Proposed Coal Plants Hit Snags
More Than 50 Projects Halted Over Wide Variety
Jan 29, 2008 - Los Angeles Times
America's headlong rush to tap its enormous
coal reserves for electricity has slowed abruptly,
with more than 50 proposed coal-fired power plants
in 20 states canceled or delayed in 2007 because of
concerns about climate change, construction costs
and transportation problems.
Coal, touted as cheap and plentiful,
has been a cornerstone of President Bush's plans to
meet America's energy needs with dozens of new power
plants. Burned in about 600 facilities, coal produces
more than half of the nation's electricity.
But urgent questions are emerging about
a fuel once thought to be the most reliable of all.
Utilities are confronting rising costs and a lack
of transportation routes from coal fields to generators,
opposition from state regulators and environmental
groups, and uncertainty over climate-change policies
"Coal projects need more regulatory
certainty before any new ones are going to get built
in the near future," said David Eskelsen, a spokesman
for PacifiCorp, which serves more than 1.6 million
customers in six Western states. "The current situation
does make utility planning very challenging."
Just a few weeks ago, PacifiCorp dropped
plans for two coal- fired power plants in Utah, citing
the many unknowns in assessing the costs and objections
on global warming grounds from a major customer: the
city of Los Angeles. PacifiCorp said in filings with
the state of Utah that it hadn't found a substitute
for production that it will need to bring online in
2012 and 2014.
The setbacks have energy regulators
jittery about the prospects for meeting America's
ever-increasing hunger for electricity. They say that
any delays in building new capacity - coal-fired or
otherwise - add pressure to an already strained electricity
infrastructure, raising the prospect of shortages
or sharply higher prices.
Energy planners say coal needs to be
in the mix because the other mainstay fuels for generating
electricity also have serious drawbacks. Natural gas
has proved volatile in both price and supply. Nuclear
power plants are costly and take much longer to build
- and the problem of radioactive-waste disposal remains
"We're very close to the edge," said
Rick Sergel, who keeps a close eye on the grid as
chief executive of the quasi-governmental North American
Electric Reliability Corp. "We operate under tight
conditions more often than ever. We need action in
the next year or two to start on the path to having
enough electricity 10 years from now."
This fall, regulators in Kansas and
Washington state denied applications for coal plant
permits because of concerns about carbon dioxide emissions.
After Republican Florida Gov. Charlie
Crist said in October that he wasn't a "fan" of coal,
utilities postponed plans to build coal plants in
Tampa and Orlando.
Xcel Energy has told Colorado officials
that it plans to close two coal plants and add 1,000
megawatts of wind and solar power, in addition to
a new natural-gas plant. The company wants to cut
its carbon dioxide emissions 10 percent by 2015.
In Nevada, Sierra Pacific Resources
delayed construction of a coal plant and moved up
the schedule for a natural-gas-powered plant instead.
The Tennessee Valley Authority decided
in August to add a $2.5- billion unit to a nuclear
power plant rather than construct a new coal facility
- the other main option - because of the uncertain
Altogether, 53 coal-fired plants were
canceled or delayed in 2007, according to Global Energy
Decisions, a private consulting firm that tracks power
plants for the Department of Energy.
In the near term, coal clearly will
remain a part of the American energy picture. Even
as the postponements and terminations pile up, plans
for new coal-fired power plants continue to advance
in New Mexico, Mississippi and Indiana.
Although TXU Energy canceled eight coal-fired
power plants it had proposed in Texas, the utility
is going ahead with three others.
Last month, an energy industry consortium
announced plans to build a government-subsidized power
plant in southern Illinois to demonstrate low-emissions
coal technology. But the ballooning cost of the FutureGen
plant - now projected to be about $1.8 billion, nearly
double its original estimated price tag - has drawn
criticism from the Department of Energy, which could
delay or kill the project by withholding funds.
The growing push in Washington to do
something about global warming is a major factor that
affects the cost of burning chunks of solid carbon,
by far the dirtiest way to manufacture power.
A recent study by the industry-funded
Electric Power Research Institute projects that coal
power will cost more than nuclear power or natural
gas by 2030 if coal's carbon dioxide problem is solved
the way most experts envision. Still unproven, that
method involves separating carbon dioxide from the
gas stream before it heads out of the stacks, collecting
the vapors and then storing them underground. That
would also require a new network of pipelines to move
carbon dioxide from the power plant to a geologically
Another industry analysis predicts that
wholesale electricity prices will rise 35 percent
to 65 percent by 2015 if the Warner- Lieberman climate
change bill - one of the more conservative plans put
forward in the Senate - is enacted.
A more immediate challenge is transportation,
from missing links in the rail routes to silted-up
Great Lakes shipping channels, which raise concerns
that coal may not be so simple to get at after all.
"Can coal deliver?" asked Gary Hunt,
president of Global Energy Advisors, a Sacramento-based
unit of Global Energy Decisions. "The answer is no,"
he said - not without "billions and billions" spent
on improvements for mining capacity, railroads and
Powder River Basin
About 40 percent of the coal that America
burns comes from the Powder River Basin in Wyoming
and Montana. Sought after for its low sulfur content,
the product is sent all over the country on trains
more than 100 cars long. But only two rail companies
serve the basin, and for 100 miles they share one
set of tracks.
That caused trouble in spring 2005,
when coal dust built up between the ties, snow and
rain fell on the tracks, and the resulting slush caused
two derailments. The ensuing bottleneck delayed coal
deliveries for months. Utilities started hoarding
the coal they had on hand, and ran their more expensive
natural-gas plants more often. They filed for rate
hikes, and at least two sued their rail carriers.
Railroads are investing about $200 million
to improve and expand the tracks leading out of the
Powder River Basin, and they point to record cargoes
this year. But the National Mining Assn. still has
concerns about the future, spokesman Luke Popovich
said. "Capacity is adequate now, but it's close to
being inadequate," he said.
In the coal fields of southern Illinois
and Indiana, a mining renaissance is hoped for - but
no north-south rail line connects them with Chicago
and the Great Lakes.
Purdue University recommends building
a 300-mile "Indiana coal corridor" - at a cost of
about $1 million a mile.
Overall, the Assn. of American Railroads
estimates that $148 billion needs to be invested in
freight infrastructure over the next 28 years. The
industry says it needs federal assistance to help
it cover about $39 billion of that cost.
We Energies, which provides electricity
in Wisconsin and Michigan, said it had faced at least
$45 million in higher fuel costs as a result of rail
disruptions. Like other producers in the Upper Midwest,
the company tried to find relief by shipping coal
across the Great Lakes. But lake channels have silted
up, creating a "dredging crisis," in the words of
James H.I. Weakley, president of the Lake Carriers'
The Lake Erie port of Dunkirk, N.Y.
- site of a coal-fired power plant - closed to shipping
in 2005. A freighter ran aground at the Lake Huron
port of Saginaw, Mich., last year. With ships loading
6,000 to 9,000 pounds less than their capacity in
order to stay afloat in the shallower channels, coal-cargo
totals on the lakes this year are down 8% from a year
ago, the carriers' group said.
The domestic transport problem has led
some coal customers to look overseas for supplies.
Despite the promotion of coal as crucial to energy
independence, imports have been rising since 2003.
For example, Southern Co., the largest power supplier
in the Southeast, brings in nearly 19 percent of its
supply through East Coast ports from Colombia, Venezuela
and Russia, said W. Paul Bowers, president of generation
and energy marketing.
Coal's advocates say they are still
optimistic about the future, because America has 200
years' worth of reserves - and growing electricity
needs. "If you don't want to use coal," asks Janet
Gellici, executive director of the American Coal Council,
"which 12 hours of the day don't you want electricity?"
Decisions up in the air
In any case, coal producers say, surging
worldwide demand, especially from China and India,
indicates there will be a healthy global market for
their product. Indeed, that demand has helped drive
up the cost of coal, which has been at record levels
for much of 2007, which in turn drives up the potential
cost of coal-fired energy.
The changing coal picture is making
it hard for America's energy planners. Decisions about
where power plants are located and when they are built
can also determine where - and whether - new transmission
corridors are built. And that could create spillover
effects that hurt the availability of cleaner sources,
like wind, that would use the same lines.
With power plant decisions up in the
air, there's been a lag in seeking new transmission
lines, said Suedeen Kelly, who sits on the Federal
Energy Regulatory Commission. And because the transmission
lines - like power plants - take years to move from
the proposal stage to operations, "ideally, you should
be starting to build these transmissions lines today,"
It's tough for those who would build
power plants to make billion- dollar commitments that
will last for the next 50 years while trying to guess
what's going to happen in Washington. The White House,
the Senate and the House of Representatives are sharply
divided over versions of global warming legislation
that could provide answers.
The president's threat to veto the energy
bill forced congressional Democrats to drop a requirement
for utilities to meet targets for use of renewable
energy, such as solar and wind power.
Bush has also signaled that he'll reject
any global warming legislation that includes mandatory
carbon limits. The proposals are controversial in
Congress as well.
This could mean at least another year
of jousting - and another year of indecision.
For environmentalists, a pause in the
rush to coal is a good thing.
"It's the silver lining" in an otherwise
clouded energy picture, said Bruce Nilles, who heads
the Sierra Club's National Coal Campaign.
More important is which energy sources
utilities turn to in its place, he said.
"That's what this is all about: whether
they stick with the old way or we transition to a
new, clean way of making energy.
Originally published by LOS ANGELES
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