(NEWSCOM)
A coal giant rethinks coal
By Eoin O'Carroll | 01.07.09
Battered by the financial crisis and under pressure from the Sierra Club and other environmental groups, the Houston-based energy giant Dynegy announced that it is abandoning plans to construct six coal-fired power plants.
The company announced that it would be dissolving the 50-50 joint venture with LS Power, a New York-based energy company. That venture, launched in 2007, sought to build coal-fired plants in Arkansas, Georgia, Iowa, Michigan, Nevada, and Texas.
But now it’s not going to happen. Here’s what Dynegy’s CEO said in a press release:
“The development landscape has changed significantly since we agreed to enter into the development joint venture with LS Power in the fall of 2006,” said Bruce A. Williamson, Chairman, President and Chief Executive Officer of Dynegy Inc. “Today, the development of new generation is increasingly marked by barriers to entry including external credit and regulatory factors that make development much more uncertain. In light of these market circumstances, Dynegy has elected to focus development activities and investments around our own portfolio where we control the option to develop and can manage the costs being incurred more closely.”
Writing in the online sustainability magazine, Worldchanging, Adam Stein unpacks Mr. Williamson’s statement. Mr. Stein, who co-founded TerraPass, a for-profit purveyor of carbon offsets, explains that “regulatory factors” refer to the likelihood of a federal carbon cap-and-trade bill in the coming years, which would raise the price of coal, the most carbon-intensive fossil fuel.
“External credit factors,” means the current credit crisis. Stein notes that banks are particularly reluctant to lend money to ventures with a “massive carbon exposure” like Dynegy’s, again because of the prospects for a federal cap-and-trade scheme. He writes:
Needless to say, many factors may have played into the decision to shut down those coal plants: grassroots pressure, lawsuits (real or threatened), disastrous publicity from the [Tennessee] sludge spill, the imminent changing of the guard at the EPA, state-level permitting difficulties, etc. But as long as we’re handing out credit, let’s not forget the most obvious and compelling factor. In a carbon-constrained economy, no one wants to double down on coal.
Needless to say, environmentalists are delighted. The Sierra Club, which in February 2008 launched its “Clean Up Dynegy” campaign to pressure the corporation into ditching the proposed power plants is calling Dynegy’s decision “a victory for public health.” Bruce Nilles , the conservation group’s national coal campaign director, estimated that the six plants would have spewed 30 million tons of greenhouse gasses into the atmosphere each year (by comparison, the average American is responsible for about 20 tons annually):
<< NASA climate scientist pens personal appeal to Obama | Main“This is a major victory in Sierra Club’s efforts to stop the construction of dirty coal-fired power plants. Dynegy had been the largest developer of new coal-fired power plants in the country, and it seems like the company has recognized our efforts to move to a clean energy future. We applaud them for taking this major step forward.
“LS Power has not developed or operated coal plants, and as they stand alone now we encourage them to shift their investments into cleaner alternatives like wind, solar, and efficiency that can create new jobs and economic opportunity while cutting pollution, improving public health, and helping solve global warming.”
Comments
2. Don J | 01.07.09
Why not comment that users of electricity will pay more for power. In addition will there be hand wringing in middle east as we have to import more oil. The mantra of wind power and solar panels is a joke!! Everyone sooner or later everyone will have pay more taxes or higher power costs. The option of Nuclear power to coal is also off limits. The statement that nuclear is acceptable has been followed up with NIMBY and lawsuits to drive costs to unacceptable levels.
3. Charles | 01.07.09
Don,
You may be right, people will pay more for energy, upfront, but in the long run, will not because we will be using renewable resources that do not have to be harvested using expensive, planet-ruining techniques.
Wind power and solar panels are not a joke, nor are they mantras.They are viable technologies in use around the world in a wide variety of applications. They are also the first of many renewable energy technologies that will wean us off oil and coal (and nukes, hopefully).
Finally, why do you think that sticking with coal will keep energy prices low? Ok, the stuff doesn’t have to be imported to the US (though it does to much of the rest of the world and they will not want to become further beholden to us so will develop other technologies, leaving us in the dust, innovation wise) but it is dirty any way you slice it. Cleaning it up takes a lot of money and being able to emit all that CO2 is going to cost even more. Not to mention sequestering it, which is the real joke, which if it ever happens, will only become a viable technology after billions spent on research and development over 25 years, at least.
Coal is the past. Move on.
4. Shirley Freeman | 01.07.09
How can you so glibly dismiss the impact of rising energy prices on the poor around the world? I am a strong advocate for greener, alternative fuels. But, we can go about this wisely, with less suffering, or foolishly, and probably watch people even in this U.S. dying of hunger due to higher food prices–certainly deaths due to hunger and food riots would occur in other parts of the world. People would probably also die from lack of heat in winter, especially the very young and very old. No one desires these deaths and suffering, and the suffering is avoidable if we approach the transition with care instead of impulsively pushing ahead without consideration of the consequences.
We can use domestic transition fuels as T. Boone Pickens (www.pickensplan.com) has proposed. Use of transition fuels while making ready for alternative fuels’ readiness for major energy production is much wiser, and better for future generations. We will also have better private financing available in-country if we make use of domestic transition fuels as Pickens advocates. We will be doing future generations an enormous favor, and fulfilling a major responsibility to them, by using private financing whenever possible instead of government financing. And, keep in mind, with government financing and continued excessive printing of U.S. dollars, runaway inflation will be the unavoidable result–with much suffering from higher prices, also.
5. Ron Scheurer | 01.08.09
Since all industrial processes degrade the natural environment, I would like to hear the Sierra Club and other environmental groups plan on halting environmental degradation caused by an increasing human population demanding bigger pieces of the finite pie.
Keep in mind that developing new techniques and power sources requires industrial processing. Electricity requires production and transmission facilities whether it is solar, wind, water, or nuclear.
The only real way people will get a bigger piece of the pie is by having fewer people cutting into the pie.
6. Peter McEvoy | 01.08.09
Shirley- thanks for that link to the Pickens Plan. I hadn’t heard of it, but I’ll definitely be keeping my eyes open for news about it.
To all the above commenters denying the viability of renewable energy, what do you say about Iceland or New Zealand, each country getting over 70% of their energy from renewables? Other factors aside, if Coal and Oil were charged at their actual cost (that is, if you include the outsourcing of pollution and emissions to the environment) they would be much less viable economically. Thankfully, that is what we are finally doing- charging fossil fuel burners for their destructive, environmentally costly emissions.
It’s possible to switch, and it’s the smart thing to do- economically and environmentally.
7. JP | 01.09.09
Coal and oil are not cheap when other costs are factored in such as dealing with pollution and human health problems. Also consider federal subsidies and tax breaks (propping up the fossil fuel industry) that come out of taxpayer pockets. And let’s not forget that coal companies prefer to use the method of “mountaintop removal” for coal extraction, which lays utter waste to vast areas of the Appalachians. If we focus on reducing our gluttonous and inefficient energy use along with developing renewable energy resources, fossil fuels as the foundation of an energy paradigm will be a thing of the past.
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1. Virginia | 01.07.09
The proponents of this cotinuous slide into self-destruction should become enlightened by reading such books as “The Long Emergency”,”Twilight in the Desert”,”End of Oil”, “Peak Everything” & other verifiable, credible titles available that document the end of hydrocarbons. We presently acquire less than 1% of our energy through alternatives; Chas.Maxwell, world renouned energy gru, (plus others), state that with maximum effort & investment, barely existing now, we could achieve 3% of our energy needs from alternatives. Dump the disinformation, deceit & distraction by visiting http://www.theenergybulletin.com, absent politics, business-industry, gov. or any other self interests.
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