Oct 8, 2007 - Knight Ridder Tribune Business News
Author(s): Steve Jordon

Oct. 8--Coal-powered utilities, under intense pressure to cut carbon emissions, say the country needs the electricity that coal generates and they need time to enact controls on discharges.

Groups like the Sierra Club, however, want an immediate end to coal's use -- in the United States and around the world -- to slow global warming. Rather than adding power plants, utilities should start retiring old ones and focus on drawing energy from the sun, wind and other renewable sources, said Sierra Club organizer Mark Kresowik of Waterloo, Iowa, whose job is to thwart proposed plants in W terloo and Marshalltown. "We're adding a whole new generation of global warming plants on top of some extremely dirty facilities," Kresowik said. "It's really getting worse and worse." The Sierra Club isn't coal's only opponent.

"From cradle to grave, coal is dirty," said Rebecca Tarbotton, global finance campaign director for Rainforest Action Network, in announcing last week a campaign against Bank of America and Citibank for financing coal-fired power plants. Leslie Lowe, energy and environment director of the Interfaith Center on Corporate Responsibility, said building a coal-fired plant is, "under any faith-based view of the world, blasphemy and a sin. It is to profit from the destruction of the natural wo ld . . . and from the poisoning of other human life on this planet." TXU Corp. of Dallas drew attention earlier this year when it said it would drop eight of its 11 planned coal-fired plants in Texas, a decision prompted by an investment group that is buying the utility for $45 billion.

The eight plants would have sent 5 million tons of carbon dioxide into the air each year. Kohlberg Kravis Roberts & Co. and Texas Pacific Group cited their "stronger environmental policies and new investment in alternative energy," pledging to support a mandatory cap-and-trade program for carbon emissions. "Cap-and-trade" programs, one of dozens of carbon-control proposals before Congress, would set limits on emissions by a group of power plants. Plants with low emissions could sell their right to emit carbon dioxide to plants with high emissions. Supporters say cap-and-trade programs would reduce emissions but are flexible and affordable.

But critics argue such programs lack the proven technology to reduce carbon dioxide emissions while continuing to supply electricity. Instead, utilities point to such efforts as "FutureGen," a model zero-emissions power plant to be developed in Texas or Illinois. The plant, a public-private partnership scheduled to begin operating in 2012, would capture its emissions and ship carbon dioxide via pipeline to be injected into underground caverns or porous rock formations for permanent storage. However, it will take another 15 years to develop a commercially viable capture-and-storage system, said John Litynski, a program officer with the Department of Energy's National Energy Technology Laboratory in Morgantown, W.Va.

And full "market penetration" -- meaning a significant number of U.S. power plants using a carbon capture-and-storage system -- may not happen until 2045 or later, Litynski said. Such widespread use would require thousands of miles of pipelines plus inj ction stations and other infrastructure, at a cost of billions of dollars. U.S. power plants emit between 2 billion and 3 billion tons of carbon dioxide per year, a figure that continues to grow. To make a dent, Litynski said, the industry would have to capture and store at least 1 billion tons. That amount is twice as much as the nation's existing natural gas pipeline system carries.

"I don't think it's something that's impossible," he said. "It's a matter of changing how we look at carbon. You're basically going to have to transform the coal industry." How fast it happens, he said, "depends on how much of a push there is by legislation or other things that would spur the need for it," as well as available financing. "Coal still will pay a major role," Litynski said. "It's just too big a piece of the pie to replace at this point." In the meantime, the power industry is making a significant drive to reduce carbon emissions, conserve energy and use as much renewable energy as possible, said William J. Fehrman, president of MidAmerican Energy Co.

MidAmerican, the Iowa power division of MidAmerican Energy Holdings Co., a Berkshire Hathaway Inc. subsidiary, generates about 58 percent of its electricity from coal, 24 percent from natural gas, 10 percent from nuclear energy and 9 percent from wind. By the end of 2008 MidAmerican will have invested $1.8 billion in wind energy since 2004, making about 18 percent of MidAmerican's electric-generating capacity renewable. (The actual renewable-energy output is smaller because wind turbines generate elec ricity only about a third of the time.) MidAmerican opened a new coal-powered generator at its Council Bluffs facility this summer, using technology that burns about 15 percent less coal per unit of electricity than earlier plants.

By 2009 the company will complete $400 million in upgrades to reduce emissions at its other plants, but the equipment won't alter the plants' carbon dioxide output. Fehrman said MidAmerican's reliance on coal has kept its Iowa electricity rates unchanged since 1995, and no increase is due until at least 2014. Coal also is a factor in making Nebraska's electricity rates the sixth-lowest in the country, said John McClure, vice president and general counsel for the Nebraska Public Power District. That's an advantage in attracting electricity-hungry employers. McClure said that even modest restrictions by Congress could more than double the cost of electricity, raising consumers' bills and making it more difficult for businesses to compete internationally.

Strict limits such as those in California run the risk of causing electricity shortages and economic disruption, he said. "That is a major concern of the electricity industry." David Sokol, chairman and chief executive of MidAmerican Energy, has called for a national 25-year effort to resolve the future of energy, similar to the commitment to space exploration that resulted in the Apollo missions to the moon in the 1960s. In an opinion piece published in the Washington Post, Sokol suggested using public and private dollars to develop clean coal, use more renewable energy, expand nuclear power and conserve energy.

Sokol wrote: "That's an ambitious but achievable goal that all Americans should be able to support."

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