Is the Coal Rush Over?

Stephen DeAngelis

September 11, 2007

Over the past year I have written a number of posts dealing with electrical power generation and alternative sources of energy. For example in June 2006, I wrote a post entitled The Energy Challenge that discussed the negative effects of coal-fired power plants being built around the world. In that blog, I wrote: “With oil prices continuing to break records, the time is rapidly approaching when it will become economically feasible to pursue alternative fuels. Despite the pain we feel at the pumps, the benefits of increasing our use of alternative fuels will be worth it in the long run. A few companies have already begun to see how ‘being green’ makes them more resilient — both to the vagaries of the energy market and by attracting ‘green’ consumers and investors.” A couple of months later, in August 2006, I wrote about one of the alternative energy sources in a post entitled The Future of Nuclear Power. It noted that a tension exists between those who believe nuclear energy is good for the environment and those who fear that nuclear waste will be bad for the environment.

A couple of months later (October 2006), I wrote a post on The Coming Black Outs that discussed a report from the North American Electric Reliability Council that warns that the supply of electrical power is not keeping up with demand. To meet that anticipated demand, new plants are going up, but they are almost all coal-fired plants — a fact I noted in February 2007 in a post entitled Coal Rush in U.S. as Europe Gets Greener. With the success of Al Gore’s book and movie and another year of strange weather facing the public, interest in alternative energy sources grew. A couple of months ago (June 2007), I wrote a post entitled Latest Solar Power Developments that outlined what is happening in one alternative energy field. Much has happened apparently between February and September — the coal rush is over according to Steven Mufson [“Coal Rush Reverses, Power Firms Follow,” Washington Post, 4 September 2007]. Mufson writes:

“The mayor of Missoula, Mont., is the latest person to discover just how unpopular coal plants have become. In early August, Mayor John Engen (D) won city council support to buy electricity from a new coal-fired plant scheduled to begin operation in 2011. He said the city government would save money on its electric bills. But three weeks later, Engen pulled out of the deal after receiving hundreds of e-mails and phone calls from constituents upset that Missoula would contribute to the creation of a coal plant and concerned about what the town would do if the plant never got built. … A year after the nation appeared to be in the middle of a coal rush, widening alarm about greenhouse gas emissions has slowed the efforts of electric companies to build coal-fired power plants from hills of eastern Montana to southern Florida.”

There is no doubt that new power plants need to be built, but fewer and fewer people seem to believe the coal industry’s advertisements that coal can be a clean energy source. Mufson reports that the Senate Majority Leader has become the latest opponent to coal-fired plants.

“Recently, proponents of coal-fired power plants acquired a new foe: Senate Majority Leader Harry M. Reid. In late July, Reid (D-Nev.) sent a letter to the chief executives of four power companies in which he vowed to ‘use every means at my disposal’ to stop their plans to build three coal-fired plants in Nevada. Last month, after a speech in Reno, Reid said he was opposed to new coal-fired plants anywhere. ‘There’s not a coal-fired plant in America that’s clean. They’re all dirty,’ Reid told reporters after speaking at a conference on renewable energy. He said that the United States should turn to wind, solar and geothermal power in an effort to slow climate change. ‘Unless we do something quickly about global warming, we’re in trouble,’ he said. Reid’s opposition to coal plants is the latest in a series of new obstacles for power companies seeking to use the fuel to generate electricity. A combination of rising construction costs, state mandates for the use of renewable energy and lawsuits by environmental organizations have forced many utilities to drop or postpone coal projects this summer.”

Interestingly, Reid did not include nuclear power in list of alternative energy sources. Perhaps it was because he was attending a renewable energy conference or perhaps it was because he also has concerns about nuclear waste. Opposition to coal-fired plants may also be a result of some of the techniques used to mine coal. Digging deep to get coal is expensive and, as recent events in Utah have shown, dangerous. Strip mining and mountain top removal mining have also received bad press because they forever alter the landscape. None of this, according to Mufson, is good news for the coal companies.

“In July, Citigroup coal analysts downgraded the stocks of coal companies across the board. ‘Prophesies of a new wave of coal-fired generation have vaporized, while clean coal technologies . . . remain a decade away, or more,’ their report said. The Citigroup analysts said that by 2008 ‘election politics are likely to turn progressively more bestial for coal. Candidates are already stepping up to “ban coal.”‘ The Citigroup report said that coal producers’ earnings would probably be hurt by ‘new regulatory mandates applied to a group perceived as landscape-disfiguring global warming bad guys.’ Later in July, environmental groups in Montana filed a lawsuit to stop the U.S. Agriculture Department’s Rural Utilities Service from providing hundreds of millions of dollars in low-cost federal loans to a group of rural electric cooperatives seeking to build a coal-fired plant — the one that could have supplied power to Missoula.”

The article asserts that investments in power generation are continuing to be made, but more money is going into natural gas and alternative fuel powered plants than in years past.

“According to the Edison Electric Institute, the utility industry spent more than $22 billion on electricity generation last year and was expected to spend more this year. That money has, however, been increasingly given to wind and natural gas projects as utilities fret over the prospect of legislation that would regulate or tax carbon dioxide emissions.”

Proponents of coal-fired plants will continue to point to America’s huge coal reserves and play up energy self-sufficiency. Opponents will continue to point out the potential environmental effects of coal-fired plants. One thing is for certain, the United States must continue to bring new sources of power online if its economy is going to continue to grow. There are no easy answers to this challenge and I suspect that a combination of new coal-fired plants, alternative energy plants, and nuclear power plants will be built in the coming decade. Without a clear energy vision there can be no clear path to achieve it. Perhaps this election season will spur one of the candidates to present such a vision as a way to distinguish himself or herself from the field. According to another Mufson article in the Washington Post, the U.S. Congress is unlikely to take the lead in this area [“Lawmakers Get Ready to Revisit Energy Bills,” 5 September 2007].

Unfortunately, Mufson’s article adds to the confusion that often surrounds the debate about energy. Because we are a nation that travels mostly by automobile, we have become fixated on oil. Oil is all about transportation. Electric power generation is more about coal, natural gas, nuclear fuel, or alternative sources of energy like wind, water, or geothermal energy. Yet Mufson ends his article about energy this way:

“It has been 30 years since President Jimmy Carter delivered a call to action on energy, calling the issue ‘the moral equivalent of war.’ Like today’s lawmakers, he warned that the United States risked compromising its foreign-policy latitude, the economy and the environment. Yet the nation’s energy picture is more dire today. The United States last year spent eight times as much on oil imports as it did 30 years ago. Oil imports account for more than 60 percent of U.S. consumption, up from just 25 percent when Carter spoke. The average American today uses about 70 barrels of oil a year; Carter said that in 1977 the average American used the energy equivalent of 60 barrels of oil.”

In order to focus the American public’s attention on electric power generation, the debate is going to have to shift its focus off of oil — as I noted above, the debate about oil should be about transportation not power. It is a debate that also needs to be conducted, but differences between energy requirements for transportation and the energy requirements for power generation are stark and the debates should be separated so that the facts can be judged appropriately.