DUSTIN BLEIZEFFER Star-Tribune energy reporter | Posted: Saturday, November 8, 2008 12:00 am
Last-minute jousts in the presidential campaign may have caused some coal miners in Wyoming and across the country to wonder if their jobs are in jeopardy now that Barack Obama is the nation's president-elect.
"No, I don't think the coal industry in Wyoming, and the utilities that rely on it, are going to be shutting down coal-fired power plants," said Marion Loomis, executive director of the Wyoming Mining Association.
Just days before the election, a battle over coal erupted between the presidential candidates.
Pulling a single quote from a Barack Obama interview with the San Francisco Chronicle's editorial board in January, the National Mining Association asserted on Monday that Obama's climate change policy would "bankrupt U.S. coal."
But the rhetoric has been toned down in the days following the election.
"We're hopeful that there will be bipartisan cooperation, because I know people expect things to get done. Some of the more extreme environmental wish-list will be cast out the window and we'll start with real work because people need jobs and energy security," Luke Popovich, vice president of external communications for the National Mining Association, told the Star-Tribune on Friday.
The association and the John McCain campaign had seized upon a single quote from that San Francisco Chronicle interview: "So if somebody wants to build a coal-powered plant, they can; it's just that it will bankrupt them because they're going to be charged a huge sum for all that greenhouse gas that's being emitted," Obama said.
This was the statement issued Monday by National Mining Association president and CEO Hal Quinn:
"Bankrupting the coal industry would be tantamount to bankrupting the American economy. Coal generates half of our nation's electricity, employs hundreds of thousands of Americans and provides millions of dollars in revenue to coal states," said Quinn.
But Obama also indicated that coal would continue to be a significant part of the American energy picture.
"This notion of no coal, I think, is an illusion because the fact of the matter is that right now we are getting a lot of energy from coal, and China is building a coal-powered plant once a week. So what we have to do then is we have to figure out 'How can we use coal without emitting greenhouse gases?"' Obama said.
(Complete audio of the interview is available here: http://www.sfgate.com/cgi-bin/blogs/opinionshop/detail?blogid
42&entry-id23562)
Cap-and-trade details
Popovich said distinguishing between bankrupting a single power plant project and the entire U.S. coal industry amounted to splitting hairs. What's really important, Popovich said, are the details that go into crafting carbon regulations to control greenhouse gas emissions.
Both president-elect Obama and Sen. John McCain, R-Ariz., promised a cap-and-trade approach to climate change policy. And both vowed to support "clean coal" technologies and renewable energy.
The question for the coal industry after the primaries wasn't whether there would be limits on CO2 emissions from coal in the near future (there will be). The question was whose plan would be most stringent on emissions caps, timelines for meeting the caps and how emissions credits would be allocated.
"We support a cap-and-trade approach, and we support a responsible means of controlling CO2 emissions and reducing those emissions into the atmosphere," said Popovich. "Our point, simply, is when we do that let's make sure it does not lead to unacceptable economic harm."
Obama made clear all through his campaign that polluters would be charged for every unit of greenhouse gas they let into the atmosphere.
Popovich said the biggest concern for the coal-based utility industry is the amount of time that polluters will be given to reduce their greenhouse gas emissions under a cap-and-trade program, and whether the emissions credits will be auctioned off or distributed among emitters for free.
Loomis said his organization viewed McCain as being more of an proponent of coal and clean coal technologies. But he doesn't expect the Obama administration, or the Democratic-controlled Congress, to be the demise of Wyoming's coal industry.
"I don't think anybody is going to rule out coal," Loomis said.
Others are more optimistic about a clear energy policy under the new Barack Obama administration.
Tom Dennis of Cassidy & Associates lobbies in D.C. for the Wyoming Infrastructure Authority. He said a build-out of infrastructure to harness all forms of domestic energy is an unavoidable reality if the nation is going to have a strong economy that is less dependent on foreign oil.
"I think that it's been made clear in the campaign that Sen. Obama knows we have to build-out the nations' grid. To me, that means electric transmission to bring the needed renewables and clean-coal technology capacity to market," Dennis told the Star-Tribune. "He (Obama) has repeatedly said he is for clean-coal technology, over and over and over again, and he comes from a coal state."
Regulatory certainty
In fact, the single largest delay of coal-based power plant construction in the U.S. has been the expectation that federal greenhouse gas regulation is inevitable, but the rules are not yet in place for engineers and financial institutions to meet.
"How do you build without knowing what the rules are? How do you make an intelligent capital decision?" said Popovich.
The state of uncertainty has played itself out in big ways in Wyoming.
Last year, PacifiCorp, which operates as Rocky Mountain Power in Wyoming, scrapped a planned 527-megawatt, super-critical pulverized coal unit at the Jim Bridger power plant in Sweetwater County. The company also scrapped a coal-gasification, carbon capture and sequestration demonstration project in partnership with the state of Wyoming at Jim Bridger.
The company explained that all coal-based power generation was off the planning table at least until federal greenhouse gas regulations are in place.
Conversely, Basin Electric Power Cooperative said it did not have the luxury of waiting for Congress to craft the regulations. In order to meet customer demand in northeast Wyoming and other service regions, it began construction this year on a $1 billion-plus coal-fired power plant near Gillette - the 385-megawatt Dry Fork Station.
Dry Fork Station is expected to pump 3 million tons of carbon dioxide into the atmosphere for the next 40 years.
Environmental groups say new construction of coal-fired power facilities is a risky gamble, because the developers are betting that the facilities will either be grandfathered under the new regulations or they will be given enough time to meet CO2 reductions that the technology to do so will come down.
Loomis said that although the industry does not expect to shut down any coal-fired power plants, new construction may not keep up with electrical demand.
"We are going to delay construction of new coal power plants," Loomis said.
Adding to the din of doubt surrounding coal at the moment is the global economic crisis that just raised the bar for investment even higher. However, Rob Hurless, energy and telecommunications advisor to Gov. Dave Freudenthal, said the nation's energy challenges are not insurmountable.
"I'd say the glimmer of hope is the robustness of the marketplace," said Hurless. "People are working on these things, they're thinking about designs and running the numbers. There's a very vibrant set of folks who are attacking this problem, but they don't get a lot of press."
Contact energy reporter Dustin Bleizeffer at (307) 577-6069 or dustin.bleizeffer@trib.com