The coal industry and its allies in the press have long engaged in a creative bait and switch. First, they tout the cheap and efficient nature of coal as an energy source. Those facts are cited to justify building new coal gasification and carbon capture facilities, which are euphemistically referred to as "clean coal."
If we're talking about an existing dirty coal plant that was built several decades ago, then yes, it produces relatively cheap power (if you don't count government subsidies and externalized costs of pollution). But do new clean coal facilities live up to the promise of providing a cheap power source?
A battle over the Tenaska company's coal gasification and carbon capture project proposed in Taylorville, Illinois provides a definitive answer: absolutely not. In fact, clean coal would produce some of the most expensive energy in the world. That's why it was opposed by much of the state's business community, including the Illinois Chamber of Commerce and most utility companies.
Several episodes of this debate are instructive for the rest of the nation as we determine our new energy future. An important piece of evidence is a study by the Illinois Commerce Commission, which found, using Tenaska's own estimates, that power produced from the plant would cost more than wind, nuclear, or natural gas. That was true even considering the millions in state taxpayer subsidies and billions in Federal Department of Energy loan guarantees pledged to the project. Even a highly subsidized carbon capture project can't produce power at competitive rates.
To compensate for high costs, Tenaska sought to force Illinois electric buyers into 30-year contracts at above-market rates. The rate increase was capped at 2% for residential customers, but no cap was provided for commercial users. Unexpected cost overruns could have been passed on to ratepayers in order to guarantee a profit for Tenaska.
There are environmental concerns as well, raised primarily by the Sierra Club. It's unclear how much carbon from the new plant would have been sequestered underground. Tenaska pledged differing numbers up to 65%. Their emissions for several pollutants would have been greater than many existing coal and natural gas plants. Some CO2 would have been piped to enhanced oil recovery operations in the Gulf Coast region rather than being sequestered on site.
I wish environmental problems had been the most important factor in the Illinois Senate defeating a bill to support the plant. Unfortunately, many pro-environment Senators voted for it because unions were lobbying heavily in favor. I understand why trade unions support any project that creates jobs for their members. That's what unions do. But just because you can create jobs building something doesn't mean it's good energy policy.
The bill failed largely due to opposition from the business community, who wanted to avoid rate hikes for an untested technology that the United State has never tried on this scale. Even some Senators from central Illinois coal country spoke against the bill. Senator Kyle McCarter's district borders Christian County, where the plant is proposed. In his Senate speech, he mentioned opposition by ADM, the largest employer in his district.
Despite coal industry propaganda, the business community knows that coal gasification and carbon capture isn't a cheap or realistic energy source. They might tolerate taxpayer subsidies for clean coal pork projects, but they strongly oppose any proposal that will force businesses to pay the cost of these experiments. That's a big hint for everyone. If the business community isn't willing to assume the risk of these projects, then why should the rest of us bear the burden as taxpayers?
As long as cheaper and cleaner alternatives are available, clean coal is a pork project which benefits no one but the coal mining industry. Someday, the politicians who support it will admit they were wrong in pandering to clean coal pipe dreams, just as Al Gore admitted he was wrong to support corn ethanol for political reasons. New coal will only thrive so long as sympathetic politicians are willing to prop up a dying industry at taxpayer expense.
This post was written for the Democrats for Progress blog.
