Weak Economy Could Curb Obama Coal Cleanup Plan
US: November 21, 2008
HOUSTON - As US president, Barack Obama is likely to tighten environmental
regulations on generating power from coal, but his ambitions could be reined
in by the cost of such measures given a weak US economy.
Obama's campaign proposal to fight global warming - by cutting heat-trapping
carbon dioxide emissions to 80 percent less than 1990 levels by 2050 - could
require big US utilities to spend billions to comply.
But coal-fired power plants, which generate about half of US electricity and
40 percent of US greenhouse gas output, will have to be the backbone of
America's power grid for decades because US coal is plentiful and relatively
cheap.
"Coal is going to be clamped down on from mine mouth to smokestack, but it's
not as though coal is going out of style," said Kevin Book, an energy
analyst with Friedman, Billings, Ramsey Group Inc.
"Obama cannot ignore the economic side of the story," Book said.
Just before the Nov. 4 election, Republicans seized on Obama's comments to a
newspaper that US utilities could face bankruptcy if they build new coal
plants. However, utility officials generally see the Democratic
president-elect as supportive of their industry.
Earlier, Obama handed out flyers in Kentucky with a picture of coal barges
on the Ohio River and stating, "Barack Obama believes in clean Kentucky
coal." He has backed pioneering power plants that burn coal but capture
carbon emissions.
?A NEW CHAPTER
On Tuesday, Obama - whose home state of Illinois is a major coal producer -
said the United States would "engage vigorously" in climate change talks
when he is president and pledged, despite the financial crisis, to fight the
problem.
"My presidency will mark a new chapter in America's leadership on climate
change that will strengthen our security and create millions of new jobs in
the process," Obama said in a video address to a global warming summit in
California.
Obama wants coal-burning US utilities such as Southern Co and American
Electric Power to find cleaner ways to use America's coal reserves - which
are expected to last about 250 years at current rates of use. He also wants
to develop nonpolluting solar and wind energy and to push programs to
encourage reductions in greenhouse gas emissions.
Some US mining industry officials fear Obama could impose draconian
regulations on the use of coal, though such worries are not universal across
the industry.
"I think the impact on the industry will be huge," said John Wellford of
Marsh Fork Development Co, a small West Virginia producer, who warns tighter
federal regulations could shut down much of the industry.
Other industry officials say that concerns about the economy and the need
for affordable energy will balance environmental worries as US consumers
suffer through one of the worst economic contractions in decades.
The National Mining Association, which lobbies for big coal companies such
as Peabody Energy and Arch Coal, predicts that Obama will be pragmatic in
his energy policy.
"He obviously is a man who can read public sentiment," said Luke Popovich, a
spokesman for the group, arguing that jobs and the economy trump all other
concerns. "That's going to dominate the agenda for the foreseeable future."
GIVING COAL A BREAK
Another moderating factor is that Congress, though more Democratic after the
Nov. 4 elections, includes Democrats from coal-producing states who would
resist extreme measures against the industry.
"There's a lot of folks who can find their way to giving coal a break," Book
said, noting coal is mined in 27 states and can be found in 11 others.
"There's only so far he can go before he gets in trouble with his own
party."
Environmental groups expect Obama to be more pro-active on environmental
issues than Republican President George W. Bush, who resisted costly
measures to fight global warming, but they acknowledge Obama faces a tough
agenda topped by other issues.
"He talked about clean coal, and I think he has a commitment to make sure it
is clean. Exactly how that plays out in his priorities remains to be
determined," said Cathy Duvall, political director for the Sierra Club.
(Editing by Chris Baltimore and Marguerita Choy)
Story by Bruce Nichols
REUTERS NEWS SERVICE
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