Coal Industry Casts Itself as a Clean Energy Player

by admin February 28, 2017 at 1:10 am

Last year, total United States coal production was 18 percent lower than in 2015 and was the lowest level since 1978. Many companies were forced into bankruptcy. With gas prices rising in recent months, coal made a modest rebound at the end of last year, especially in the Powder River Basin of Montana and Wyoming, where the production economics are generally best.

Vic Svec, a Peabody senior vice president, said that his company was looking to make “a fresh start” as it comes out of bankruptcy, and that part of that fresh start was recognizing that fossil fuels “contribute to greenhouse gas emissions and concern regarding these emissions has become part of the global, societal regulatory landscape.” He added, “There is a market for low-carbon energy sources, and we want to be part of that future.”

Environmentalists say they believe that the coal industry, having dealt with a sharp downturn in recent years and facing an aggressive investor divestment movement, may be shifting its views on climate change more for its own business interests than any newfound love for the environment.

“To the extent that they are saying things that seem much more rational than in the past,” said David Hawkins, director of the climate program at the National Resources Defense Council, “they are trying to persuade skeptical investors that coal has a future.” Nevertheless, he added that his group was willing to work with the companies, even while it was suing them in court on other issues, “if they are willing to join in properly crafted legislation.”

The carbon legislation, introduced last year, would increase the federal tax credit for capture and sequestration to $50 per ton of carbon dioxide from $20. And it would expand available credits by more than a third for permanent storage for the purpose of flooding the carbon into declining oil fields to coax production. The method, already popular in West Texas and supported by the oil and gas industry, gives utilities that deploy the technology an added revenue stream.

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When introduced, the measure had broad support from senators as varied as Sheldon Whitehouse, a Rhode Island liberal who is active on climate issues, and Mitch McConnell, the Republican leader from Kentucky, who is one of the strongest backers of the coal industry in Congress. Proponents are preparing to reintroduce the legislation, and coal executives say they hope the Trump administration will get on board.

Senator Heidi Heitkamp, Democrat of North Dakota, who is a leading sponsor of the legislation and a former director in a coal gasification company, said she had seen a shift in the stance of coal executives. “I see people at the table who weren’t at the table before,” she said. “As long as they see that the issue of CO2 is not going to go away, they are going to roll up their sleeves and try to find a way that works for the utility industry and the coal industry.”

One obstacle to the bill could be cost. Supporters have asked the Joint Committee on Taxation to evaluate the effect of the legislation on the federal budget but have not heard back yet.

Opponents say it would merely extend the life of the coal industry.

“For 40 years, I’ve been told clean coal is right around the corner, just give us another few subsidies,” said Dan Becker, director of the Safe Climate Campaign, an environmental group. “Carbon capture and sequestration may work someday in the distant future, but right now it barely works on a technical level. It’s way far away from working on a cost-effectiveness level.”

There are only a handful of commercial-scale operations for carbon capture and sequestration globally. But coal executives say proper permitting and legal protections, along with the tax credits, could bring a surge in construction in the United States within a decade. And as the technology improves and implementation becomes less expensive, the United States could export the technology and make coal-fired power cleaner around the world.

But developing commercial-scale carbon capture has been bedeviled by cost overruns and long delays. The operations not only are expensive to build but also require a lot of power, making plants less efficient. The federal government canceled one such project, called FutureGen, after it was granted more than $1 billion by the Obama administration.

Still, coal executives are staking much of their futures on the technology.

“We’re confident,” Mr. Svec of Peabody said, “that it needs to be a part of any serious effort toward reducing greenhouse gases from industrial sources.”

Correction: February 28, 2017

An article on Monday about coal companies’ efforts to frame a new image for coal as a contributor to a clean-energy future misstated the amount of a proposed increase in a federal tax credit for capture and sequestration of carbon dioxide, as well as the current amount. Legislation would raise the credit to $50 per ton (not $20), from the current $20 (not $10). The article also misstated a former role of Senator Heidi Heitkamp at a coal-gasification company. She was a director, not an executive.

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