Over the last few years the coal industry has suffered one setback after another. The Sierra Club, which has kept a tally of proposed coal-fired power plants and their fates since 2000, reports that 123 plants have been defeated, with another 51 facing opposition in the courts. Of the 231 plants being tracked, only 25 currently have a chance at gaining the permits necessary to begin construction and eventually come online. Building a coal plant may soon be impossible.
What began as a few local ripples of resistance to coal-fired power quickly evolved into a national tidal wave of grassroots opposition from environmental, health, farm, and community organizations. Despite a heavily funded ad campaign to promote so-called clean coal (one reminiscent of the tobacco industry’s earlier efforts to convince people that cigarettes were not unhealthy), the American public is turning against coal.
One of the first major industry setbacks came in early 2007 when a coalition headed by the Environmental Defense Fund took on Texas-based utility TXU’s plans for 11 new coal-fired power plants. A quick drop in the utility’s stock price caused by the media storm prompted a $45-billion buyout offer from two private equity firms. However, only after negotiating a ceasefire with EDF and the Natural Resources Defense Council and reducing the number of proposed plants from 11 to 3, thus preserving the value of the company, did the firms proceed with the purchase. It was a major win for the environmental community, which mustered the public support necessary to stop 8 plants outright and impose stricter regulations on the remaining 3. Meanwhile, the energy focus in Texas has shifted to its vast wind resources, pushing it ahead of California in wind-generated electricity.
In May 2007, Florida’s Public Service Commission refused to license a huge $5.7 billion, 1,960-megawatt coal plant because the utility could not prove that building the plant would be cheaper than investing in conservation, efficiency, and renewable energy sources. This point, made by Earthjustice, a non-profit environmental legal group, combined with strong public opposition to any more coal-fired power plants in Florida, led to the quiet withdrawal of four other coal plant proposals in the state.
Coal’s future is also suffering as Wall Street turns its back on the industry. In July 2007, Citigroup downgraded coal company stocks across the board and recommended that its clients switch to other energy stocks. In January 2008, Merrill Lynch also downgraded coal stocks. In early February 2008, investment banks Morgan Stanley, Citi, and J.P. Morgan Chase announced that any future lending for coal-fired power would be contingent on the utilities demonstrating that the plants would be economically viable with the higher costs associated with future federal restrictions on carbon emissions. Later that month, Bank of America announced it would follow suit.
In August 2007, coal took a heavy political hit when U.S. Senate Majority Leader Harry Reid of Nevada, who had been opposing three coal-fired power plants in his own state, announced that he was now against building coal-fired power plants anywhere in the world. Former Vice President Al Gore has also voiced strong opposition to building any coal-fired power plants. So too have many state governors, including those in California, Florida, Michigan, Washington, and Wisconsin.
In her 2009 State of the State address, Governor Jennifer Granholm of Michigan argued that the state should not be importing coal from Montana and Wyoming but instead should be investing in technologies to improve energy efficiency and to tap the renewable resources within Michigan, including wind and solar. This, she said, would create thousands of jobs in the state, helping offset those lost in the automobile industry.
One of the unresolved burdens haunting the coal sector, in addition to the emissions of CO2, is what to do with the coal ash—the remnant of burning coal—that is accumulating in 194 landfills and 161 holding ponds in 47 states. This ash is not an easy material to dispose of since it is laced with arsenic, lead, mercury, and many other toxic materials. The industry’s dirty secret came into full public view just before Christmas 2008 when the containment wall of a coal ash pond in eastern Tennessee collapsed, releasing a billion gallons of toxic brew. Unfortunately, the industry does not have a plan for safely disposing of the 130 million tons of ash produced each year, enough to fill 1 million railroad cars. The dangers are such that the Department of Homeland Security tried to put 44 of the most vulnerable storage facilities on a classified list lest they fall into the hands of terrorists. The spill of toxic coal ash in Tennessee drove another nail into the lid of the coal industry coffin.
In April 2009, the chairman of the powerful U.S. Federal Energy Regulatory Commission, Jon Wellinghoff, observed that the United States may no longer need any additional coal or nuclear power plants. Regulators, investment banks, and political leaders are now beginning to see what has been obvious for some time to climate scientists such as NASA’s James Hansen, who says that it makes no sense to build coal-fired power plants when we will have to bulldoze them in a few years.
In April 2007, the U.S. Supreme Court ruled that the Environmental Protection Agency (EPA) is both authorized and obligated to regulate CO2 emissions under the Clean Air Act. This watershed decision prompted the Environmental Appeals Board of the EPA in November 2008 to conclude that a regional EPA office must address CO2 emissions before issuing air pollution permits for a new coal-fired power plant. This not only put the brakes on the plant in question but also set a precedent, stalling permits for all other proposed U.S. coal plants. Acting on the same Supreme Court decision, in December 2009 the EPA issued a final endangerment finding confirming that CO2 emissions threaten human health and welfare and must be regulated, jeopardizing new coal plants everywhere.
The bottom line is that the United States now has, in effect, a de facto moratorium on the building of new coal-fired power plants. This has led the Sierra Club, the national leader on this issue, to expand its campaign to reduce carbon emissions to include the closing of existing plants.
Given the huge potential for reducing electricity use in the United States by switching to more efficient lighting and appliances, for example, this may be much easier than it appears. If the efficiency level of the other 49 states were raised to that of New York, the most energy-efficient state, the energy saved would be sufficient to close 80 percent of the country’s coal-fired power plants. The few remaining plants could be shut down by turning to renewable energy—wind farms, solar thermal power plants, solar cell rooftop arrays, and geothermal power and heat.
The handwriting is on the wall. With the likelihood that few, if any, new coal-fired power plants will be approved in the United States, this de facto moratorium will send a message to the world. Denmark and New Zealand have already banned new coal-fired power plants. Other countries are likely to join this effort to cut carbon emissions. Even China, which was building one new coal plant a week, is surging ahead with harnessing renewable energy development and will soon overtake the United States in wind electric generation. These and other developments suggest that the Plan B goal of cutting net carbon emissions 80 percent by 2020 may be much more attainable than many would have thought.