You know that American energy is going through a topsy-turvy time when the Washington Post decides to quote the Sierra Club on economics — while looking to Rocky Mountain Power for expertise about environmentalism. This was in a recent new report about carbon capture in Wyoming, and the Post didn’t do much to hide its disdain for Wyoming’s Republican officials, the Trump administration and the coal industry — a combination holding back the coal-free future that (as a recent anti-Wyoming swipe in the New York Times added) in the Post’s thinking, all right-thinking people should want.
For a more local example of the world turned upside down, you might take a look at Kerry Drake’s recent column in WyoFile: an attack on carbon capture in Wyoming and the perfidious politicians who are interested in the new technology. Strange times we live in, when a veteran Wyoming journalist — trained to be skeptical about the self-serving claims of big out-of-state businesses that threaten the welfare of ordinary Wyomingites — finds himself uncritically embracing the assertions of Rocky Mountain Power, a division of an enormous interstate power company, PacifiCorp, which is itself a wholly owned subsidiary of Berkshire Hathaway. These are not people who have the welfare of Wyoming as their primary concern.
These power companies aren’t just wrong about carbon capture because they are owned by out-of-state interests, of course. They are, however, wrong: Carbon capture offers unique opportunities for Wyoming.
But a proposition isn’t proved false just because it was said by someone with ulterior motives — a fact about logic one wishes would be remembered by those who sneer that the Department of Energy’s recent report on carbon capture comes from the Trump administration, as though that alone makes it untrue. We get no closer to reality by saying “If Trump is for something, I must be against it” than we get by saying “If the New York Times hates something, I should love it.”
So, let’s take a step back and look at that Department of Energy study of carbon-capture technology retrofitted to Wyoming’s coal-burning power plants. The study concluded that carbon capture would reduce emissions by 37% more than PacifiCorp’s 2019 plan to close Wyoming’s coal plants and replace them with wind and solar. The cost of this plan? Carbon capture comes in at $24 per ton less than PacifiCorp’s plan, according to the study. The electrical costs charged to Wyoming’s ordinary ratepayers would be lower, while the state and local communities would see tax revenues and royalty payments much higher than PacifiCorp promises.
There’s another serious gain from carbon capture, for those who care about Wyoming. The employment benefits would be at least five times higher, according to the study, with carbon capture keeping intact what PacifiCorp would destroy: the Wyoming communities — their virtues, cultures and livelihoods — that have powered America for decades.
A common complaint is that the study is pointless: The “natural laws of free-market economics” (to quote Drake) have already decided against coal. It’s a little peculiar to hear this line from those who, in other contexts, would likely denounce free-market capitalism, but — being logical again — the self-contradictions of those who make a claim are not what make a claim false. What makes the “market has rejected coal” notion false is that the market had nothing to do with it.
Remember Solyndra, the solar-panel manufacturer that went bankrupt in 2011 despite receiving $535 million in loan guarantees from the federal government? Just a few weeks ago, Crescent Dunes Solar, a defunct Nevada solar-power installation, gave up on ever returning $537 million of its own loan guarantees.
The market did not choose solar and wind. They were chosen by huge government interventions that wildly distort the market with tax credits, cheap loans and dispatch priority on the grid — making energy production a playground for the rich to profit at the expense of ordinary ratepayers.
“I will do anything that is basically covered by the law to reduce Berkshire’s tax rate,” Warren Buffet told a Nebraska audience in 2014. “For example, on wind energy, we get a tax credit if we build a lot of wind farms. That’s the only reason to build them. They don’t make sense without the tax credit.”
That doesn’t mean that wind farms cost what they did in 2014. And it doesn’t mean that subsidizing renewable energy is wrong. The person who isn’t frightened by the risks of human-caused climate change just isn’t paying attention. We don’t need merely lowered emissions; we need a genuinely negative carbon rate, reducing the amount of greenhouse gasses in the atmosphere to pre-industrial levels.
But why can’t carbon capture help do that? Too much of the discussion is driven by an emotional sense that coal is bad in itself. Even if we had a use for coal that produces zero emissions, that line of thinking goes, we should still reject it because … well, just because coal is evil. This is irrational, rejecting economics as thoroughly as climate-change deniers reject science. Carbon capture works by sending the captured carbon underground, returning it to the earth. What’s not to like about that — particularly in Wyoming, with its saline aquifers, large coal reserves and stranded oil that can be extracted with carbon dioxide?
If you believe in both science and economics, the only question that should matter is whether carbon capture will work in Wyoming. The Department of Energy says it will. PacifiCorp says it won’t.
With such wildly divergent conclusions, one must ask about each party’s methodology. Unfortunately, PacifiCorp does not provide its methodology. It just gives us assertions that the Department of Energy’s study is flawed. The technicalities of the assertions can be answered, but more interesting is the question of why PacifiCorp didn’t say that the study was incomplete when it had the chance. The utility presumably participated in the study, after all, with ample time and opportunity to point out inaccuracies in the inputs and analysis of the path the study was taking.
Why might PacifiCorp make such claims now? Well, perhaps that’s because the giant utility is caught in a bind: It provides electricity to Oregon and other states that want to ban power generated by coal. Meanwhile, PacifiCorp maximizes its profit by maximizing its expenditures, giving it a vested reason to want to close old plants and construct new power sources. And if it can wrap itself in the mantle of environmentalism while doing so, protecting itself from scrutiny, so much the better for PacifiCorp.
This is not good for the environment, not good for consumers and especially not good for Wyoming. The state’s Public Service Commission challenged PacifiCorp’s 2019 plan because it did not trust that Wyoming’s concerns were being treated fairly by a large utility whose primary market interests are on the West Coast. Gov. Mark Gordon asked the federal Department of Energy to sponsor a study of carbon capture because he did not believe PacifiCorp’s bland and undocumented assertion that it had honestly considered carbon capture for Wyoming. The Department of Energy study validated his suspicion.
We need to turn our view of American energy right-side up. We need to abandon emotional responses to rational questions. We need to think clearly — in accord with the best environmental science and the best economic projections — about where we go from here. What those of us in Wyoming are finally coming to understand is that our destination shouldn’t be where PacifiCorp wants to take us.