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Coal, utilities ponder life with Obama


Bill Raney considers coal golden. After all, the black rock fuels half of the nation’s electrical generation.

But the West Virginia Coal Association’s president and others in the industry say they’ve received mixed messages about president-elect Barack Obama’s support for coal-fired power.

Obama and vice presidentelect Joe Biden both have said they support finding cleaner ways to burn coal. But during the campaign, Obama told a newspaper that electricity rates could soar under his energy plan, while Biden told a voter in Ohio that “we’re not supporting clean coal” — though he has said the U.S. should develop clean coal technology and export it to China.

“It’s the frustration of uncertainty, based probably on the lack of understanding of how important a component of America’s energy structure coal is,” Raney said.

Others say they see little reason to worry.

Obama comes from Illinois, ranked ninth among coal-producing states, and supported its bid for the FutureGen experimental coal-fired power plant that would store emissions of carbon dioxide underground. After the plant was awarded to Mattoon, Ill., the Bush administration walked away, citing costs that had ballooned to $1.8 billion.

What’s more, some key Democrats are from coal states. Illinois Sen. Dick Durbin is the Senate’s No. 2 Democrat. Ed Rendell, former chairman of the Democratic National Committee, is governor of Pennsylvania, a big coal producer and home to steel mills that rely on the fossil fuel.

“All of these people who are some of the strongest supporters of coal in the U.S. Congress and in the governor’s office … have supported and worked hard for President-elect Obama,” said Cecil Roberts, president of United Mine Workers, which endorsed Obama last spring. “And I don’t think he’s going to let those folks down.”

Luke Popovich, a spokesman for the National Mining Association, a trade group that includes many of the nation’s biggest mining equipment makers, said he believes Obama will be pragmatic about the need to keep coal in the nation’s energy mix.

“He presumably would be sensitive to the impacts of energy policies on the economy given the perilous state of the economy,” Popovich said. “And he’s certainly shown an exceptional ability to listen to and to hear what voters want, and what we think voters said they wanted was practical solutions.”

An Obama adviser said the president-elect remains committed to developing clean-coal technology.

Obama has said he wants to create five coal-fired demonstration plants that would capture carbon emissions and store them underground.

The president plays a pivotal role in shaping the nation’s energy policy, naming top officials at the U.S. Environmental Protection Agency, Office of Surface Mining Reclamation and Enforcement and U.S. Army Corps of Engineers. And on Capitol Hill, Democrats have padded their majorities in both chambers.

“So when the music stops, who will be chairing the various committees with jurisdictions over coal? That will also be critical,” Popovich said.

Some of that jockeying on Capitol Hill already is under way.

Democrats on Nov. 20 steered the House toward more aggressively tackling global warming and other environmental problems, choosing California liberal Henry Waxman to head the House’s Energy and Commerce panel.

Waxman replaces Michigan Rep. John Dingell, a longtime supporter of Detroit automakers and other big industries, including electric utilities. Waxman this year signed onto legislation that would ban any new coal-fired power plants built without technology to capture carbon dioxide.

John Thompson, an Illinois environmentalist with the Boston based Clean Air Task Force, credited Obama with making clean-coal technology “clearly” a priority. But he said the U.S. also should make use of carboncapture technology already available.

“If we don’t change the way coal is used, it’s gonna kill us,” he said. “We’re running out of time.”

Yet uncertainty lingers, often tied to Obama’s statement to the San Francisco Chronicle’s editorial board in January that his proposed cap-and-trade system to control greenhouse gases — which would set an overall emissions limit, then require polluters to buy allowances at public auction — would be “as aggressive if not more aggressive than anybody else’s out there.”

He also told the newspaper that electricity rates would increase, and coal-fired plants that did not reduce pollution could go bankrupt because of the costs of buying pollution allowances.

Obama’s energy plan includes mandatory reductions of greenhouse gas emissions to 80 percent below 1990 levels by 2050. He also proposed a 10-year $150 billion fund for biofuels, wind, solar, plug-in hybrids, clean-coal technology and other “climatefriendly” measures, and would require utilities to produce 25 percent of power from renewable energy by 2025.

At St. Louis-based coal giant Peabody Energy, spokesman Vic Svec told the blog bobmccarty.com earlier this month “there is obvious cause for alarm when political leaders acknowledge that under onerous cap-and-trade bills that limit coal use, ‘electricity costs would skyrocket.'”

But Svec told the AP this week that Obama’s comments to the San Francisco newspaper are nearly a year old, and since then Obama has voiced growing support for clean-coal technologies — including FutureGen, the project that includes Peabody as a potential partner.

“This may seem counterintuitive, but we are eager for the new administration in terms of their support for coal and their support for advancement of carbon capture and storage technology,” Svec said.

Popovich, from the mining trade group, said he suspects that the faltering U.S. economy will make Obama reluctant to mess with “indispensable” King Coal.

“I would say there’s some cautious — underscore cautious — optimism,” he said. “You’re not going to help the American economy by hurting coal production and coal utilization.”

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