Obama's Support for 'Clean Coal' Opens a Pathway to Make the Most Polluting Industry Profitable
President Obama has issued marching orders for the rapid national adoption of "clean coal" technology. Last week, shortly after his budget address, he ordered a high-level task force to deliver a plan within 180 days determining how "to overcome barriers to the widespread, cost-effective deployment of CCS within 10 years, with the goal of bringing 5 to 10 commercial demonstration projects on line by 2016."
Obama's executive office memorandum looks like a big victory for the coal industry, which was already handed $3.8 billion in last year's stimulus act for carbon capture and storage (CCS) research and development and deployment. He did not simultaneously order a similar plan for a big roll-out of solar or wind energy to level the playing field.
Making good on campaign promises, the president is throwing the full weight of his administration behind a moonshot effort to make coal the "clean" energy technology of choice and open a federal pathway to a profitable future for one of the nation's most polluting industries.
Three factors have cemented Obama's support for carbon capture and sequestration technology: political necessity, economic opportunity and the backing of some of the most powerful mainstream environmental organizations operating inside the Beltway.
With climate legislation stuck in the Senate and perhaps in limbo until after the next presidential election, green groups are evaluating their next moves, trapped by concessions they negotiated with the coal industry, but betrayed by the politics, which has now left them without climate protection measures that were supposed to be part of the deal.
The political strategy was hatched during what Kert Davies of Greenpeace calls the "grim years of Bush." At the time, it offered a ray of hope for climate progress, he said, the touchstone of which was economic cooperation with polluting industry and big corporations.
NRDC, Environmental Defense Fund, World Resources Institute and the Energy Futures Coalition all had a hand in advancing the strategy, which centered on getting the coal and utility industries to the negotiating table; having them agree to a cap-and-trade system to put a price on carbon; and in return giving them generous concessions. The strategy included the calculation that coal industry and utility company interests could be split off from the interests of the oil industry, which stood staunchly and powerfully opposed to any form of carbon regulation.
They weren't nimble enough to change their strategy when political winds shifted, Davies said.
"The 'damage done' part is the hard thing," Davies said. "Once you've said those things and been on panel after panel and flown around the world to meetings, it's hard to back out."
At the Bloomberg Media Headquarters in New York last March with Obama already in office, David Hawkins of NRDC and and Mark Brownstein of EDF led the "Policy Needs" panel of a "Public Workshop on Carbon Capture and Sequestration," which their organizations co-sponsored. They argued that CCS would hasten climate policy adoption and called for the development of at least 5 gigawatts of CCS-enabled coal-fired facilities by 2015, within the context of a larger policy blueprint that included a cap-and-trade system.
About 5 gigawatts of CCS-enabled coal-fired power is what Obama asked his task force for last week, but the larger climate policy architecture was nowhere in sight.
"This clean coal task force is a catastrophe," Davies said. "Nobody is asking the administration for an ROI [return on investment] calculation. We're getting rolled."
CCS Still Expensive and Far Off
CCS technology is projected to be notoriously expensive. No full-scale demonstration plant has yet been built, and the pieces of technology that have to fit together add significant cost to operations.
Capturing carbon is the first step, and still quite expensive. It also requires the plant to burn about 25% more coal to power the capture process. Special pipelines need to be built to carry the CO2 in a supercritical state to suitable underground injection sites; these must be monitored for leakage and insured against catastrophe; and perhaps royalties must be paid to landowners for the use of underground pore space.
All this will take time to develop. A Department of Energy roadmap published late in the Bush administration (2007) projected that commercial-scale application of CCS would not be possible before 2030, saying
"As a technology and a research discipline, carbon sequestration is in its infancy."
And a little more than a month before Obama was swept into office, Joe Romm of the Center for American Progress, a think tank closely allied with the Obama administration, published a lengthy analysis filled with authoritative references which said,
"Unfortunately, CCS has four fundamental problems that have reduced enthusiasm for it recently and limited its likely role." Romm cited cost and timing first, followed by scale and permanence/transparency.
That's why Gillian Caldwell, executive director of 1Sky, a climate advocacy coalition, challenged Obama on the "mythology of clean coal" last week at an impromptu encounter, captured on video.
"No more clean coal. It's a unicorn. It doesn't exist," she said as she shook hands with Obama as he worked a rope line.
"I disagree with you. I disagree with you. We are not going to get all our energy from wind and solar in the next 20 years," the president replied. "They can’t do it. The technology’s not there.
"I’ve got a nuclear physicist in my Department of Energy who cares more about climate change than anyone, and he will tell you you can’t get it done just with that — so you’ve got to have a transition period to do all this other stuff. Don’t be stubborn about it."
But Stephen Chu, the nuclear physicist who is Obama's Secretary of Energy, was far more skpetical about clean coal before he joined the administration. "Coal is my worst nightmare," he used to say, before he entered government service.
Caldwell, remaining stubborn, suggested to Obama that his position was based on political calculation.
"This is not a votes matter," Obama responded. "This is a technological matter. It really is. I have looked into it."
Caldwell had the last word on her blog, where she pointed out that "renewable sources of electricity, like wind energy, are currently sold at one-third the price of even the rosiest CCS projections." With solar and wind technology both ready for commercial-scale deployment today, it is hard to discount the notion that political calculation is driving the policy support for technology that is two decades away from being ready.
Electoral Map Revealing
Obama's support for CCS has been consistent. On the campaign trail, he famously said:
"This is America — we figured out how to put a man on the moon in 10 years. You tell me we can't find a way to burn coal that we mine right here in the United States of America and make it work?"
His pronouncement made its way into ads produced by the coal lobby, which only helped his presidential bid in key toss-up states. Without supporting coal, Obama might have never made it to the White House.
That's why his runningmate's coal gaffe on the campaign trail was quickly corrected. Biden told voters in Ohio that neither he nor Obama supported clean coal. The McCain campaign tried to make hay from the uninformed indiscretion, and the Obama camp dispatched Rep. Rick Boucher (D-Va.) to reassure voters that the Democratic ticket was "a friend of coal." Boucher later played a key role in extracting the lion's share of concessions for the coal industry in the Waxman-Markey American Clean Energy and Security (ACES) climate bill that emerged from the House last year.
Obama's electoral landslide in 2008 was built on success in coal friendly states. Indiana, Colorado, Ohio and Virginia had voted for Bush in 2004, but in 2008, ended up in Obama's column. Looking to 2012, his campaign team is not going to jeopardize the advantage it secured. If Obama loses those states by being lukewarm on the future of coal, the election would then ride on maintaining a razor-thin margin of victory in Florida and North Carolina.
Instead, in August of this year, he'll be handed a plan for a massive expansion of clean coal from the task force he constituted last week, and he may be able to use it to help Democrats in November mid-term elections, as well as in the run-up to his own re-election bid in 2012. Sure to be of value is the ongoing $120 million ad campaign from the coal lobby that is coincidentally airing new spots for clean coal starting this week.
Economic Opportunity of Coal
Support for coal also offers the Democrats an opportunity to make friends in some new places and cement old ties — the places on the map where electoral opportunity intersects with the nation's largest coal reserves.
Montana has the mother lode, 25% of the nation's coal reserve. With barely a million people whose per capita income is close to the national bottom, Montana is a wide-open frontier that Obama barely lost in 2008, after Bush had carried it handily by a 20-point margin in 2004.
Solidly Republican Wyoming, West Virginia and Kentucky rank third through fifth in coal reserves, after second-ranked Illinois — Obama's home state. With jobs and economic issues at the top of the electoral agenda for the foreseeable future, Obama's clean coal policy becomes a vote-getter in all these places.
Democrats cannot afford to alienate voters in Kentucky and West Virginia — coal mining cultures hard hit by unemployment — even if the coal industry provides questionable economic benefit. The language of clean energy there is still a tough sell, with the imagination wanting for images of what a solar or wind energy job would really look like, and industry still calling the political shots.
In insecure economic times, the legacy energy industries have another advantage: They play powerfully inside a global economic system built on the assumption of limitless economic growth, and which is in dire need of boost in the wake of the US mortgage crisis. The coal supply remains a commodity that needs to be mined, shipped, exported and traded — a BTU bonanza for the nations that have it in abundance like the U.S., Russia, China, India and Australia.
Further, with China already leading the world in the export of solar and wind hardware, CCS offers the prospect of being an exportable big ticket advanced technology that even the Chinese will want to buy.
Coal thus also figures into a larger geopolitical calculation, which together with the exploitation of tar sands in Canada — which Obama has not opposed — offers energy security to North America and reduced dependence on oil from the Middle East. It is a carbon-heavy realignment of energy geographies that leaves fossil fuel at the heart of the global economy, despite talk of a coming transformation. In the logic of the financial system, big investments now lock in systemic commitments for a generation or more.
Debate Lacks Transparency
The debate over the clean energy future has for the most part been conducted inside a rhetorical bubble filled mostly with talking points and sound bites. The analysis that Obama gave Caldwell has not been argued publicly. Various programs for a moonshot development of solar and wind technologies coupled with energy efficiency programs have been publicly floated, but none has had the benefit of an independent head-to-head comparison with fossil fuel energy options outside the political process.
These proposals haven't had the kind of political support that CCS has captured, even though one of them published by Scientific American, projects that solar energy could deliver 69% of the nation's electricity by 2050 for $10 billion a year — roughly the cost of the Iraq war. Under the public spotlight, which would look more like the mythical unicorn: A massive buildout of solar capacity or CCS?
Obama for his part has not helped create transparency, blurring meaningful distinctions between types of "clean" energy. In his State of Union message, in the paragraph devoted to clean energy innovation, he omitted solar and wind and instead listed nuclear energy, biofuels, clean coal and offshore drilling. It set off howls of protest, which he calmed a few days later by announcing that the federal government would reduce its own emissions 28% by 2020.
Still, there has been no serious discussion of what the future could look like with a vastly contracted domestic energy sector, one in which, after a period of enormous investment, power is generated at nominal cost from the sun shining and the wind blowing. It is a notion that could sit well with families, imagining energy prices permanently declining a generation from now, but it doesn't fit well with prevailing economic theory that requires limitless growth to imagine future prosperity.
CCS, on the other hand, fits the limitless growth model like a glove, with the technology expected to double the size of the fossil fuel industry from its current size, if it is given two decades of government support to grow.
Then, the fossil fuel industry would reap profits from both ends of the energy lifecycle: selling power, as it already does and will continue to do, and getting paid again to dispose of the CO2 pollution underground. It is easy to see why carbon-free energy disrupts this new model of continued fossil fuel profitability.
"A major multi-year campaign against coal seems inevitable at this point," Davies of Greenpeace said. "We're not seeing anyone inside the administration with a coherent climate strategy, with their hand on the rudder. Even energy efficiency — investments that are of the populist, pay-back-the-consumer variety — have taken a back seat to Big Coal."
Behind closed doors, green groups from across the spectrum are re-evaluating climate strategy, with a new young generation of leaders taking the helm of major organizations more aloof from the inside Washington game and ready to question the meager results of the past decade of climate strategy, which seems now to have imploded: Phil Radford at Greenpeace, Eric Pica at Friends of the Earth, and Michael Brune, who will succeed Carl Pope as head of the Sierra Club later this month.
Brune is an interesting choice for the Sierra Club at this difficult moment for the environmental movement. Skilled in corporate campaigns that successfully have pressured industry to make meaningful concessions, Brune brings a vocabulary of direct action to a fairly staid organization with a vast national field infrastructure. Observers are watching intently what he will do with the organization's highly successful Beyond Coal campaign. In his book, Coming Clean, he had this to say about clean coal:
"But when you hear coal advocates describe 'clean coal' as a way to fight climate change, put your BS detector on alert. The dirty secret of 'clean coal' is that, after more than twenty years of government and industry research and billions in subsidies, not a single coal plant in the world can be called clean. Not a single power plant has ever captured all of its carbon dioxide emissions, much less compressed the carbon and stuffed it underground. ...
"Why, then, does 'clean coal' have so many powerful and vocal advocates? It boils down to profits, politics and relentless PR."
And now a Clean Coal president.
It looks like a period of regrouping and defense for climate advocates has begun, with the IPCC also under siege and snow even falling heavily in Washington this week. As with CCS, in return for a carbon price signal and performance standards for coal plants, green groups were ready to concede amendments to the Clean Air Act to limit the reach of EPA into the CO2 emissions of the utility industry. Even though the climate bill is on hold, Republicans, with some help from Democrats, are smelling blood and going after EPA anyway, to get what their coal and oil industry campaign contributors want without conceding anything.
With Obama's unequivocal support of clean coal, his EPA — thanks to a 2007 Supreme Court ruling on the Clean Air Act — is now the last thing standing in the way of open season for the coal industry to expand without concern for carbon regulation.