Senate shocker: Coal operator believes in global warming

October 29, 2009 by Ken Ward Jr.

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As I mentioned yesterday, it’s coal day at the Senate Committee on Environment and Public Works. Folks from the coal industry are testifying about the Senate climate change bill.

Mike Carey, president of the Ohio Coal Association, said what you would expect:

Without a doubt, this legislation which the committee is considering will devastate our communities, bankrupt our region, cause energy costs to soar across the country, and according to the EPA have almost no impact on global temperatures since China, India and the rest of the developing world will continue to increase their emissions.

But then there was Preston Chiaro, (above) chief executive for energy and minerals at Rio Tinto,  a huge worldwide coal company and the second largest coal producer in the United States, who told lawmakers:

Unmanaged climate change is a threat to our assets, our shareholders, and our employees, and also to civil society and political institutions in many of the countries in which we operate and across the globe.

Committee Chairwoman Barbara Boxer, D-Calif., was kind enough to read into the record part of today’s Gazette story, “Climate bill adds more sweeteners for coal industry. In it, I took a first cut at trying to describe some of the changes that were added to the bill to help coal, in response to efforts by, among others, Sen. Robert C. Byrd, D-W.Va.

Coal Tattoo readers know that some folks in the coal industry — such as United Mine Workers President Cecil Roberts and American Electric Power President Michael Morris — are taking a much more progressive stance on the climate bill than others, such as Massey Energy President Don Blankenship, who wants the issue to just go away.

But Rio Tinto’s testimony was a real eye-opener …  for example, as far as the Boxer-Kerry bill’s tougher near-term emissions reductions, Chiaro said:

… Our advocacy for funding of low-carbon technologies is not an argument against the levels of the targets, which we believe are consistent with the USCAP [The business-oriented U.S. Climate Action partnership]  and are required in order to address the climate imperative. Rather, the funding of low-carbon technologies is intended to ensure we reach those targets at as low a cost as possible.

Chiaro noted that the USCAP recommendations — which he said are “fully reflected” in the Kerry-Boxer bill — include “support for carbon capture and storage (CCS) demonstration plants” that are “the best chance of transforming coal into a low-emission energy source.”

He went on:

Rio Tinto will continue to urge governments to negotiate a strong global agreement for addressing climate change … We are pleased that the market-based policy features which we have advocated, including incentives for the accelerated development and deployment of low-emissions technologies, a variety of cost-containment mechanisms, and transitional compensation for [affected industries] are largely present in the Kerry-Boxer bill.

The bottom line for Rio Tinto?

Rio Tinto believes that emissions of greenhouse gases from human activities are contributing to climate change and that avoiding human caused changes to the climate is an important international goal.

 

20 Responses to “Senate shocker: Coal operator believes in global warming”

  1. […] Ken Ward, Jr., the best journalist in West Virginia, has been following the landmark Senate climate and clean energy hearings at his blog, “Coal Tattoo:  Mining’s Mark on our World.”  I’m excerpting his latest piece. […]

  2. […] Ken Ward, Jr., the best journalist in West Virginia, has been following the landmark Senate climate and clean energy hearings at his blog, “Coal Tattoo:  Mining’s Mark on our World.”  I’m excerpting his latest piece. […]

  3. scofield says:

    Bravo Rio Tinto. Preston Chiaro is a sensible executive who deserves admiration from the general public and study and emulation from his counterparts in the US energy industry.

  4. Thomas Rodd says:

    You said it scofield!

  5. Nanette says:

    I agree scofield, it appears that Preston Chiaro is looking at this with eyes wide open. He is to be commended for his willingness to come before the Senate and speak the truth. It seems that he cares for humanity and the planet.

  6. […] Blogs @ The Charleston Gazette – » Senate shocker: Coal operator believes in global warming blogs.wvgazette.com/coaltattoo/2009/10/29/senate-shocker-coal-operator-believes-in-global-warming – view page – cached As I mentioned yesterday, it’s coal day at the Senate Committee on Environment and Public Works. Folks from the coal industry are testifying about the Senate climate change bill. — From the page […]

  7. A-mouse says:

    Here’s another take: CCS technologies come with an additional parasitic load, or efficiency loss, for the power plant that they’re developed on. Take for example a 1,000 megawatt coal-fired power plant. Adding on CCS results in a 25% parasitic load related to the energy required for capturing and compressing the CO2. So all of a sudden you lose 25% of the plant’s capacity, or 250 MW. That means you have to build new capacity, and it’s likely to be baseload generating capacity, with some likelihood that it will be a coal plant. That means an added coal demand of, at minimum, 25%, if the new generating capacity is provided by coal.

    So, developing CCS provides an additional source of demand for Rio Tinto’s product — coal. Of course they’re going to support it. Blankenship just hasn’t caught on to that. I’m not saying that this is exactly why Rio Tinto is supporting climate legislation, but widespread CCS deployment will most likely result in greater demand for coal, and that’s good for the companies.

  8. […] Via the excellent West Virginia blog Coal Tattoo, I see that during the hearings today on the Senate climate bill an executive for Rio Tinto, the second-largest coal producer in the US, made a quite forceful […]

  9. Nice Try... says:

    Rio Tinto’s main business is the production of raw materials including copper, iron ore, coal, bauxite, diamonds, uranium, and industrial minerals including titanium dioxide, talc, salt, gypsum, and borates.

    *Coal is the tenth most mined mineral by this company. There focus is elsewhere and they probably could not care less if coal mining is eliminated.

    Provided a nice headline for you all though. Nice try.

    http://www.riotinto.com/documents/investors_databook/March_09_Chartbook.pdf

  10. Concerned Miner says:

    The last time I checked there weren’t many Chiaro’s working in the Central App coalfields. Wake up people Rio has vast holdings all over the world, if the US power plants are crippled with Cap and Tax, Rio’s holdings in other countries will be much more valuable. Rio has tried over the last few years to get out of coal in the US. It’s no secret that all of the mines are being shopped around.

  11. Thomas Rodd says:

    A-Mouse, you say that “widespread CCS deployment will most likely result in greater demand for coal.” This sounds reasonable at first blush, but there’s a lot of uncertainty in that brief statement.

    First, what does “widespread CCS deployment” mean — over what geographic area, over what period of time? Quite a range of possibilities, at the very least. And just what does “greater demand” mean? Does this mean greater than current and projected demand without CO2 limits — or greater than projected demand under cap-and-trade, without widespread CCS deployment? And again, over what area and what period of time? There’s a huge range of possibilities.

    It might be safer to say more narrowly that anyone in the coal business, like Rio Tinto, will naturally expect that widespread proven and cost-competitive CCS — still a real uncertainty and a long-term project — will increase the opportunities for selling coal over what they would otherwise be — if CCS is not proven out.

    So, if one is primarily and pretty much exclusively in favor of as little coal mining as possible, it makes some theoretical sense to be against all CCS investment. But, if one is also very seriously interested in keeping CO2 out of the atmosphere to the extent possible, then investing in CCS looks more worthwhile – even though proven and widespread CCS deployment would indeed and of course make coal more competitive in a carbon-emissions-constrained world.

    How competitive, and what that increased competitiveness would mean for absolute or rleative “demand” for and production of coal — under any measure — is entirely uncertain at this point. Still, I think one would be hard pressed to find any experts who think that an atmospheric-carbon-limited world economy will use coal in the amounts that we are using it today, even with “widespread” use of CCS.

    Make sense?

  12. A-mouse says:

    Hey Tom,

    I agree with your points, and I’d forgotten to clarify my assumptions, but imagine ‘widespread’ CCS deployment in Central Appalachia, which gets 95% of its electricity from coal, to mean a substantial amount of CCS development by 2050. Now, I agree, the extent to which that will happen is completely uncertain, and so I place a huge disclaimer on my statement. Thanks for the comment.

    As to another of your comments, “So, if one is primarily and pretty much exclusively in favor of as little coal mining as possible, it makes some theoretical sense to be against all CCS investment. But, if one is also very seriously interested in keeping CO2 out of the atmosphere to the extent possible, then investing in CCS looks more worthwhile – even though proven and widespread CCS deployment would indeed and of course make coal more competitive in a carbon-emissions-constrained world.”

    I would disagree with the second half of that statement. Investing in more efficient coal plants that burn less coal per kWh, while perhaps switching to more natural gas, could effect a fairly immediate CO2 reduction of 30% or more. Then perhaps developing the region’s wind resources could get us down another 10-20%. Energy efficiency, according to the ARC, could then get us another 24% (with zero demand increase). Distributed solar and wind could get us another chunk of the way. So I guess what I’m saying is, if we want to prevent the CO2 from getting into the atmosphere, CCS still doesn’t seem like the best option, especially if you also want to reduce coal demand.

  13. […] Ken Ward, Jr., the best journalist in West Virginia, has been following the landmark Senate climate and clean energy hearings at his blog, “Coal Tattoo:  Mining’s Mark on our World.”  I’m excerpting his latest piece. […]

  14. Dave Bassage says:

    Coupla points….

    First off, I’m not at all surprised to see Rio Tinto take this stance. They had a representative at a national environmental conference I chaired in Charleston in 2004 who was even then pushing for progressive energy policy. I can’t recall if climate change was specifically mentioned in that presentation, but this statement today seems consistent with their position.

    Second, there’s no question that coal will be part of the energy mix for years to come, so CCS seems at least worth sufficient investment to determine whether it can significantly lower emissions without pricing that form of energy out of the picture. I suspect that sooner than later the rising cost of making coal viable as a cleaner source of energy will make other options more appealing, but the market will sort that out in the tumultous years to come. At least there’s more emphasis on burning coal more cleanly while we do still use it. Now if we could do more about cleaning up the rest of the coal supply chain….

  15. Jason Robinon says:

    Ken I’d like to take issue with your headline. No one “believes in” global warming, at least not in the way that they “believe in” the sorts of things that this phrase is typically used to describe. The issue of climate change is an empirical issue, and whether one “believes in it” or not has zero relevance to whether or not it occurs as you are no doubt aware. By using this terminology, you relegate an empirical issue to the status of just another faith claim. If you might consider using “accepts the results” or “does not deny the data” I think that you will strengthen the logical force of your commentary without giving rocks to Philistines.

    It is no small leap to note that science denialism has many flavors sold at the same store. Using language that implies, no matter how slightly, that the interpretation of scientific results is a matter of “belief” does no service to those of us who resist this sort of equivocation on other fronts.

  16. Shelby says:

    Scrubbers are the only real option left to get rid of harmful coal burning contaminants.We will have to decide between caustic runoff into our water supplies,or clean air. Its gonna be expensive anyway its sliced.

  17. Thomas Rodd says:

    Jason’s comment makes a point we have not seen here before and I appreciate it. Finding the right words to talk about these issues is important to me and I think a lot of people who read and post here.

  18. Scott 14 says:

    Want a shocker,just go to Rio’s website and look at the mines that this company has operating. They have torn up more ground than all of the MTR in west virgina. They drained a lake in northern canada to dig a hole to open pit mine diamonds. They have torn up a lot of western austrailia and a big portion of africa. They own a stake in the largest surface coal mine in the world in Columbia. So lets not throw roses at them and briars at MTR operations in West virgina just because their CEO told you what you wanted to hear.

  19. Jason Robinson says:

    I hear you scott, let’s not throw roses at coal companies.

    Now, do you know of any existing legal machinery to prevent the way that they behave in the United States? I try to encourage my children to refrain from “she was doing it too!” as an excuse for poor behavior.

    There are plenty of reasons to throw briars all around at entities who have consistently aimed to minimize their personal, moral and ethical responsibilities to the communities in which they operate. Overcoming denial is the first step to recovery.

  20. Jason Robinson says:

    I was not clear in my second paragraph. I know of no available options that can hold Rio responsible for what they do elsewhere. All that we have is what they or anyone else do here.

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