Coal Tattoo

Obama-Climate Change-Winners and Losers

While I was out last week, my email inbox certainly filed up with statements about the big U.S. Environmental Protection Agency announcement regarding its continued movement toward the first-ever limits on global warming pollution from the nation’s coal-fired power plants.

Most of the reaction from West Virginia political and business leaders was hardly surprising.  It’s not too much of a stretch to say that Democratic leaders, generally, were all about attacking their own party’s president, bashing EPA, and generally trying to protect themselves from any criticism that they aren’t all about coal. The career campaign consultants who run our state’s Republican party, meanwhile, continued to basically show that they don’t really have any ideas on these issues, and just want to try to ride anti-Obama sentiment into office.

For example, here’s Rep. Nick J. Rahall, D-W.Va. :

rahall_photo2I am dead-set against the EPA and their scheme to issue emissions standards that would make it next to impossible for new coal-fired power plants to be constructed. In mandating that new power plants utilize technology that is not even commercially available, let alone affordable, the Agency is preventing abundant American coal from meeting America’s future energy needs. The result of this wrong-headed policy would be higher energy bills for families and businesses, reduced power reliability and energy independence for our nation, and lost jobs for our coal miners.

This callous, ideologically driven Agency continues to be numb to the economic pain that their reckless regulations cause. Today’s rule is just the latest salvo in the EPA’s war on coal, a war I have unwaveringly soldiered against, and I will work tirelessly to prevent such an ill-conceived and illogical plan from moving forward.

And here’s Rep. Shelley Moore Capito, R-W.Va.:

capito2EPA’s action strikes at the core of West Virginia and is yet another sign that this Administration simply doesn’t care about the hard working men and women who earn their living in the coal industry, doesn’t care about providing reliable and affordable energy to power the national economy for years to come, and doesn’t care about harming the very fabric of communities across our state.
West Virginia families and businesses have already paid a heavy price due to EPA’s overbearing regulations.  We must take into account the economic impact of government regulations on local communities, and we should not take an action that hinders our nation’s ability to compete globally.  

Keeps getting harder and harder to tell the difference, doesn’t it?

What becomes more and more maddening is the lengths to which our political leaders will twist reality and bend logic in their quest to pledge their allegiance to the coal industry.

Mine ExplosionTake the statement issued about last week’s EPA announcement by Sen. Joe Manchin, D.W.Va. You can read the whole thing for yourself here. What’s fascinating about it is that in one sentence, Sen. Manchin proclaims:

Forcing coal to meet nearly the same emissions standards as gas when experts know that the required technology is not operational on a commercial scale makes absolutely no sense and will have devastating impacts to the coal industry and our economy.

But then a few sentenced later, he insists:

It’s just common sense to level the playing field and accept that coal is, and will be for the foreseeable future, a significant part of our energy mix.

OK, now. Which is it? Does Sen. Manchin want a level playing field, where all sources of energy compete fairly? Or does he want a tilted playing field where coal is made competitive by allowing the true costs of using it to be externalized, in this case by contributing to global warming pollution and the climate crisis?

About the only West Virginia leader who was coming anywhere close to making sense on all of this was retiring Sen. Jay Rockefeller, D-W.Va., who issued this statement on the EPA announcement:

rockefellersept2013I’ve always said that any clean coal policy must, at its core, have the interests of miners and their families in mind — and that new technology is the best and only way to secure their future.

The EPA’s new carbon emission plan includes tough requirements for future coal-fired power plants and pushes us hard toward clean coal technologies that have great potential but are not yet deployed at full-scale, and are difficult to finance.

These rules will only work if we act now to strengthen our investment in clean coal technology and to advance public-private partnerships more seriously than ever. We need everyone with a stake in clean coal to come together for these solutions to become a reality.

This rule is undeniably a daunting challenge, but it’s also a call to action. West Virginia and America have overcome far greater technological obstacles than this one, and I refuse to believe we can’t do it again.

Obama Climate Change

EPA Administrator Gina McCarthy, right, and Energy Secretary Ernest Moniz testify before the House Subcommittee on Energy and Power on Capitol Hill, in Washington, Wednesday, Sept. 18, 2013. (AP Photo/Cliff Owen)

But even Sen. Rockefeller, if you read his statement carefully, doesn’t explicitly support the EPA proposal. And he talks about the Obama administration’s Climate Change Action Plan as if it’s something completely different: A clean coal policy.

Despite some of the progress being made in how West Virginians talk about our future — with more frank discussions about where the coal industry is really heading and many business leaders and other groups openly pushing for more economic diversification — West Virginia remains behind as long as political leaders (even one that is not going to run for office ever again) are afraid to face facts and tell the public clearly and forcefully that climate change is a huge problem and we need to get about the business of dealing with it.

Just as one example, we certainly heard a lot from West Virginia leaders about the damage done by last summer’s massive thunderstorms that roared through the state. But have you heard any of them talking about the latest research, published this week in the Proceedings of the National Academy of Sciences, that shows climate change creates an increased risk of more such storms?

mckinleyInstead, we were treated to the scene during a House subcommittee hearing where Rep. David McKinley, R-W.Va., “expressed doubt about widely agreed upon facets of climate science” as my coworker David Gutman explained in a good story that debunked Rep. McKinley’s comments pretty soundly:

McKinley cited data showing that there is now 60 percent more ice in the Arctic than there was at this time last year, when ice levels hit a record low.

However, levels of Arctic ice are still substantially below historical averages. As of this week, there were about 1.5 million square kilometers less Arctic ice than there has been, on average, for the past 30 years, according to data from the National Snow and Ice Data Center, a research center at the University of Colorado.

McKinley and others pointed to a recent slowdown in temperature rises over the past several years as evidence that man-made greenhouse gas emissions might not be contributing to climate change.

Moniz pointed to a study in the journal “Nature,” published in August, showing the slowdown to be a product of short-term weather trends.

“Our results show that the current hiatus is part of natural climate variability, tied specifically to a La Niña-like decadal cooling,” that study concluded. “The multi-decadal warming trend is very likely to continue with greenhouse gas increase.”

And not for nothing, but let’s not forget that the typical West Virginia political leader still doesn’t want to say much of anything about the clear evidence of the environmental damage from mountaintop removal or the growing science that their constituents who live near this type of mining face greater risks of serious illness and death. And Sen. Rockefeller remains the only political leader who is talking regularly these days about things like black lung and miner safety legislation.

The other thing, though, is that all of this anti-science stuff and all of this “war on coal” stuff that’s aimed at delaying for as long as possible any real action on climate change really isn’t helping coalfield communities or the coal industry in the long run.  I wrote on this blog two years ago about how coal industry supporters were really dropping the ball by not doing more to push for carbon capture and storage, or CCS, technology.  Back then, coal industry supports certainly were making it sound like CCS was a snap — that the technology was ready to go. Remember those billboards that touted “Clean, Carbon-neutral coal”? As I wrote at the time:

My reporting tells me that coalfield political leaders aren’t really speaking the truth about CCS. They like to make out like “clean coal” is already here, that this is a silver bullet … don’t look behind this curtain … there’s nothing to fear. That’s simply not the case, based on the literature and what experts say.

At the same time, do we know that CCS will work? Do we know for sure it’s safe, economical, etc.? No we don’t. But it’s really the only hope coal has. The industry and its political supports claim it’s the path to truly “clean coal”.

If coalfield political leaders want coal to be part of the nation’s (and the world’s) energy future, then shouldn’t they realize that CCS is the only path to follow?  And isn’t one major hurdle the lack of a “carbon price” — through requirements for greenhouse emissions reductions — that would force the industry to work far more quickly to perfect and deploy the necessary technology?

But most of the region’s political leaders (and certainly most of the media here) vigorously oppose any sort of legislation that would require emissions reductions and therefore help push CCS along.  It’s worth asking these politicians over and over: How do you expect “clean coal” to actually happen if the industry isn’t given some economic incentive to play ball?

Writing for the website WyoFile, Dustin Bleizeffer, recently made some similar points in a post called But I thought this was why Wyoming invested in coal-gasification:

While there are many questions still to answer about coal-gasification, super-critical designs and carbon capture, moving forward with CO2 limits on coal is a much better plan than what Wyoming politicians have put forth, which has been to convince the rest of the nation and the world to forget about coal’s contribution to accelerated climate change — a pending human health catastrophe that no amount of royalties, tax revenue or Wyoming-based jobs could ever justify.

Others are increasingly making this same point. Writing this week for Breaking, Elias Hinckley explained that Uncertainty and Investment in Electric Generation Don’t Mix: the Real Danger to the Coal Industry:

Supporters of coal have called the planned new rules from the EPA on CO2 emissions from coal-fired power generation a war on coal and have pledged to fight the rule-making process. It is true that there will almost certainly not be a new coal-fired electric generating station built in the U.S. for at least the next several years, but the hiatus won’t be caused by any specific rule. The real danger to the coal industry is uncertainty.

Investing in the electric business is about long stable returns. Electricity assets last a long time, are expensive to install, and are typically expected to provide long-term stable, if modest, returns. Since returns are spread over a long period and are stable, with limited upside (10x returns on energy infrastructure don’t exist) investors and lenders require a quantifiable and manageable amount of risk. Uncertainty in any form makes the quantification and valuation of risk in an electric generation investment much more difficult (or impossible) and severely limits investor interest.

… The challenge for coal generation projects to attract investors and lenders in light of the forthcoming rules on CO2 emissions is more severe. By directing the EPA to draft rules on regulating CO2 emissions from power plants, the White House has sent a clear signal that there will be an economic impact on coal-fired electric generation (and to a lesser extent gas fired generation). What is unclear until the rules are finalized is how significant that economic impact could be. The consensus is that the effect will be significant, but that could mean anything from a material yet measurable impact on potential returns to an economic effect so severe that new investment in coal generating assets is completeley unviable.

Curiously, the fight being waged by coal supporters may actually be making the industry position worse by extending this period of uncertainty. A better solution would almost certainly be to find some legislative compromise, possibly built around a broader Congressional compromise on greenhouse gas emissions, which could be more nuanced or gentle in its implementation (though how this would come together in light of the current atmosphere in Congress is unclear). Instead, the rule-making process will force this long period of regulatory uncertainty.

Irrespective of the timing and structure of the final emission rules, the power sector in the U.S. will be permanently altered. It will not be the actual rules, rather this period of uncertainty as the legal and political battles play out, that will make that declining share for coal steeper and permanent. The final version of the rules will likely be of little relevance, as the uncertainty of the rule-making process will immediately frighten away potential investors. This loss of outside capital for large expensive projects will effectively cease all new development of thermal coal generation and will also significantly hamper upgrade investments at existing facilities forcing an acceleration of retirements.

And in a report today for the Center for American Progress, Robert Sussman and Daniel J. Weiss explain that the coal industry would be better off embracing the future, rather that fighting to preserve the past:

Every day, there is new scientific evidence that fuels the urgency to reduce the carbon and other pollution responsible for climate change. EPA’s proposed carbon-pollution standard couldn’t be more timely. With virtually no traditional coal plants under construction due to factors unrelated to EPA health rules, the claim that the agency’s proposed standards will ban future coal-burning facilities can’t hold water. Rather than attacking EPA’s proposal, the coal and utility industries should instead use the lull in new plant construction to make investments that secure a future role for coal-fired power plants while we finally slash pollution from power plants.

An ambitious but attainable standard that enables coal plants to achieve emission levels comparable to those of cleaner natural gas plants via deployment of a new and viable technology would give coal a new lease on life. Blocking this rule would continue the decline of conventional coal plants. That’s why coal and utility companies—and their political allies—should endorse the EPA’s common-sense proposal to clean up future power plants.

As this discussion so often does, it all comes back to what the late Sen. Robert C. Byrd said:

Change has been a constant throughout the history of our coal industry. West Virginians can choose to anticipate change and adapt to it, or resist and be overrun by it.  One thing is clear.  The time has arrived for the people of the Mountain State to think long and hard about which course they want to choose.