In the US new and existing coal plants will run for years

Published by MAC on 2010-11-29
Source: New York Times, Huffington Post

In the Heartland, Still Investing in Coal

By Dilip Vishwanat

New York Times

16 November 2010

ON the coasts, states are limiting carbon dioxide output, banning new coal-fired power plants and building wind turbines to fend off global warming. But here in the heartland, thousands of workers are building a $4 billion new coal plant with a 700-foot chimney, 70 feet higher than the Gateway Arch in St. Louis.

Around the country, construction of coal plants has been slowed, partly by opposition but also by the recession, which has stunted electric demand and forced cancellation or deferral of all kinds of utility projects.

But numerous coal plants under construction today are likely to be pumping out carbon dioxide profusely until at least 2050, when, as President Obama would have it, American carbon output will be 80 percent lower.

And the project here is not just a power plant; it is the Prairie State Energy Campus, because it includes a vast new coal mine as well, which will supply 6.5 million tons a year. Everyone here, 40 miles southeast of St. Louis, has heard about the idea of cap and trade or other strategies for limiting carbon dioxide emissions. Some day, one might get enacted, they believe. But it does not keep them awake at night.

What does, they say, is meeting the demand for electricity. "We have an obligation to serve," said Raj Rao, the chairman of Prairie State. "We're not going to close all the coal-fired power plants and then say, there's nothing there. If we do, then we're going to close this country, and that's not going to happen."

In fact, the Environmental Protection Agency will begin in January requiring large carbon dioxide sources to get permits, but there is no limit on emissions.

Low natural gas prices in the last two years have increased the use of gas-fired plants. The builders here started work when the price of natural gas was higher, but companies building coal plants expect over the decades that this will be the alternative with the least cost.

Mr. Rao predicts a transition period of 30 years, which would probably be most of this plant's lifetime, and the betting is that if there is a charge on carbon, it will not be large enough to change the basic economics.

Some investor-owned utilities could profit from pollution controls, including the cost of capturing carbon dioxide, because they pass their costs on to customers. But it is worth remembering that Prairie State is 95 percent owned by municipal utilities or co-ops, which are owned by their customers.

So if a calculation involved here ignores the needs of polar bears, it is being made on behalf of 2.5 million customers, in homes, shops and factories in eight Midwestern states. (Mr. Rao is president and chief executive of the Northern Illinois Municipal Power Agency; that agency also makes investment decisions for a second, smaller partner in Prairie State.)

Meantime, in 2012, Duke Energy, an investor-owned company, plans to open a $1.8 billion plant in North Carolina called Cliffside, with 825 megawatts of capacity, that is also intended to be operating in midcentury. Completion will allow Duke to close coal plants from the 1940s and 1950s with more than 1,000 megawatts of capacity.

But the amount of electricity from coal will probably rise a bit, said Tom Williams, a spokesman for Duke. Many old plants run only 25 or 30 percent of the hours in a year, he said, but the new plant will run 85 to 90 percent of the time because it will have lower costs per unit of electricity.

In part, that is because, like Prairie State, it will run at higher temperatures and pressures and get more electricity from a ton of coal than the old ones did.

Around the country, coal plants built in the 1940s and '50s will be retired, but one of their replacements will be new coal.

Companies like Duke are betting that new coal plants using only slightly updated technology will compete successfully over the long haul against their three obvious competitors: natural gas, new nuclear reactors and old coal plants.

Duke is also building a generating station in Edwardsport, Ind., that will run on coal but will convert it to a gas first, allowing much higher production of electricity per ton. It turns the coal to a fuel gas, which it burns in a device resembling a jet engine.

The Duke plant is engineered to allow the addition of equipment to capture much of the carbon dioxide from the fuel gas. But so far, there is no commitment to add that equipment. Duke is seeking approval from regulatory authorities to bill customers for the cost of looking for a place to sequester the carbon dioxide if it were separated.

One keen observer of Edwardsport and others that could capture carbon dioxide is Denbury Resources, a company that buys carbon dioxide and injects it into oil fields in the Gulf Coast to make them produce more oil. Today, it pumps to the surface natural deposits of carbon dioxide.

But it is building one pipeline to gather carbon dioxide from industrial sources and is exploring other pipelines.

Ronald T. Evans, Denbury's president and chief operating officer, said that in the absence of carbon rules, traditional coal plants that did not capture carbon dioxide were still economical and strong. "I don't think you're going to see a massive reduction in coal," he said.

The Prairie State Energy Campus will have not only a power plant, but also a new coal mine that will supply 6.5 million tons a year.

Gathering carbon dioxide would be much easier from plants that gasify the coal, as Edwardsport will do. But at the Gasification Technologies Council, a trade group based in Washington, James Childress, the executive director, said he was not optimistic that many coal plants would switch to gasification.

Traditional coal plants like Prairie State, which pulverize coal into a fine powder and burn it, will dominate, he said. "The primary reason is the Clean Air Act allows it," he said.

And while some old coal plants may close as regulation of traditional pollutants like sulfur dioxide and nitrogen oxides gets tighter, many existing plants will run for years, he and others said. "If you have the installed base, these are cash cows; they're paid off," he said. "They're not going to change anything here."

Is it sensible to build new ones? "They think that over the long haul, coal is a good bet and it's going to be a lower-cost alternative to natural gas," he said. Does he agree that it is rational to build a plant that will emit copious amounts of carbon dioxide for decades? "The way the debate is going in this country, they may be right," he said.

"My opinion is that in the absence of a clear and present danger, it's going to be very difficult for a national policy" on carbon, he said. Some states will take steps to limit emissions, but "the coal states certainly aren't going to."

At the National Energy Technology Laboratory in Pittsburgh, part of the Energy Department, Kenneth C. Kern, the director of the office of systems, analyses and planning, described a series of plants coming into service between now and 2013. He said, "For the most part, this is simply playing out the plants that began development four or five years ago during the blip in interest in coal, in '05 and '06."

Global warming was not a foreign concept in those years, but high prices for natural gas at the time seemed a much more concrete factor, experts said. In fact, natural gas rose to $12 per million B.T.U.'s, a quantity sufficient to make about 150 kilowatt-hours, but has lately traded in the range of $3 to $4. "Right now, gas is uniquely low," Mr. Kern said.

After 2012, based on construction work under way, there will be a dearth of completions, he said.

Tom Smith, known as Smitty, is the Texas director of Public Citizen and has been fighting new coal and nuclear plants for years. He counts five coal plants under construction and four that have recently become operational. But it is the last gasp, he argued. For one thing, the price of natural gas is now so low that nothing else can compete, and for another, changes in federal policy have made it harder for co-ops and municipal electric companies to borrow money for coal.

"The underlying assumption may have changed," Mr. Smith said. "Regulators have jumped to the same conclusion as smart money, that coal is too risky to fund anymore, so there are fewer and fewer of these folks who are getting money."

But old coal plants, paid for years ago, can produce energy at low cost, sometimes as cheap as 2.5 cents a kilowatt-hour. A carbon price of $25 a ton could add 2.5 cents per kilowatt-hour, said Mr. Kern of the Energy Department. Some old coal plants could still be profitable in competitive markets at peak summer periods, when prices on the wholesale market go much higher. (The national average retail price of a kilowatt-hour at retail is about 10 cents.)

The challenge for old coal plants at the moment is not so much the threat of carbon taxes as new E.P.A. rules on emissions of sulfur dioxide, nitrogen oxides, mercury and particulates, and disposal of coal ash.

Some say that some decisions made in 2005 and 2006 are going to look pretty silly later. One reason is that the demand for electricity and its price are down all over the middle of the country, because of the recession.

"If you look at the likely pricing for the power from that plant in the next 5 to 10 years," said Howard A. Learner, executive director of the Environmental Law and Policy Center in Chicago, "and if you assume on top of that any serious price for carbon, it's hard to see why that could possibly have been a smart decision."

But Mr. Rao and some independent observers have another interpretation. Prairie State uses newer technology and will produce a kilowatt-hour for each 9,000 B.T.U.'s of heat. Some older plants require 12,000 B.T.U.'s.

Over all, Prairie State will need 15 percent less fuel, and emit 15 percent less carbon dioxide, per unit of energy sold. That means that even without rules on carbon dioxide, Prairie State will be very successful in the daily auction for electricity sales and will be chosen first to run, like a tall schoolyard basketball player who always gets chosen first in a pickup game.

On the other hand, if Washington gets tough with carbon dioxide, it will be a burden for Prairie State, but much worse for older plants, and Prairie State will be called on even more.

The only nonutility partner in the project, Peabody Coal, which acted as the developer, stresses that point. Vic Svec, a company spokesman, said one reason Peabody played that role was "to help set the template that it was safe to build new coal plants."

The project, he argues, is like a "private stimulus project," providing lots of high-wage employment for skilled workers from around the country.

In fact, John Foster, a boilermaker from Belleville Ill., who has been on the Prairie State job for two years, describes the work site as "kind of like a ‘Field of Dreams.' "

"If you look out here at 6:30 in the morning, all you see is headlights," he said, comparing it to the 1989 movie with Kevin Costner, who builds a baseball diamond amid corn fields about as remote as the fields here.

The site is crawling with welders, pipefitters, carpenters, electricians, crane operators, cement layers, inspectors, supervisors and a dozen other kinds of specialists.

It is one of the largest new power plants in the United States. And while it will be vastly cleaner in its output of conventional pollutants, it is not using cutting-edge technology, called "ultra supercritical." That technology can cut coal consumption, and carbon dioxide production, even more, but the builders already own all the coal.

It is in a seam seven feet thick covering about 35 square miles, a mere 200 to 250 feet below the surface, and no swing in the market price of coal or railroad bottleneck will affect their access.

It was not hard for the project to attract experienced workers and managers, and while many of them think a further slowdown is coming, they do not think this project will be the last.

And they make no excuses. The project's Web site proclaims, "We'd love it" if the plant could use wind rather than coal, but that there isn't nearly enough wind, and "we'll need to live in the real world until we reach ecotopia."

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Risking Arrest to Plant Trees on a Mountaintop Removal Site

By Morgan Goodwin

Huffington Post

24 October 2010

Today 44 volunteer 'reclamation workers' (activists) illegally marched onto a supposedly reclaimed mine site to plant trees. Why? Because the 'reclamation' efforts done by the mining company resulted in a barren hillside with sparse grass and baking sun - a far cry from the lush and diverse forest destroyed in the process.

The fight over mountaintop removal coal mining in Appalachia revolves around jobs. Even though the highly mechinized practice has drastically reduced the number of people employed in the mining industry, the proponents of mining say that West Virginia is poor and needs the jobs. Opponents say healthy and prosperous economies can be created in the area if only the destructive and poisionsous processes of the coal companies are stopped and the natual wealth is not destroyed.

John Johnson, forester and environmentalist said, "The coal industry does not attempt to return the landscape to its previous biodiversity - leaving it up to the citizens to reclaim it themselves. Fixing the ruined landscape will provide long term jobs for those put out of work by the abolition of mountaintop removal."

Lifelong Coal River Valley resident Junior Walk says, "Coal companies sure as hell aren't going to take it upon themselves to do something about it - some one's got to do it."

44 people walked out onto the mine site to plant 30 hemlocks, pen oak and tulip poplar trees, as well as planting chesnuts, walnuts, acorns. Some deployed a banner reading: "EPA We're Doing Your Job - Over 500 Mountains Destroyed - Reclamation Jobs Now!"

Mine security vehicles and police showed up moments later and negotiated with the activists. By 3:30pm all the trees had been planted and the protesters left the site without repurcussions. While technically tresspassing, it looks like the police didn't have the taste for arresting folks who are calling attention to what the mining companies should be doing.

To see just how agregious this shortcoming is of mining company policy towards reclamation, check out this report from NRDC earlier this year:

For years the mining industry has exploited a federal statutory provision that exempts them from restoring the land to its approximate original contour if there is a plan to develop the land for "equal or better economic use" such as "industrial, commercial, residential or public use."

However, NRDC's analysis - also using aerial imagery - confirms that nearly 90% of mountaintop removal sites have not been converted to economic uses.

That's right: Mining companies don't love mountains but they love bragging about how they restore mine sites for the benefit of local communities. Our study exposes Big Coal's broken promises by proving that post-mining economic prosperity is a big, flat lie.

Coal country politicians have largely supported the mining industry, even to the extreme detriment of American heritage, community health and the economic well being of Appalachia. In an election where Democrats and Republicans alike are rushing to bow at the altar of coal, voters in West Virginia, Kentucky, Tennesee, Virginia and elsewhere are often left to regulartory agencies like the Office of Surface Mining, the EPA, state DEP agencies and Mining and Mineral Services. Just getting them to do their job enforcing existing laws (like requiring reclamation) will be a huge victory in the fight to end mountaintop removal.

Want to help?

1. Email chfo@osmre.gov (Roger Calhoun chfo@osmre.gov Head field operator of Office of Surface Mining and Reclamaiton) Ask him why people are threatened with arrest for reclaiming mine sites? Shouldn't we be paying Appalachian residents to do reclamation work, not arresting them? Send them a link to this blog, or a photo or article, and make sure they feel the heat.

2. Go to the West Virginia Department of Environmental Protection and fill out their online form, asking the same questions.

Follow Morgan Goodwin on Twitter: www.twitter.com/mogmaar