Coal Rush in U.S. as Europe Gets Greener

Stephen DeAngelis

March 14, 2007

In a recent post, I noted that China’s premier Wen Jiabao admitted that China was having difficulty meeting its modest goals of reducing energy consumption and pollution. He blamed local politicians for resisting national policies. All the blame probably doesn’t fall on local Chinese politicians, but at least it is encouraging that national leaders are talking about reducing pollution. In the U.S., the Bush administration, which rejected the Kyoto Protocol, has begun a dialog with Congress about emission reductions, but they are just getting off the ground. In the meantime, the U.S. is building a new crop of coal-fired power plants that will have an impact for the next half century. According to Steven Mufson of the Washington Post, most of this construction is occurring in the midwest [“Midwest Has “Coal Rush,” Seeing No Alternative,” 10 March 2007]. Mufson starts his article discussing a new coal-fired plant under construction on the Missouri River within view of Omaha, Nebraska. He continues:

“A dozen more are under construction, and about 40 others are likely to start up within five years the biggest wave of coal plant construction since the 1970s. The coal rush in America’s heartland is on a collision course with Congress. While lawmakers are drawing up ways to cap and reduce emissions of greenhouse gases, the Energy Department says as many as 150 new coal-fired plants could be built by 2030, adding volumes to the nation’s emissions of carbon dioxide, the most prevalent of half a dozen greenhouse gases scientists blame for global warming.”

Most people understand the need for new power plants. They have witnessed rising electricity costs and have heard warnings about or suffered rolling brown outs. They have watched power wars between states as they fight for their share of electricity. People also understand that the environment must be taken into consideration. It is a conundrum with which politicians have had a difficult time dealing. According to Mufson, there is a lot to be concerned about.

“Any one of the three biggest projects could churn out more carbon dioxide than the savings that a group of Northeast states hope to achieve by 2018. … It remains unclear how Congress will cope with this problem. Although climate-change experts hope that new technology will deliver a way to capture and store carbon dioxide produced by coal plants, that technology remains in the pilot stage; it could take another decade before it is proven. Companies say the new coal plants are better than old ones, though both use the same approach: pulverizing coal, then burning it in huge boilers to power giant turbines. … While newly constructed plants cough up a tiny fraction of the pollutants environmental regulators have focused on in the past — sulfur dioxide, mercury and nitrogen oxides — they emit only 15 percent less carbon dioxide. They do that simply by being more efficient. Scrubbers like those used to extract other pollutants from a plant’s exhaust don’t exist for carbon dioxide. Environmentalists worry that the new pulverized-coal plants, built to last 40 to 50 years, will saddle the country with high greenhouse-gas emissions for decades.”

Pragmatic environmentalists argue that if coal-fired plants must be built, there are better technologies available than those most commonly used — the rub, of course, is that such technologies dramatically increase the cost of construction.

“If coal plants must be built, environmentalists prefer integrated gasification combined cycle (IGCC) plants that they say will make it easier later to capture carbon dioxide and store it underground. Only a handful of those are being planned. … But the IGCC plants can add as much as $200 million to construction costs; only two are operating today. Companies that make the plants, such as Siemens and General Electric, aren’t willing to guarantee certain levels of performance.”

Environmentalists and some economists, however, argue that if environmental costs are figured in (costs not generally borne by power companies) the true gross cost of building and operating traditional coal-fired plants is much higher than those that use modern technologies. Since governments often end up bearing environmental costs (clean up, healthcare, etc.), one would think that they would take such factors into consideration when approving new plants, but Mufson writes that isn’t the case.

“State regulators, who give thumbs up or down to coal plant proposals, worry mostly about reliability and costs to consumers. In the 1990s, many utilities built natural-gas-fired plants, but in the past two years gas prices have soared. Now, coal backers say that coal is cheaper than other fuels such as natural gas.”

Even so, Mufson notes, the price of building any kind of power plant is soaring. While the U.S. and China are wrestling to find an acceptable balance between fostering development and protecting the environment, Europe is moving aggressively to curb emissions [“Europe gets tougher on climate control,” by Elizabeth Bryant, San Francisco Chronicle, 10 March 2007].

“The 27 nations of the European Union adopted rules on Friday requiring that one-fifth of all energy used come from renewable sources by 2020. While key details remain to be worked out, the EU plan calls for specific targets rather than the voluntary cutbacks on greenhouse gases advocated by the Bush administration. The new rules go further than the pollution-reduction requirements of the Kyoto Protocol, which went into effect without U.S. participation. … European governments and businesses already are investing in an arsenal of emissions-cutting ventures. Wind turbines are mushrooming across rugged hills in Spain and Scotland. Bicycle lanes slice through Paris and Berlin. Clean-energy investment is blossoming, and the 27-member European Union is mulling ambitious goals to cut emissions to 20 percent below 1990 levels by 2020 — beyond Kyoto Protocol targets — along with its dependence on imported fossil fuel.”

Bryant points out, however, that so far rhetoric outpaces action and hard choices still need to be made. In other words, Europe faces challenges similar to those faced by China and the U.S., even if it is further down the green road than China and the U.S.

“Europe already has established the world’s largest mandatory emissions trading system — a scheme that offers polluters market-based incentives to reduce greenhouse gases. By setting caps and allowing industries to buy and sell carbon credits on the market, the system is designed to encourage businesses to pollute less — or at least to mitigate their emissions by investing in reforestation or other carbon dioxide-reducing projects. ‘Other countries are finding it very difficult to meet their Kyoto targets, but the EU is taking this incredibly seriously,’ said Beverly Darkin, a climate change expert at the Royal Institute of International Affairs, a London think tank. ‘The fact we’ve got an EU-wide emissions trading scheme demonstrates our willingness to put regulatory measures in place to tackle the problem.’ Critics argue the trading system hurts European competitiveness, while supporters predict the 2-year-old venture will drive future emissions cuts and a rush in green investment. Most agree, however, that it remains a work in progress.”

Many pundits argue that a green enterprise sector will eventually emerge and that sector will create jobs, raise awareness, improve efficiency, and make environmentalism not only a priority but a reality — and a profitable one. Politics has not been able to achieve this to date. This is an area where the innovators will rule and the world will win. I’m optimistic that we’ll eventually meet the challenge, but we need to realize that in the energy sector we are going to have to live the next half century with the decisions we are making today.