Digging Coal a Hole


November 2, 2007


Ken Silverstein
EnergyBiz Insider
Editor-in-Chief
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State and federal policymakers may be digging coal into a hole. In a first-ever, the Kansas Department of Health and Environment denied an air quality permit for two proposed coal generators based upon the expected level of carbon emissions. Meantime, a movement is afoot on Capitol Hill to limit heat-trapping emissions.

Together, the actions work to set a new tone - one that considers it vital to the nation's environmental and economic futures to regulate carbon dioxide (CO2). While not immediate, the United States is well on its way to enacting legislation that would control CO2 emissions, which most scientists say causes climate change.

In the case of Kansas, state officials turned down Sunflower Electric Power Corp.'s proposal to build two 700-megawatt plants worth $3.6 billion. They said that the expected 11 million tons of annual CO2 emissions was unacceptable. Meanwhile, two U.S. Senate stalwarts are circulating a bill to cut CO2 emissions by 70 percent below current levels by 2050. "I believe it would be irresponsible to ignore emerging information about the contribution of carbon dioxide and other greenhouse gases to climate change and the potential harm to our environment and health if we do nothing," says Rod Bremby, secretary of the Kansas Health Department, in a statement.

The fight will continue in Kansas and around the nation. For its part, Sunflower Electric has said it will challenge the Kansas decision in court and argue that no regulatory body has the legal right to deny the construction of two plants based on an emission that is not even regulated. They furthermore go on to say that Kansas' consumers will pay more for electricity as a result of the ruling, noting that coal is the cheapest form of power.

Environmentalists contend that the state regulatory decision will be leveraged and used as a precedent in similar permitting cases now taking place throughout the country. As for Kansas, the health secretary there is unapologetic, noting that the state's attorney general said that the department's role is to safeguard the people and their air quality.

Coal now supplies almost half the nation's electricity needs. It's under constant attack from critics who point out that coal facilities account for a third of the CO2 emissions. It is also responsible for most of the pollutants that are regulated under the Clean Air Act that involve sulfur dioxide, nitrogen oxide and particulate matter. And, it is blamed for mercury emissions that harm reproductive abilities and mental development in children.

But, coal use worldwide is on the rise and in China an estimated one coal plant per week is planned well into the future. In the United States, the Energy Information Administration projects a 66 percent increase in coal-based power production and a 43 percent rise in CO2 emissions by 2030 if no pollution controls on such releases are required.

Movement Afoot

It's an unsettling phenomenon. Even the utility industry is generally saying that it would embrace CO2 controls. It emphasizes, however, that the price tag will be high and must be borne by all stakeholders. At a meeting of the Edison Electric Institute, utility CEOs said they were open to change but they disagreed on how to bring about advances. Some, for example, are advocating a market approach resembling a cap-and-trade system whereas at least one chieftain is saying a carbon tax would work best.

Senators Joe Lieberman, I-Conn., and John Warner, R-Va., have started the volley. Their most recent proposal would require electric utilities and all industrial manufacturers to cut their emissions to current levels by 2012. Those CO2 releases would then have to be reduced by 10 percent by 2020 and by 70 percent by 2050.

"As an early and vocal advocate for climate change legislation, Exelon applauds the bipartisan leadership of Senators Lieberman and Warner to introduce a bill that will help reduce greenhouse gas emissions to address global warming as soon as possible," says John Rowe, CEO of Exelon Corp, one of the nation's largest utilities.

Other supporters say that the congressional measure is a good first step but that it does not go far enough. According to a recent study by the Union of Concerned Scientists, stricter limits on CO2 emission are necessary. To ensure a 50-50 chance of avoiding the worst possible consequences of global warming, it says that that the United States must cut those heat-trapping emissions by 80 percent from current levels by 2050.

Critics of the Lieberman-Warner bill, however, maintain that mandatory carbon dioxide emissions would be a regressive move and that the high cost of compliance would be passed through to consumers. This nation's poorest citizens would subsequently be hit hardest as they are the ones who pay a bigger percentage of their incomes to energy bills. To complicate matters, those same skeptics add that current legislative attempts at regulating CO2 offer no reasonably-priced alternatives to coal.

"The theory that rationing energy is an efficient path towards confronting climate change is even now being disproved by the experience of the European Union," says Myron Ebell, director of energy for the Competitive Enterprise Institute. "A nation that embraces innovation, growth and resiliency rather than energy rationing will be better equipped to deal with whatever challenges the future holds."

But a greater fear now exists and one that reasons irreversible environmental degradation would endanger the entire global economy. As such, policymakers are increasingly erring on the side of clean air and water, arguing that it would be foolish to underestimate the negative effects global warming - all illustrated by the Kansas ruling and the federal bill now floating on Capitol Hill. In time and with improvements in technology, those sentiments will become the law of the land.


 

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