July 2, 2013

Coal industry switches gears after president's energy push

Things were turning around for coal before Barack Obama announced a green energy plan.

By MATTHEW BROWN/The Associated Press

(Continued from page 1)

click image to enlarge

Mechanized shovels like this one near Decker, Mont., could be less busy in the future if President Obama’s climate change initiative takes effect.

AP file photo

click image to enlarge

The Colstrip Steam Electric Station emitted more than 15 million tons of carbon dioxide in 2011, roughly equivalent to emissions from about 3 million cars running for a year.

AP file photo

Among utilities elsewhere in the country, the trend away from coal has been well underway over the past several years. Rock-bottom natural gas prices -- coupled with huge price-tags to clean up mercury and other pollutants from burning coal -- drove many utilities to simply switch fuels.

Those pressures finally started to ease this year: Demand from utilities started to rise as coal stockpiles dwindled. Proposals for major new mines by Cloud Peak Energy and Arch Coal, Inc. gained traction. And coal finally started to reclaim its competitive edge as gas prices rose.

Colstrip is among those plants that have remained open, in part due to heavy capital investments. That includes $88 million spent on air pollution controls since 2000, according to PPL Montana, which co-owns the 360-employee plant and operates it on behalf of five other utilities.

Carbon dioxide controls would cost far more: $430 million to install the equipment, plus annual operating and maintenance costs of $900 million, according to a PPL study from several years ago.

That would equate to $53 for every ton of coal burned, the company said. That's about five times the price of the fuel itself in the nearby Powder River Basin, according to pricing information from the Energy Information Administration.

Still, PPL representatives and others in the industry see room for maneuvering before carbon capture becomes mandated. Key details of the administration's plan still must be worked out, including the scope of emissions cuts and their timetable. The broad goal is to achieve a 17 percent reduction in greenhouse gas emissions below 2005 levels by 2020.

Assuming the goal doesn't shift, the key question will be how those reductions are spread among different sectors of the economy, from transportation and power production, to manufacturing.

Even without the president's latest announcement, the Supreme Court ruled five years that carbon dioxide and other greenhouse gases are pollutants that the government must regulate, said Quin Shea, vice president of the Edison Electric Institute, which represents investor-owned utilities in the U.S. and has worked with the administration on the climate issue.

"A lot of our friends in other industries and states and on (Capitol) Hill miss the fact that this isn't optional," Shea said. "At the end of the day, we will be protecting as much coal as we can."

 

Were you interviewed for this story? If so, please fill out our accuracy form

Send question/comment to the editors




Further Discussion

Here at PressHerald.com we value our readers and are committed to growing our community by encouraging you to add to the discussion. To ensure conscientious dialogue we have implemented a strict no-bullying policy. To participate, you must follow our Terms of Use.

Questions about the article? Add them below and we’ll try to answer them or do a follow-up post as soon as we can. Technical problems? Email them to us with an exact description of the problem. Make sure to include:
  • Type of computer or mobile device your are using
  • Exact operating system and browser you are viewing the site on (TIP: You can easily determine your operating system here.)