But I thought this was why Wyoming invested in coal-gasification?

— September 24, 2013

In a long anticipated move, the U.S. Environmental Protection Agency on Friday announced carbon dioxide emission limits under the Clean Air Act for new large industrial sources: 1,100 pounds per megawatt hour for coal-based power generation plants, 1,000 pounds per megawatt hour for new large natural gas-burning turbines, and 1,100 for new small natural gas turbines.

The CO2 limits announced Friday apply only to new facilities. Next, EPA will rollout its proposed CO2 limits for existing coal-fired power plants. The standards are designed to help “combat climate change and improve public health,” said EPA.

Two years ago, you might have thought that Wyoming’s top elected officials would cheer this news and thank EPA for finally creating the federal policy incentives needed to drive carbon capture technologies, which are perhaps the only way to preserve the use of coal far into America’s energy future.

“Capital from the private sector only flows to large and ambitious projects when there is reasonable regulatory, legal and financial certainty,” Wyoming Gov. Matt Mead said in 2011. “This is a real world example of the local impact of the federal government’s failure to provide a policy path forward for energy use in America. An energy policy must include the responsible use of our coal resources. Without a clear policy, investors and developers do not have certainty and cannot plan for risk, which is critical in making decisions to build modern, efficient plants.”

That was Gov. Mead’s statement in July 2011 when General Electric announced it was delaying its 50-50 joint venture with the University of Wyoming on the $100 million High Plains Coal Gasification research facility. Gov. Mead and GE put out a joint press release then, stating that the effort was put on hold because “The original project investment plan anticipated more progress toward certainty in the future of federal energy policy.”

It’s now two years later, and President Barack Obama — directly responding to Congress’ failure to provide a policy path forward on climate and energy — is putting into action his Climate Action Plan, beginning by finally implementing CO2 limits on coal emissions, which is a legal mandate thanks to the George W. Bush-era U.S. Supreme Court decision recognizing CO2 as a pollutant under the regulatory authority of EPA.

But instead of thanking the President and EPA, the governor and coal industry leaders are saying something quite different.

“Like the last iteration, this latest EPA proposal would be damaging to Wyoming, the nation’s top coal supplier,” Gov. Mead stated in a press release on Friday. “The standards for coal-fired power generation in the proposed rule are unachievable and will arrest research, development and commercialization of clean technologies. This poses grave implications for the continuing viability of coal as an energy source and for the economic stability of Wyoming and the nation.”

I asked Gov. Mead’s press secretary, Renny MacKay, what the governor had in mind when he made the statement in 2011 about the need for clear policy regarding coal emissions that gives investors and developers the certainty upon which to plan for risk and build modern, efficient plants.

“The Governor believes the country needs regulatory certainty and an inherent component of regulatory certainty is reasonableness,” MacKay told WyoFile. “The approach Governor Mead favors is to establish a federal energy policy – ideally in partnership with Congress. Federal agency rules were not intended to and should not fill the void of no policy, especially when these proposals are not grounded in economic realities.”

Some say that EPA could have come out a 100 percent CO2 capture rule, instead of what it announced on Friday which represents about a 40 percent reduction in CO2 from a typical coal-fired unit. EPA said that a 100 percent capture mandate would have been too economically restrictive, whereas a 40 percent reduction may be within economic viability someday.

Meanwhile the new standards change virtually nothing for the current trend among utilities away from coal and toward natural gas. What’s changed is companies like General Electric now have solid regulatory limits at which to aim their new coal technologies. (After this column was published, University of Wyoming officials informed WyoFile that there are no discussions with GE to resume the High Plains Coal Gasification project.)

While there are many questions still to answer about coal-gasification, super-critical designs and carbon capture, moving forward with CO2 limits on coal is a much better plan than what Wyoming politicians have put forth, which has been to convince the rest of the nation and the world to forget about coal’s contribution to accelerated climate change — a pending human health catastrophe that no amount of royalties, tax revenue or Wyoming-based jobs could ever justify.

On questions of climate and energy policy, Wyoming’s elected leaders and the coal industry have said no to a carbon tax, no to cap-and-trade, and no to regulatory controls. The nation and the world should allow “the market” to decide the future of coal emissions and technologies. As MIT senior research engineer Howard Herzog said at a coal conference in Gillette last year, “I think we need carbon policy, but I think we should let the market decide how it falls out.”

That’s pretty much what we’ve seen over the years. The proliferation of domestic natural gas has done more to damage coal’s standing in the market of fuels than any EPA regulation to date. And never forget that Wyoming’s Powder River Basin coal industry might have withered long ago had it not been for a Clean Air Act amendment in the 1990s to reduce sulfur dioxide emissions, which skyrocketed demand for Wyoming’s lower-sulfur coals. It’s funny there’s not an annual parade in Gillette celebrating the milestone regulation.

If there is a war on coal, it’s coming from our society’s resolve to no longer choke on the toxins of unrestricted coal-burning. But it’s not waged by the EPA.

“With or without this EPA rule, nobody was going to build a new coal plant,” University of Wyoming associate professor of economics Robert Godby, who is researching the effects of various policy measures on coal, said in a recent interview. Godby said EPA’s job is to protect human health. It just so happens that coal is the dirtiest fuel we use. Mercury is really bad for you. Particulates are really bad for you. CO2 in large quantities accelerates global warming, and that’s really bad for you.

“So it’s not that coal is being targeted, it’s just that coal has a problem in all of these things that (impact human health),” said Godby.

— Dustin Bleizeffer is WyoFile editor-in-chief. You can reach him at (307) 267-3327 or email dustin@wyofile.com. Follow Dustin on Twitter at @DBleizeffer

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