Smoke and mirrors: the illusion of "clean coal"

The "Clean Coal" Lobbying Blitz

By Marianne Lavelle

The Center for Public Integrity Investigative Journalism in the Public Interest

20th April 2009

They've brought coal above ground. They've put the black rock on billboards in the swing states, and they've splashed it on full-page ads in /CQ/ /Weekly/, /Roll Call/, /Politico/The Washington Post.

They sponsored presidential debates on CNN, and their "clean coal" boosters were a fixture on the campaign trail. They've rolled out a series of TV spots from the firm that promised that what happens in Vegas will stay in Vegas. As Butch Cassidy might say, "Who are those guys?"

They're the American Coalition for Clean Coal Electricity , a collection of 48 mining, rail, manufacturing, and power-generating companies with an annual budget of more than $45 million - almost three times larger than the coal industry's old lobbying and public relations groups combined. ACCCE is just celebrating its first birthday, but it has already become a juggernaut shaping the terms of the climate change debate on Capitol Hill - even while weathering a high-profile assault by critics who accuse it of peddling hot air. ACCCE's considerable impact will be on display this week at House Energy and Commerce Committee hearings on a new draft climate bill penned by panel chairman Henry Waxman, a California Democrat, and Energy and Environment Subcommittee Chairman Edward Markey, a Massachusetts Democrat.

Just a year ago, Waxman and Markey backed a moratorium on new coal-fired electricity plants. But their latest draft would allow new coal plants through 2015, if they are retrofitted to cut carbon dioxide output some 40 to 60 percent within another decade.

The technology to do that does not yet exist, but not to worry: the new measure would set up a $1 billion-a-year clean coal research fund to help. While not, of course, endorsing an approach that could fundamentally reduce U.S. coal demand, ACCCE has nevertheless declared itself "encouraged that the¦ draft focuses on the key role that coal plays in meeting growing U.S. electricity needs." Greenpeace, meanwhile, has objected to "the untold billions of dollars in handouts [to the coal industry] for the false promise of carbon capture and sequestration."

For ACCCE, there's little doubt the new legislation represents significant progress - progress with roots that go back at least five years to a strategy hatched by two genial Kentucky natives with ties to moderate Democrats. One of them, Steve Miller, had been a campaign manager for former Democratic Kentucky Governor Brereton Jones, before taking the helm of an earlier coal industry public relations effort, the Center for Energy and Economic Development.

The other, Joe Lucas, worked at a Kentucky state mining agency and the federal Mine Safety and Health Administration, and then handled coal-related communications for Clinton-era Energy Secretary Hazel O'Leary. Ten years ago, Lucas took over as spokesman for another coal industry group - Americans for Balanced Energy Choices - that was working hand-in-hand with Miller. By 2004, though, Miller and Lucas sensed a changing landscape - a landscape transformed by growing concern over global warming.

The Bush administration was friendly enough, but the coal industry was grappling with increasingly aggressive activism at the state level. Not only were states suing the U.S. Environmental Protection Agency to force action to curb carbon dioxide, the northeastern states were actually banding together to form their own program to control utility carbon emissions. A memo from Miller to Irl Engelhardt, then chief of the leading mining company, Peabody Energy, first published in 2004 by Energy Washington Week newsletter, elaborated on efforts to counter the state activism, but also spelled out the need for a positive message.

"Our belief is that, on climate change like other issues, you must be for something rather than against everything." And another need was becoming obvious. Said Lucas more recently, "It was clear that a much larger budget was necessary."

In 2007, he and Miller told the firms behind previous efforts that the election year of 2008 and the years following offered both opportunities and "strategic requirements" for a more aggressive effort. Not only did the Democratic presidential candidates support action on global warming, Republican frontrunner John McCain had long championed the issue as well. And international negotiations kicking off in late 2009 would put the pressure on the United States to lead on climate policy.

A New Stand

The coal companies agreed, and launched an expanded campaign in late 2007. Still under the banner of the old name, Americans for Balanced Energy Choices, coal billboards and radio spots began to appear amid the primary blitz of candidate ads in Iowa, Nevada, and South Carolina. The group sponsored CNN's coverage of the primary debates, and a new iconic image - an orange power cord plugging into a lump of coal - appeared. In April 2008, as the Senate was about to consider major climate legislation, a new name, the American Coalition for Clean Coal Electricity, was minted. But the coalition also unveiled something more important than a new moniker - a new stand. ACCCE would support mandatory limits on carbon dioxide as long as legislation met a set of principles that encouraged "robust utilization of coal."

Lucas says ACCCE's effort to sell that stand is built around a single principle: -"Public opinion shapes public policy."Hence, the unprecedented blitz of direct-to-consumer advertising by an industry that doesn't sell products directly to consumers. The group used about 40 percent of its budget last year on television ads spotlighting abundant, affordable coal. And promoting faith that technology could address the issue of coal's carbon emissions. "I believe" was the title of one round of ads. ACCCE's new TV spot skips the clean question and focuses on "coal, the source of half of our electricity" and how it will help generate jobs to "get our economy back on its feet."

The American Coalition for Clean Coal Electricity has run an advertising blitz promoting coal as an abundant, affordable, and potentially clean energy source. The effort seems to be having some effect. On Election Day, several months into its campaign, ACCCE released its own poll of "opinion elites" - educated, politically involved professionals - showing 72 percent believed technology would pave the way to clean coal within 20 years, the highest level of support the industry group had seen in a decade of tracking. No other substantial polling on the subject has been undertaken.

The ACCCE ads were developed by R&R Partners, the Las Vegas-based public relations agency known best for its wildly successful "What happens here, stays here" campaign for hometown tourism. But R&R, with offices throughout the West and in Washington, specializes in advertising linked to public policy advocacy.

Environmentalists might applaud its past campaigns to encourage water conservation in Nevada. But throughout its 35-year history, R&R also has worked for Nevada's massive gold and metals mining industry - most recently helping fend off efforts to force the companies to pay federal royalties. R&R's variety of work with the National Mining Association also made it a natural for the "clean coal" drive.

But is there any such thing as "clean coal" really, when it comes to greenhouse gases? The concept would only be possible with technology that captures carbon dioxide at the power plant and stores it underground or in some other form. The chemical industry for decades has captured carbon dioxide, and the oil industry long has injected it into the earth to increase crude well output. "All the components are commercial today," says Massachusetts Institute of Technology researcher Howard Herzog.

But no one has put the parts together in a coal-fired electricity plant that eliminates carbon dioxide emissions. Only one small carbon capture pilot project exists at a power plant, opened last fall in Germany. In the United States, several demonstration projects were planned, then put on hold due to rising costs - the best known being the FutureGen project in Illinois, which the Bush administration withdrew support from last year. The federal stimulus package, though, allocated $3.4 billion for carbon capture research, which is expected to jump-start efforts like a project under construction in Edwardsport, Indiana, by Duke Energy - an ACCCE coalition member. Energy Secretary Steven Chu recently told Congress it would take a decade to prove the technology through demonstrations. Adds Herzog: "If you define commercial as also being cost competitive in the marketplace, then we may have a way to go after that."

A widely cited McKinsey & Co. study estimates the technology won't be commercially deployed until 2030.

A Multi-Front War

It's that last point that has environmentalists counterpunching with vigor against ACCCE. Since December, the Reality Coalition , a group of environmental interests led by former Vice President Al Gore's Alliance for Climate Protection, has run television ads of its own and plastered billboards in the nationâl capital with the message: "In reality, there's no such thing as clean coal." The coalition also has Oscar-winning filmmakers Joel and Ethan Coen directing ads spoofing ACCCE as a pitchman peddling room-blackening air spray that "harnesses the awesome power of the word clean."

David Hawkins, director of climate programs for the Natural Resources Defense Council, supports carbon capture research but says ACCCE's approach won't spur needed private investment. "They're going to argue any climate program should be so slow-acting that essentially it doesn't change business practices in the next 20 years or so, and that is simply incompatible with the needs of climate protection," he says. "They have concluded it's not politically viable to maintain a "just say no" position, so now it's "just say manana""!

Brian Hardwick, a spokesman for the Reality Coalition, won't say how much his group is spending on advertising, but says it aims to continue to counter coal's messaging. "They've made a business decision, that it's cheaper to spend $40 million on lobbying and advertising than hundreds of billions needed to make coal clean", he says. "They've made a calculation that if they can stall, delay progress and mislead, they can avoid that investment."

However one interprets ACCCE's message, it has the power of well-heeled and politically engaged companies behind it. Amid the punishing economy of 2008, the top five U.S. coal mining companies saw their profits more than double to $1.9 billion. And the industry is determined to use a slice of those profits to deliver its message. Senate disclosure forms reveal that ACCCE spent $9.95 million on Washington lobbying last year, far more than any other group devoted to climate change - although ACCCE says the figure was inflated because it included advertising and grassroots advocacy that most groups don't report.

Political action committees and individuals employed by ACCCE member firms, including many top executives, contributed $15.6 million to federal campaigns in the 2008 election cycle - with a reach so wide that 87 percent of Congress received money, according to data from the Center for Responsive Politics. Neither Waxman nor Markey logged contributions, but the vast majority of their Energy and Commerce Committee colleagues did. Four key panel members, Chairman Emeritus Representative John Dingell, a Michigan Democrat, Representative Rick Boucher, a Virginia Democrat, and Republican ranking and deputy ranking members Joe Barton of Texas and Roy Blunt of Missouri, were among the top 20 clean coal cash recipients.

The No. 1 beneficiary was Republican Senator John McCain of Arizona, with $302,474 contributed to his presidential run. In an election that saw Democratic candidates with a 60-40 fundraising edge, ACCCE-member giving tilted 61-39 to the GOP.

But President Obama was the No. 2 recipient, with $241,870 from ACCCE company employees. In last year's presidential election, employees of ACCCE-member companies and political action committees contributed more heavily to John McCain than Barack Obama, reflecting the GOP tilt in their donations. Obama's pro-coal statements have been a particular point of pride for ACCCE. Around Inauguration Day, the group ran TV ads featuring a clip of Obama at a Virginia rally last fall touting clean coal technology.

"We figured out how to put a man on the moon in 10 years; you can't tell me we can't figure out how to burn coal that we mine right here in the United States of America and make it work," Obama said. It is also easy to find campaign clips of Obama remarking that "coal is really dirty" and that cleaning it up is "going to take a major investment -¦ because we don't have the technology to do it right now."

But ACCCE prefers to stress the positive, and its Behind the Plug blog has kept a running catalog of remarks by Obama and administration officials expounding on coal's role in the nation's energy future.

Confidence and Complexity

But there's no doubt that role is placed in jeopardy by any effort to limit the carbon dioxide emissions linked to global warming, as Obama has pledged to do. Electricity generation is the largest single source of greenhouse gas emissions, and the most carbon-intensive fuel - coal - provides half of U.S. power.

"If you don't understand how important coal is to America's energy future, and as a driver of low-cost energy in this country, then it is somewhat simple to come up with a climate policy -" just regulate coal plants," says Lucas, ACCCE' vice president and chief spokesman. "If you understand those drivers, then policy gets more complex."

That complexity will no doubt be revealed in this week's hearings. And ACCCE isn't taking any chances. A few weeks back, the group hired a new leader for its Capitol Hill efforts, veteran energy lobbyist Paul Bailey - a nuclear engineer by training who has worked for the largest oil and electric power industry organizations.

"He is not just an access lobbyist," says fellow energy lobbyist Linda Stuntz, who worked with him in the Department of Energy during President George H.W. Bush's administration. "He is uniquely effective because he has the capability to do the analysis himself." She'd expect Capitol Hill staff to seek his input when sorting through arcane and complex climate legislation concepts. Lucas says ACCCE is facing the upcoming climate policy debate with confidence, despite the pummeling of the Coen brothers ads and other critics.

"It has not had the desired effect with regard to policy discussions," he says. "Not so long ago, people questioned whether coal was going to be a fuel for the future. Clearly there are fewer and fewer people who don't think it will be."

Staff writer Te-Ping Chen contributed to this report.