To Dismay of Power Utilities, Coal Emissions Are Under Fire

Jul 31, 2007 - Roanoke Times & World News

The emergence of global warming as a mainstream concern has altered the political landscape for coal -- the abundant domestic fuel that provides half the nation's electricity and is a major driver of the economy of far Southwest Virginia.

Just two months ago the U.S. Department of Energy issued a report highlighting coal's "resurgence" in electricity generation. In recent years, natural gas-fired power plants have been more likely to be built, but that fuel has become more expensive. The report predicted coal would account for 59 percent of new generation between 2005 and 2030.

But increasing worries about global warming caused by emissions from power plants, automobiles and other sources could pose a roadblock for the roughly 150 coal-fired power plants that have been proposed to satisfy rising electricity demand. This month, Citigroup downgraded coal company stocks, citing the politics of global warming among other factors.

Power companies are coal's largest customers, so new laws would make it more expensive to burn coal relative to other fuels, especially natural gas, and could have a major impact on the industry.

Several states have taken steps to make it tougher to build conventional coal-fired plants, and there are multiple bills intended to curb carbon dioxide emissions circulating on Capitol Hill.

One of coal's defenders in Washington has been U.S. Rep. Rick Boucher, a Democrat representing Virginia's 9th District, which covers much of Southwest Virginia. Boucher heads the House Subcommittee on Energy and Air Quality. He is working on a bill that would phase in restrictions on carbon emissions in a way that would maintain coal's attractiveness to utilities.

"It is critically important that we retain the complete ability of electric utilities to burn coal now and in the future in whatever quantities they desire," Boucher said, "and that ability is not inconsistent with making a substantial contribution as a nation to reducing greenhouse gas emissions."

Several technologies are in development to capture the carbon dioxide emitted by coal-fired power plants, but a solution on where to store the gas is not expected for a decade or more. Researchers are investigating the viability of storing carbon dioxide underground, including in old coal mines. A demonstration project is planned for Virginia's coalfield region.

American Electric Power, the Columbus, Ohio, utility that also provides electricity to the Roanoke region, supports legislation from Sens. Jeff Bingaman, D-New Mexico, and Arlen Specter, R- Pennsylvania, that would allow utilities to continue to emit vast quantities of carbon dioxide if they support other measures to contain global warming.

AEP spokeswoman Melissa McHenry said that whatever global warming debate may remain, "The political science of climate change is very certain, and we're a large user of coal, so it's important to proactively go forward."

Plus, other legislation could allow coal to become a player in U.S. transportation for the first time in decades.

As part of his carbon bill, Boucher also plans to include provisions to spur the development of a liquefied coal industry by offering federal support if oil prices go below about $40 a barrel.

The idea is to insulate producers of liquefied coal from swings in the price of oil "that would assure the facilities would not become stranded if OPEC tried to drive alternative fuels out of the American market by cutting the price," Boucher said, referring to the Organization of Petroleum Exporting Countries.

The prospect of liquefied coal, which could power jets as well as automobiles, excites people in the coal business, who could get a new market of customers.

"It would be, certainly, a shot in the arm for the coal industry," said Mike Quillen, chairman and chief executive officer of Alpha Natural Resources in Abingdon.

Environmentalists are less enthusiastic. The long-established technology to create liquid fuel from coal emits far more carbon than making petroleum-based fuels. Boucher has said that only companies that use technologies to reduce their emissions to the level of a similar petroleum facility would be eligible for the federal assistance program.

Despite that, Michael Town, director of the Sierra Club's Virginia chapter, said federal money spent on liquefying coal could be better put toward renewable energy and promoting conservation.

Boucher said the debate on how to deal with greenhouse gases has been prominent in Washington this year. The subject has prompted 10 days of hearings for his subcommittee, which he called "an extraordinary number."

Since last year, plans for new coal-fired plants have been canceled in at least eight states, but Dominion Virginia Power recently applied to build a plant near Saint Paul in Wise County.

Company spokesman David Botkins said the failure of coal plant proposals elsewhere was not a concern because his company has proposed a facility with extensive emissions controls. The plant would be built to allow the capture of carbon dioxide, once technology to do so is commercially available.