Will Technology Save the Coal Industry — Again?

WASHINGTON, DC - OCTOBER 14: Sen. Joe Manchin III (D-WV) talks to members of the media at the Capitol Building on October 14, 2013 in Washington, DC. As Democratic and Republican leaders negotiate an end to the shutdown and a way to raise the debt limit, the White House postponed a planned Monday afternoon meeting with Boehner and other Congressional leaders. The government shutdown is currently in its 14th day. 
National Journal
Amy Harder
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Amy Harder
Oct. 29, 2013, 5:43 p.m.

Throughout the 1990s, in the face of en­vir­on­ment­al rules tar­get­ing acid rain and oth­er forms of air pol­lu­tion, Ap­palachia coal cleaned up its act, lit­er­ally. The in­dustry in­nov­ated and in­stalled new tech­no­logy, called “scrub­bers,” to burn its coal more cleanly.

Today the coal in­dustry faces an­oth­er round of reg­u­la­tions con­front­ing an even lar­ger en­vir­on­ment­al prob­lem: glob­al warm­ing. Tech­no­logy of­fers a solu­tion, at least in the­ory, but it’s not yet ready to be the sa­vior coal needs.

“When it came to the scrub­bers, we moved in­to that arena and did it well. It took us some time to do it, but we got there,” Sen. Joe Manchin, D-W.Va., said in an in­ter­view. So will it work this time around? “You gotta hope it does,” Manchin said in a des­pond­ent tone.

To sur­vive, let alone thrive, in a coun­try com­mit­ted to com­bat­ing cli­mate change, the coal in­dustry must de­vel­op so-called clean coal tech­no­logy that en­ables power plants to cap­ture car­bon in­stead of re­leas­ing it in­to the air. Fail­ure to do so could have ripple ef­fects throughout the eco­nomy. Coal’s share of our elec­tri­city mix is still pro­jec­ted to be 35 per­cent in 2040, down from 42 per­cent in 2011 and 53 per­cent in 1993.

En­vir­on­ment­al Pro­tec­tion Agency draft reg­u­la­tions for con­trolling car­bon emis­sions re­quire this car­bon cap­ture and se­quest­ra­tion tech­no­logy for any new coal-fired power plants. Coal-state law­makers and in­dustry ex­ec­ut­ives alike main­tain CCS is not ready for prime time, des­pite EPA’s as­sur­ances.

“CCS is a tech­no­logy that is feas­ible. It is avail­able today,” EPA Ad­min­is­trat­or Gina Mc­Carthy said in Septem­ber when an­noun­cing the rules. “We know that. We know that be­cause it’s been demon­strated to be ef­fect­ive.”

Feas­ib­il­ity doesn’t ne­ces­sar­ily mean avail­ab­il­ity.

“We be­lieve that this tech­no­logy can work be­cause we’ve proven it at the pi­lot scale,” said John Co­hen, vice pres­id­ent of gov­ern­ment af­fairs for Al­stom, a glob­al tech­no­logy com­pany that worked with the util­ity Amer­ic­an Elec­tric Power and the En­ergy De­part­ment on a pi­lot CCS pro­ject in West Vir­gin­ia. The pro­ject couldn’t get enough funds to get past the pi­lot demon­stra­tion phase.

“Un­til we can do the full-scale demon­stra­tion pro­ject, we can’t have a com­mer­cial of­fer­ing to the mar­ket­place,” Co­hen said. “No one is of­fer­ing a CCS product in the mar­ket.”

The hurdles fa­cing CCS tech­no­logy in­clude three big ones: costs, cheap nat­ur­al gas, and gov­ern­ment policy. Mc­Carthy has said EPA’s cli­mate rules will provide a mar­ket driver for this tech­no­logy. Co­hen doesn’t think so.

“It’s cart be­fore the horse,” Co­hen said. “At this point, the reg­u­la­tions are re­quir­ing a tech­no­logy that has not yet been de­veloped. That’s a prob­lem.”

Four large-scale CCS power-plant pro­jects are in the plan­ning phases in the United States, and just one is un­der con­struc­tion, ac­cord­ing to a data­base com­piled by the Mas­sachu­setts In­sti­tute of Tech­no­logy. The one pro­ject un­der way, owned by South­ern Com­pany and backed partly by DOE, has cer­tain char­ac­ter­ist­ics — in­clud­ing bal­loon­ing costs of $5 bil­lion so far — that make it un­likely to be a mod­el for wide­spread ad­op­tion of CCS tech­no­logy.

Co­hen said that costs would even­tu­ally come down on CCS tech­no­logy, as they did for scrub­bers in the 1990s, but that’s only if com­pan­ies can first prove it works on a large scale.

“At the mo­ment in the U.S., we do not see a path for­ward for a large-scale demon­stra­tion pro­ject un­til something changes,” said Co­hen, whose France-based com­pany op­er­ates in 100 coun­tries.

The factor Con­gress has most con­trol over that could change things for the bet­ter is provid­ing more money for CCS tech­no­lo­gies. Re­tir­ing Sen. Jay Rock­e­feller, D-W.Va., has said he will re­in­tro­duce his 2010 le­gis­la­tion provid­ing more CCS in­cent­ives, but it’s un­clear when or wheth­er he plans to fol­low through. Most oth­er cur­rent coal-state law­makers have chosen to fo­cus more on fight­ing EPA rules and less on CCS.

“If CCS is the best op­por­tun­ity we have to meet the stand­ards, it seems to me we could ad­vance the tech­no­logy some way or some­how,” Manchin said. The bill that he and Rep. Ed Whit­field, R-Ky., floated this week does noth­ing to ad­vance CCS tech­no­logy. In­stead, it bans EPA from re­quir­ing it on new coal plants un­til the tech­no­logy is more widely avail­able.

The coal in­dustry was able to ad­opt the scrub­ber tech­no­logy in the 1990s be­cause the gov­ern­ment worked with it, un­like today, Manchin lamen­ted.

“They’re not in­clined to be re­cept­ive to try and find bet­ter use of fossil fuels,” Manchin said of the Obama ad­min­is­tra­tion.

Mc­Carthy in­sists she is listen­ing and reach­ing out to the coal in­dustry to en­sure it re­mains vi­able amid Obama’s cli­mate agenda. Re­gard­less, it’s clear the Obama ad­min­is­tra­tion and the coal in­dustry and its al­lies are not get­ting along as well as they will need to. Clean-coal tech­no­logy needs a leg up from both the gov­ern­ment and private com­pan­ies to get powered up.

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