WASHINGTON, Feb 27, 2008 -- BUSINESS WIRE

In connection with his visit to Wyoming this week (Feb. 27-29), Ambassador John Bruton, Head of the EU Commission Delegation to the United States, issued the following statement:

Turning Wyoming's coal into gold. That could be the end result for this coal-producing state if the world turns to carbon sequestration as this technology brings enormous market opportunities and cleaner energy.

As I visit the State of Wyoming this week, I will be discussing coal production and the link to climate change. Wyoming set another state record in coal production for 2006, producing 446 million tons of coal which amounts to about one third of total U.S. coal production. Wyoming also has the highest level of CO2 emissions per capita of any U.S. state as coal burning is their major source of electricity.

There is no doubt that coal burning has an impact on the climate. But my message to Governor Freudenthal and other State officials is not that they need to stop producing coal. Coal is such a cheap source of energy that it is unrealistic for us to scrap it in favor of other energy sources. However, given the damaging environmental effects from coal-fired power stations around the world, we need to step up our efforts to make carbon sequestration a financially viable solution because sequestration removes the damage coal burning otherwise does to the climate.

The question of carbon sequestration boils down to basic economics. According to the recent "Economic Report of the President," the cheapest way to generate electricity is burning coal - far cheaper than using solar, nuclear or geothermal power. Moreover, if we compare the cost of carbon sequestration against conventional coal firing, it turns out that carbon sequestration will raise the cost per megawatt hour by more than $20.

The Chinese are reportedly building a new coal-fired power station every week. If these new power stations are not accompanied by a system for sequestering the CO2, they will have a dramatic effect on climate change.

But how are the Chinese to be persuaded to adopt a technology that would significantly raise their electricity costs? Who will make up the cost difference? Do we expect them to make it up completely out of their own resources? Hardly, given that the extra CO2 they will otherwise generate will damage everyone, not just themselves.

The European Union and its Member States are financing substantial research into cost effective techniques for carbon sequestration. We urgently need to make it financially worthwhile for companies in Wyoming, the United States, China and elsewhere in the world to adopt sequestration technology that will eliminate the CO2 emissions from coal burning.

The proposed reform of the European Union's Cap & Trade system could do just that. It could bridge the financial gap. If the price per ton of CO2 avoided by utilizing carbon capture and storage technology is lower than the carbon price, then the trading scheme could provide a financial tool to make up the difference between the cheap but heavily polluting conventional coal-fired method, and the more expensive but non-polluting carbon sequestration method.

Instituting cap-and-trade systems with a price on carbon will be crucial to making carbon capture and storage a commercially viable option for us all.

SOURCE: Delegation of the European Commission to the United States

News Provided By