Washington (Platts)--9Apr2008

Coal-fired electricity generation would decline by more than 60% before
carbon capture and sequestration technology becomes widely available under the
Lieberman-Warner climate bill, according to analysis released Tuesday by the
National Mining Association.

"The fatal flaw in this bill [is] the disconnect between technology
availability and the lack of provisions to accelerate carbon capture and
sequestration," David Montgomery, vice president of CRA International's
environment division, told a briefing.

NMA, an organization of US coal producers and suppliers and other mining
companies, commissioned CRA International, a consulting firm, to review the
economic consequences of the Lieberman-Warner Climate Security Act (S. 2191).

Crafted by senators Joe Lieberman, Independent-Connecticut, and John
Warner, Republican-Virginia, the bill sets annual greenhouse gas emissions
caps at 4% below 2005 levels in 2012, 15%-20% below 2005 levels in 2020 and
70% below 1990 levels in 2050 for the electric power, industrial and
transportation sectors.

The bill heads to the Senate floor in June for debate.

Currently, electricity produced by coal represents about 50% of US
generation.

The analysis shows that by 2040 more than 80% of existing pulverized
coal-fired power plants without CCS technology would have to be shut down for
the US to meet the reduction requirements outlined in the bill. CCS technology
is not expected to be commercially available until 2020 to 2025.

"The conclusion is that the timing of the near-term targets is way ahead
of the availability of the technology, even if there is a mass investment in
CCS technology," Montgomery said.

In its economic analysis, CRA also found that starting in 2015, the
overall cost of the bill to the average household would be $2,300 annually and
the US would lose 4 million jobs.

"Our interest in supplying this analysis is not to address greenhouse gas
emissions, but to demonstrate the problem of going about it the wrong way,"
said Kraig Naasz, president and CEO of NMA.

"Our approach is to say that we need to create a dedicated source of
funding for research and development to have us achieve the reductions
Congress wants--we haven't seen that dedicated funding," he added.