., citing concerns about CO2 emissions and global warming.

The formidable coal lobby has been working overtime to override Mr. Bremby’s decision. But a subsequent opinion poll conducted in November by Cooper & Secrest Associates of Alexandria, Va., showed that 62% of Kansans support Bremby’s decision, only 31% oppose it – not the sort of message the coal lobby wants to hear.

“The simple fact is that a healthy majority of Kansas voters endorse the decision … to block construction of these two Sunflower plants,” the pollsters said. More than 1,000 Kansans were surveyed, including an over represented sample from the district which would have been the site of the proposed plant. Sunflower and its co-developers have appealed the decision to the Kansas Supreme Court, and state legislative leaders are trying to overturn Bremby’s ruling.

Actively intervening in a number of states where proposed coal-fired plants are facing stiff public opposition, ABEC does its best to remind environmental regulators of the dire consequences of any decisions unfavorable to coal. In a press release prior to public hearings before the Nevada Division of Environmental Protection in Ely, Nevada in mid January, Mr. Lucas warned, “ in Nevada alone, a 66% displacement (of coal) will cost the state $2.5 billion in lost economic output, $1.1 billion in lost household income and 18,000 lost jobs.”

Coal currently accounts for 25% of electricity generation in Nevada. But the state, among the fastest growing in the country, needs more power. Its population has grown 25% since 2000 – 4 times the national average. The U.S. Department of Energy estimates Nevada will double its electricity consumption every 6-7 years at current growth rates.

Another sign that trouble may be brewing in formerly safe coal-country comes from Utah – which generates over 85% of its power from coal. Speaking on 10 Jan at a function in Ogden, Utah, Rocky Mountain Power’s President, Rich Walje, said his company has its own plans to reduce emissions by “increasing the proportion of energy it gets from non-carbon-emitting sources to 20% by 2025,” from less than 3% today. Rocky Mountain Power is in favor of legislation that would prohibit the state from imposing specific deadlines on pollution-reduction targets. “We want policy direction, but we don’t want to be told to do a certain thing at a certain time.” Of course not.

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3 Responses to “Coal on trial”

  1. John Busby Says:

    The German Energy Watch Group has published a report on coal which calls into question its plenteousness. See http://www.energywatchgroup.org/fileadmin/global/pdf/EWG-Coalreport_10_07_2007.pdf.

    In the US the era of high quality coal is nearing its end. Anthracite and bituminous coal production has been steadily declining since 1950 and 1990, while total coal production has been rising. Lower quality sub-bituminous and lignite have been making a rising contribution.

    The MIT report “The Future of Coal” warns that theoretically “clean coal technologies” (CCT) will draw between 27% and 37% more coal from the reserves for the same generation, excluding sequestered CO2 transportation and injection, which means in practice around 50% more coal would be burned.

    This means that if universally applied CCT would reduce the coal reserves by a third. It is difficult to imagine the willingness of an industry abandoning so much of its production for climate alleviation and it means that CCT is unlikely to be enforced.

  2. Toby Rogers Says:

    Hi Fereidoon! This is a great article! Thanks for all the great data!

    I agree with John Busby’s comment above that the estimates of the remaining coal reserves are vastly overstated. Check out “Big Coal” by Jeff Goodell that suggest that only about 10 to 20% of estimated coal reserves in the U.S. are economically recoverable. “A good percentage of the coal that’s left is too dirty to be burned in conventional power plants, and much of it is buried in inconvenient places — under homes, schools, parks, highways, and historical landmarks.” (Big Coal, p. 7)

    In the United States, the coal lobby is saturating the airwaves with commercials that minimize the dangers of coal — while conveniently leaving out any mention of global warming, acid rain, smog, heart attacks, lung disease, asthma or any of the other bi-products of coal-fired power.

    I got tired of watching the coal lobby’s ads during the Presidential debates on TV. So I took one of their ads and remade it — stripping out the coal industry’s lies and replacing them with facts about the dangers of coals and the benefits of solar, wind, and geothermal power. You can check it out here:

    http://www.youtube.com/watch?v=8PPxYCDKVec

    It seems to me that the coal industry is fighting a losing battle and they know it. They’re just trying to squeeze every last drop of profit out of the system before they go extinct. By trying to build all these power plants now, they’re trying to squeeze 50 more years of profit out of this dirty energy source — which seems pretty cynical to me.

  3. Henri Delalande Says:

    In his article, Fereidoon Sioshansi insists on legal arguments between the coal lobby and local authorities or environmental groups and he gives the example of a refusal of permit by the Kansas Department of Health and Environment Secretary. The hostile attitude of populations towards coal is not specific to the United States: in Germany, RWE and Evonik recently interrupted the construction of two new coal-fired power plants respectively in Ensdorf and Herne. Moreover, EnBW would like to invest in coal power plants in Germany but the head of the company deplores that the environment is “unfavourable” to such projects.
    Nevertheless, the difficulties of coal industry are not only due to environmental issues. The report titled “The Risks Of Investing In New Coal-Fired Generating Facilities” prepared for the Interfaith Centre on Corporate Responsibility by Synapse Energy Economics, Inc (a research and consulting firm specializing in energy, economic, and environmental topics) insists on the fact that investments in new coal-fired power plants carry far more risk not only because of the likely regulation of greenhouse gas emissions but also due to the rising construction costs. This report quotes the Appalachian Power Company that evaluates the average annual escalation in power plant commodities between December 2003 and April 2007. This escalation is 60.3% for Nickel, 69.2% for Copper, 11.6% for Cement and 19.6% for Iron and Steel. This aspect which is not linked to environmental issues is also partly responsible for the large number of coal-fired power plants projects cancellations.

    In the article, Mr. Lucas, ABEC executive Director, points out that “every major plant currently under construction or proposed makes use of cleaner, more advanced technologies”. Why would people oppose coal-fired power plants projects if they use clean coal technologies?
    Many efforts are made to find a clean way to produce electricity from coal. The efficiency of the plants keeps increasing and capture and sequestration of CO2 is being tested in several places all around the world. Companies try to build power plants that will be able to capture CO2 once this technology is available for large scale plants like Electrabel’s project of two 800 MW coal-fired power plants in Northern Germany, close to a potential sequestration site.
    In spite of all these efforts, it is not certain that coal will be clean one day. The 2007 MIT study “The Future of Coal” discusses the cost of CO2 sequestration. For example, the cost of electricity of a 500 MWe supercritical pulverised coal power plant is 4.78 cents/kWh without CO2 capture and 7.69 cents/kWh with CO2 capture. CO2 capture is expensive because of the cost of the capture system itself and because it reduces the efficiency of the plant (in his interview with Enerpresse published on March 10th 2008, Mr. Paul Boutin, coordinator of the Castor Programme, says that the decrease of the overall power plant efficiency due to capture systems is around 10 percentage points). The report also points out that it is a false assumption to believe that today CO2 capture and sequestration is a demonstrated and available technology for very large scale sequestration. Besides being expensive, CO2 capture may not be feasible. An article published in Modern Power Systems in November 2007 is titled: “IGCC stumbles and falls in the US. The spate of cancellation is becoming a flood”. This article gives several examples of IGCC projects that were cancelled such as Southern Co’s $850 million plant in Florida. Even IGCC, a promising clean coal technology, is in difficulty regarding technology and cost. Therefore, clean coal technologies are not yet mature and it is not certain they will be mature in the future.

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