Coal Tattoo

Telling the truth about coal plant closures

The folks at the Columbia Journalism Review had another interesting piece yesterday about how the politics of coal has been covered in the media, this one focusing on our neighboring state of Virginia (they previously looked at Ohio coverage). Looking at the latest CJR piece got me thinking about the latest commentary from Hoppy Kercheval over at West Virginia MetroNews.

Hoppy did a takeoff on GOP presidential candidate Mitt Romney’s remark — “… I like coal … ” — in the first presidential debate, writing:

Coal claims President Obama and his EPA have waged a “war on coal” over the last four years. One can disagree with the analogy, but it’s clear the President’s all-of-the-above strategy plays favorites–green energy and natural gas over coal.

The drop in natural gas prices, slack demand and the toughened regulatory approach by the EPA are the trifecta that have triggered industry layoffs and pessimism about the future.

My first thought was to be thankful that Hoppy appeared to have toned down his typical breathless rhetoric about the coal industry and President Obama, and acknowledged that there are a variety of factors at work in coal’s current decline: Low-priced natural gas, for example, and slack demand. But then Hoppy went on to write:

Economists at The Brattle Group reported earlier that market conditions and the regulatory environment will cause approximately 30,000 megawatts (or 10 percent of coal generating capacity) to shut down between 2012 and 2016.

However, Brattle has now updated its findings based on recent market conditions and “ongoing environmental policy uncertainty.” The research group came up with two scenarios–one based on lenient environmental control technology and another based on strict policies.

Even under a more lenient approach by the EPA, the reduction of coal generating capacity will be twice as large as previously believed, around 59,000 megawatts. But if the EPA takes a stricter approach, 77,000 megawatts of generation capacity will likely disappear rather than retrofit to meet tougher environmental standards.

Now, Hoppy wasn’t the only media outlet throwing out references to this Brattle study in a way.  Reuters led its story this way:

More U.S. coal-fired power plants could retire due to environmental regulations and weaker-than-expected electric demand, costing the industry up to $144 billion, economists at consultancy Brattle Group said.

And the Christian Science Monitor ran a “guest blogger” piece that was headlined Study: EPA regulations squelch US coal industry.

But this coverage ignored a central conclusion of the Battle Group report. Fortunately, David Roberts at Grist has already done a pretty decent job of debunking this coverage:

Let’s look at what the Brattle Group did say, which is quite interesting.

The report is an update of its brief from late 2010 on potential coal-plant retirements. The headline news: Brattle is substantially upping its projection of how many coal plants will retire, by about 25 GW. That’s huge. But it’s not happening because of EPA regulations. In fact, say the authors, the change is “primarily due to changing market conditions, not environmental rule revisions, which have trended towards more lenient requirements and schedules” (my emphasis).

Catch that? Relative to the situation in 2010, EPA regulations look like less of a threat. The agency’s new Cross-State Air Pollution Rule (CSAPR) and Mercury and Air Toxics Standards (MATS) were finalized with “less restrictive requirements on the compliance deadlines and equipment than previously predicted.” The new rule on cooling towers turned out to be less stringent than industry feared as well. CSAPR was scheduled to go into effect in 2012, but was recently struck down by a federal court. (It’s uncertain whether it will eventually be upheld, altered, or replaced.)

To be clear, here’s the entire paragraph from the conclusion of the Brattle report:

The questions concerning what impact the new air quality regulations will have on power prices and resource adequacy continue to be important and difficult to answer definitively. This 2012 reassessment indicates that  somewhat more retirements are likely (about 25 GW) than we foresaw in late 2010. However, that change is primarily due to changing market conditions, not environmental rule revisions, which have trended towards more lenient requirements and schedules.

You can read the entire Brattle report, which was issued Oct. 1, here. Part of the problem here might be that the explanation of what is behind the increase in projected plant closures wasn’t fully explained in the Brattle executive summary or in their press release — the only documents that many people in the media are likely to ever read (if they get that far).

Supporters for Republican presidential candidate, former Massachusetts Gov. Mitt Romney, don coal miners hats as they wait for a rally in Abingdon, Va., Friday, Oct. 5, 2012. (AP Photo/Steve Helber)

The liberal media watchdog group Media Matters for America has also brought up coverage of the Brattle report, criticizing several news organizations that used the Reuters piece, and saying:

These inaccurate reports feed into the conservative myth that long overdue clean air and water regulations constitute a “war on coal,” even though many experts say that the primary reason for declining coal generation is the low price of natural gas.

 In his Grist piece, David Roberts offered this summary of the market challenges facing the coal industry:

One market condition has to do with demand for power, which has slowed/plateaued due to the recession and recent mild weather. Another is the falling price of renewables. But the big one, the cudgel to coal’s head, is natural gas prices. You will recall that in April, natural gas generation equaled coal generation in the U.S. (at 32 percent each) for the first time since the Energy Information Administration started keeping records. Utilities are cranking natural gas up and retiring coal plants, mainly for economic reasons. Nick Akins, president and CEO of the coal-heavy utility American Electric Power, has said flat out that “there will not be any new coal plants built, with the current price of gas and the forecast for the future for gas.”

So what can we expect for coal-plant retirements given these market conditions? First, here’s where we stand, according to Brattle: “As of July 2012, approximately 30 GW of coal plant capacity (roughly 10% of total coal capacity) had announced plans to retire by 2016.” That’s already a lot. To determine how much more is in the offing, Brattle had to estimate two crucial variables: first, what natural gas prices will do, and second, how strict EPA regulations will end up being. So they ran scenarios for both high and low gas prices, and for both “strict” and “lenient” regulatory environments.

But I wanted to go back to The Brattle Group’s initial 2010 report on coal plant closures, and remember when I do that both Gov. Romney and President Obama keep trying to talk about something they call “clean coal.”

When coal industry boosters like Hoppy talk about the Obama administration’s coal policies, they paint them as if those policies are founded on some bizarre political grudge against coal miners and the industry in which they work. Like the presidential candidates, coal boosters never really explain exactly what “clean coal” really is.

But if you look at page 18 of the 2010 Brattle report, you can get an idea of what “clean coal” isn’t. The report explains that, of the 316-gigawatt coal-fired power plant fleet across the U.S., a “large portion” of it “lacks major environmental controls”:  52 percent of that generation capacity doesn’t have scrubbers to control sulfur dioxide emissions, 57 percent doesn’t have selective catalytic reduction to control nitrogen oxides, and a full 96 percent doesn’t have activated carbon injection to control mercury emissions. The report explains that about 50 GW of the nation’s power plants are small (less than 500 MW) and old (more than 40 years), and have none of these advanced, modern, state-of-the-art pollution controls.

EPA Administrator Lisa P. Jackson has tried to explain all of this before:

So in my opinion the problem for coal right now is entirely economic. The natural gas that this country has and is continuing to develop is cheaper right now on average. And so people who are making investment decisions are not unmindful of that — how could you expect them to be? It just happens that at the same time, these rules are coming in place that make it clear that you cannot continue to operate a 30-, 40-, or 50-year old plant and not control the pollution that comes with it.

I always tell people, it’s not about coal, it’s about the pollution that for too long has been associated with coal.

Administrator Jackson continued with this:

Inside the Washington Beltway I’m not sure whether facts always matter, and that’s a sad thing for our country … because their main sources of information are not really being truthful in how they’re giving them information, we spend an awful lot of time trying to explain to people what we’re really doing.