Carbon backlash: coal divides corporations

Carbon backlash: coal divides corporations

1st July 2007

By Steve James, Reuters

NEW YORK - U.S. coal mining companies, which for years have been branded the bad guys of global warming, are fighting back. They are questioning not only the science but also the motives of some of the big-name corporations who have made well-publicized commitments to cleaning up their act.

At a recent industry conference in New York, Arch Coal, one of America's "Big Four" producers, stressed the need for research and investment in "clean coal" technology that would allow the country to utilize its abundant reserves while weaning itself off foreign oil.

"If we want to address climate concerns, we need to invest more heavily in coal -- not less," Chief Executive Steven Leer told the McCloskey Coal USA conference.

"We cannot reduce foreign oil dependence without increased coal use," he said. "Debate can help advance clean-coal technology investment."

A more outspoken executive, Robert Murray, chairman and chief executive of Murray Energy Corp., warned the coal industry could collapse with the loss of 3 million to 4 million jobs if carbon dioxide emission controls are introduced.

He has even put his money where his mouth is by refusing to do business with Caterpillar Inc. -- a manufacturer of the very mining equipment his company needs.

"There are a number of companies that are promoting constraints on coal use to achieve greater profits and/or competitive advantages," Murray said at the coal conference.

He branded more than 20 major corporations that make up the U.S. Climate Action Partnership (USCAP) "un-American" for allying with environmental groups he calls "enemies of coal."

USCAP, which backs moves to cap carbon dioxide emissions, includes Caterpillar, General Electric Co., Dupont Co, AIG, General Motors, Dow Chemical Co, Johnson & Johnson, Pepsico Inc., Alcoa Inc. and ConocoPhillips.

"I've been trying to get their attention," Murray said. "(CEO) Jeffrey Immelt of GE and I debated this for about 45 minutes, but I didn't convince him of anything because he sells windmills ... he wants to see the global warming come along."

There was no immediate comment from GE. Caterpillar said that while it would not debate the science, it believes it is incumbent on industry to reduce emissions.

"Knowing this debate is going to get under way in earnest we're here to protect the interests of our customers, particularly coal," the truck and tractor maker said in a statement. "We can be more effective protecting those interests by supporting a single national mandate ..."

Congress is considering several bills that aim to fight global warming by putting tough limits on greenhouse gases. Supporters say the bills would provide incentives for companies to invest in technology to cut emissions.

Murray, whose private company produces about 30 million tons of coal per year, has formed the Coal-based Stakeholders Chief Executive Officers Group, comprising CEOs of railroads, some coal companies and utilities. It opposes so-called "cap and trade" regulations, arguing that caps on emissions will devastate the U.S. coal industry which fuels about 50 percent of the country's electricity generation.

Murray said he sent Caterpillar CEO Jim Owens a letter a few months ago telling him he would no longer do business with him - a decision he said will result in the loss of millions of dollars in business to Caterpillar. He also pointed out power company Exelon Corp's John Rowe, as "one of the biggest enemies of coal for decades because he's got nuclear."

Chicago-based Exelon, which is not a member of USCAP, said in a statement that Rowe is "a leading proponent of moderate and thoughtful climate change legislation that preserves all technological alternatives."

He co-chairs the National Commission on Energy Policy, which has advocated for a variety of technologies to address climate change, including clean coal and carbon sequestration. "And certainly John is an advocate for nuclear power."

USCAP includes six environmental groups, including the Natural Resources Defense Council, whose climate expert, David Hawkins said that getting big-name companies to join was crucial to achieving its aims. "They put the issue on the radar screens of many more members of Congress who no longer see it as an issue that environmental groups are exaggerating.

"These companies validate the seriousness of the issue," he told Reuters. Hawkins said there was "a serious shot of legislation being enacted in this Congress and signed by this president."