Obama's Coal Stance

Obama's Coal Stance

Location: New York
Author: Ken Silverstein, EnergyBiz Insider, Editor-in-Chief
Date: Monday, November 24, 2008

President-elect Barack Obama can't win. Coal associations are skeptical of his energy plans because he is pushing carbon cuts before the technologies to fully achieve such aims have matured. Environmentalists are also cautious and contend that his advocacy of "clean coal" does not make sense.

Coal will continue to be an integral energy source. Improving and developing the tools to make it cleaner does not contradict alternative energy producing methods. The reality is that long-term energy demand will trend higher and therefore necessitate a diversified fuel mix. Each possibility must then be pressed to be its best. That includes coal, which will be under intensified pressure now that the Democrats control Washington.

Some clean coal technologies can reduce the level of harmful emissions by as much as 90 percent. Others have the potential to reduce greenhouse gas emissions by boosting power plant efficiencies and releasing carbon gases in a form that can be more easily captured and sequestered.

The environmental community balks and says that clean coal is a myth, emphasizing that scientists say that carbon capture and storage is unproven and decades away. The extraction of coal, they add, is an ecological nightmare. For these reasons, sustainable energy forms are the way to go.

For his part, Obama walked a fine-line during the presidential campaign. He told the San Francisco Chronicle in January that if regulatory limits are placed on carbon emissions, then it would discourage the building of traditional coal-fired plants. That is because utilities will then have to buy credits or add new technologies to comply with the limitations. In making his case, he used the term "bankrupt," which set off a firestorm among coal advocates.

In the same interview, however, the president-elect says that any notion that entertains the ridding of coal as a viable fuel source is an "illusion." Coal, in fact, provides more than half of the nation's electric generation mix. His campaign, however, was quick to put his remarks in the context of a cap-and-trade program.

Such a format would require utilities to meet specified emissions targets or else buy credits if they need to exceed those limits. The goal then is to get coal-dependent utilities to build modern plants that have been shown to minimize the level of harmful emissions and which also have the potential to capture and store carbon.

According to Obama's campaign web site, his administration will "use whatever policy tools are necessary, including standards that ban new traditional coal facilities ... a stringent cap on carbon will also make it uneconomic to site traditional coal facilities and discourage the use of existing inefficient coal facilities."

Workable Ideas

Obama had opposed the Bush administration's efforts to rewrite the nation's clean air laws in a way that critics said would make it easier for utilities to pollute. But he has also voted to finance innovative uses for coal, such as coal liquefaction that can be used as a motor fuel -- something opposed by the green movement, which says the technology does nothing to limit greenhouse gas emissions.

"Obama has stepped carefully when it comes to coal, aware there are political landmines on all sides," says Frank O'Donnell, head of Clean Air Watch. "He has made it clear he wants cleaner air and reduced global warming emissions. But he has also said coal must be a part of our energy future. Can we dramatically reduce carbon emissions while still producing most of our power from coal? No one really knows for certain."

Former rival John McCain, the primary sponsor of legislation mandating carbon caps, tried to capitalize on Obama's reference to "bankrupting" coal. While an environmental steward, the Arizona senator said also that he wanted to preserve coal-related jobs.

Those comments by McCain played well to the coal industry, which opposes compulsory carbon constraints. Any effort to enact such rules without first having commercially available technologies would hurt the economy and jobs, they say, adding that renewable energy has a vital role but will not supplant coal use.

The issue is also center stage in Congress where a key committee post has just been decided -- one that will determine the panel's legislative priorities and specifically what global warming policies are debated. Henry Waxman, D-Calif., who advocates stringent environmental rules, has just defeated long-time House Energy and Commerce Chair John Dingell of Michigan, who has pushed for more gradual cuts in carbon emissions.

"As we work to secure passage of federal climate legislation and provide for the technologies that will be needed to reduce greenhouse gas emissions worldwide, the National Mining Association also will seek to protect the more than 116,000 family wage jobs in U.S. coal mining and the millions of American consumers and businesses that rely on coal as an affordable, secure and reliable source of electricity," the trade group says.

The uncertainty is gripping the utility market place. Take Wisconsin, where state regulators there turned down a request by Wisconsin Power and Light's to build a 300 megawatt coal plant that could also burn up to 20 percent biomass. Regulators rejected the $1.26 billion facility, saying that the utility had less expensive options and that potential new carbon rules made the proposition too risky.

Environmental concerns will likely result in tougher rules and regulations for coal. And that, in turn, will help advance critical technologies -- the ones that could reduce greenhouse gas emissions. Industry is dubious. But the president-elect is committed and says that the campaign themes he has espoused are workable.