June 2nd, 2014
Leave it to Charlie Komanoff to tell it like it is:
I’m expecting climate change deniers to come out of the woodwork, and I’m SO tired of hearing about Obama’s “War on Coal” which, unfortunately, doesn’t exist. Watching this Administration’s push for IGCC coal plants, promotion of transmission for coal, and Obama’s donations from coal interests, give me a break — name just ONE coal plant he’s shut down…
… I’m waiting… right… never happened.
Meanwhile, the recession did a lot for closing coal plants and less burning because demand dropped so significantly.
Finally we have the EPA rules on CO2 reduction released for comment… well, it’s proposed. And now it’s open for Comment:
There are 120 days to file comments, presume it’s the very end of September. How to file? From the fed website, the pre-publication version dated today (so the deadline isn’t clear, when was/is it to be published? It’s at least 120 days from today, perhaps a little longer.):
Submit your comments, identified by DocketID No. EPA-HQ-OAR-2013-0602, by one of the following methods:Federal eRulemaking portal: http://www.regulations.govEmail: A-and-R-Docket@epa.gov. Include docket ID No. EPA-HQ-OAR-2013-0602 in the subject line of the message.Facsimile: (202) 566-9744. Include docket ID No. EPA-HQ-OAR-2013-0602 on the cover page.Mail: Environmental Protection Agency, EPA Docket Center (EPA/DC), Mail code 28221T, Attn: Docket ID No. EPA-HQ-OAR-2013-0602, 1200 Pennsylvania Ave., NW, Washington, DC 20460. In addition, please mail a copy of your comments on the information collection provisions to the Office of Information and Regulatory Affairs, OMB, Attn: Desk Officer for the EPA, 725 17th St. NW, Washington, DC 20503.
There are public hearings, but only in Atlanta, Denver, Pittsburgh, and D.C., not exactly convenient for most of us in the U.S. Contact Ms. Pamela Garrett at 919-541-7966 or at firstname.lastname@example.org to register to speak at one of the hearings. The last day to pre-register in advance to speak at the hearings will be Friday, July 25, 2014. See notice, starting on p. 2:
Public Hearing. Four public hearings will be convened. On July 29, 2014, one public hearing will be held in Atlanta, Georgia, at the Sam Nunn Atlanta Federal Center Main Tower Bridge Conference Area, Conference Room B, 61 Forsyth Street, SW, Atlanta, GA 30303, and one will be held in Denver, Colorado, at EPA’s Region 8 Building, 1595 Wynkoop Street, Denver, Colorado 80202. On July 31, 2014, a public hearing will be held in Pittsburgh, Pennsylvania at the William S. Moorhead Federal Building, Room 1310, 1000 Liberty Avenue Pittsburgh, Pennsylvania 15222. During the week of July 28, 2014, a public hearing will be convened in Washington, DC. The date and location will be announced in a separate Federal Register notice.
Classic backwards thinking — efficiency, conservation, demand side reductions, by whatever name, it’s #4 of 4 on their list:
4. Reducing emissions from affected EGUs in the amount that results from the use of demand-side energy efficiency that reduces the amount of generation required.
One encouraging thing is that they don’t intend to rely on carbon capture and storage, which is good because it’s just not possible, plausible for existing plant retrofits (although they keep up the hope/hype for new plants), but it regurgitates the hype that carbon capture and storage is a viable option for new plants and something they considered, but rejected, for existing plants. How absurd to even consider it, but I guess I’ll have to trot out studies and even environmental review showing the extreme safety risks, costs, and improbability/implausability of finding somewhere to put it (not that it will stay there, mind you), and the “paid to play” push of toadies like Clean Air Task Force (The Carbon Capture and Storage Imperative)(or regulatory toadies: “Clean Coal and Carbon Sequestration.”) (Deal illustrates different philosophies among environmental groups on energy future)(or this Technology touted as solution for coal power). The EPA has this to say:
For the reasons just described, based on the information available at this time, the EPA does not propose to find that CCS is a component of the best system of emission reduction for CO2 emissions from existing fossil fuel-fired EGUs. The EPA does solicit comment on all aspects of applying CCS to existing fossil fuel-fired EGUs (in either full or partial configurations), but does not expect to finalize CCS as a component of the BSER in this rulemaking. It should be noted, however, that in light of the fact that several existing fossil-fired EGUs are currently being retrofitted with CCS, the implementation of partial CCS may be a viable GHG mitigation option at some facilities, and as a result, emission reductions achieved through use of the technology could be used to help meet the emission performance level required under a state plan.
Fine, we can trot out the studies showing CO2 leakage and more:
And of course there will be a lot of backlash from climate change deniers — I’ve heard aside comments at the transmission hearings about Obama shutting down coal plants (Oh? When I ask for specifics, there’s no reply… there is no “war on coal.”). These factoids are from Leslie Glustrom’s Geology’s War on Coal released today:
Fact #1: The top 4 US coal companies are currently running in the red and reporting large losses:
- #1 US coal producer, Peabody, reported a loss from continuing operations in 2013 of $286 million (and as additional loss from discontinued operations of $226 million (see page 43, Peabody 2013 10-K) and a loss from continuing operations of $44.3 million for 2014 Quarter 1 (Q1).
- #2 US coal producer, Arch Coal Inc, reported a loss of $641 million for 2013 (see page 57, Arch 2013 10-K) and $124 million in losses for 2014 Q1.
- #3 US coal producer, Alpha Natural Resources, reported over $1 billion in losses for 2013 (see page 57 Alpha Natural 2013 10-K) and a net loss of over $55 million for 2014 Q1.
- #4 US coal producer, Cloud Peak reported a net income of $52 million for 2013 but a net loss of $15 million for 2014Q1. (See page 3, Cloud Peak 2014 Q1 10-Q).
Fact #2-Coal Company stock prices have plummeted in recent years. This can be followed on any financial website (e.g. Reuters Finance) using the three letter ticker abbreviation for the coal companies. Before the EPA had even announced its carbon regulations for existing coal plants:
- #1 Peabody (“BTU”)’s stock price had lost about 81% of its value falling from a peak of $88.69/share in June 2008 to $16.16/share on Friday May 30, 2014.
- #2 Arch Coal (“ACI”)’s stock price had lost 95% of its value falling from a peak of $77.40/share in June 2008 to $3.56 on Friday May 30, 2014.
- #3 Alpha Natural Resources (“ANR”)’s stock price had lost about 97% of its value falling from a peak of $108.73 in June 2008 to $3.88 on Friday May 30, 2014.
- #4 Cloud Peak (“CLD”)’s stock price has been the most stable but still has dropped about 21% from a 2010 peak of $23.56 to $18.47 on Friday May 30, 2014.
Fact #3—It is very likely that the US is past peak coal production, with the peak occurring in 2008 of 1.171 billion tons while 2013 coal production fell below 1 billion tons for the first time since 1993. It is unlikely that coal production in any US coal region will increase enough in the coming years to surpass the 2008 production.
Fact #4—The costs to produce coal by the coal companies are rising regularly as the coal becomes less accessible. Even in the big, strip mines of Wyoming, the amount of dirt (“overburden”) that needs to be moved is increasing and driving up production costs. Instead of making the capital investments needed to mine this coal, the coal companies are slashing their capital expenditure budgets making it unlikely that coal production will be increasing in the future.
When asked why coal production in Wyoming was not increasing as coal prices rose, Peabody CEO Greg Boyce described the situation as follows during Peabody’s third quarter conference call in 2013:
“…people are going to have to start spending real cash to repair equipment that’s been parked, replace engines, rear motors and the like. That will provide a bit of an increment, but then in reality, people have not spent capital to replace equipment that ultimately reached the end of its useful life or spent capital to overcome the annual increase in stripping ratio that naturally occurs in the Powder River Basin.
Fact #5—The largest US coal mines are beginning to play out. What used to the be largest US coal mine—the Black Thunder in Wyoming—produced about 10% of the country’s coal. Now the owner of the Black Thunder mine, Arch Coal, says that the mine is likely to start playing out by 2020. (See page 15, Arch 2013 10-K). The third largest US coal mine, the Cordero Rojo owned by Cloud Peak plans to take about a 25% production cut in 2015 due to rising costs of production and declining profit margins.
Paul Krugman has a few things to say about Crazy Climate Economics:
First, we’ll see any effort to limit pollution denounced as a tyrannical act. Pollution wasn’t always a deeply partisan issue: Economists in the George W. Bush administration wrote paeans to “market based” pollution controls, and in 2008 John McCain made proposals for cap-and-trade limits on greenhouse gases part of his presidential campaign. But when House Democrats actually passed a cap-and-trade bill in 2009, it was attacked as, you guessed it, Marxist. And these days Republicans come out in force to oppose even the most obviously needed regulations, like the plan to reduce the pollution that’s killing Chesapeake Bay.
Why is this crazy? Normally, conservatives extol the magic of markets and the adaptability of the private sector, which is supposedly able to transcend with ease any constraints posed by, say, limited supplies of natural resources. But as soon as anyone proposes adding a few limits to reflect environmental issues — such as a cap on carbon emissions — those all-capable corporations supposedly lose any ability to cope with change.
Now, the rules the E.P.A. is likely to impose won’t give the private sector as much flexibility as it would have had in dealing with an economywide carbon cap or emissions tax. But Republicans have only themselves to blame: Their scorched-earth opposition to any kind of climate policy has left executive action by the White House as the only route forward.
Furthermore, it turns out that focusing climate policy on coal-fired power plants isn’t bad as a first step. Such plants aren’t the only source of greenhouse gas emissions, but they’re a large part of the problem — and the best estimates we have of the path forward suggest that reducing power-plant emissions will be a large part of any solution.