COAL STATE SENATORS CRITICIZE CLEAN ENERGY STANDARD PROPOSAL

Tamar Hallerman
GHG Monitor
05/18/12

Senators representing coal-rich states sharply criticized Sen. Jeff Bingaman’s (D-N.M) Clean Energy Standard (CES) this week, saying that the proposal in its current form could hurt the U.S. economically by cutting electricity generation from coal at a time when countries like China ramp up new development in the sector. Coal advocates like Sen. Joe Manchin (D-W.Va.) spoke out against the plan, calling it a “formula for disaster.” “With this policy here you’re rooting out the one abundant energy source that we have in this country,” he said, adding, “My concern is that with this we can’t compete with our economic challengers like China.”

The Senate Energy and Natural Resources Committee met May 17 to consider Bingaman’s proposal, “The Clean Energy Standard Act of 2012” (BCES12), nearly two months after the committee chairman introduced the legislation. If passed, the measure would require utilities to generate 24 percent of their electricity from ‘clean’ energy sources in 2015, ramping up the amount by 3 percent per year through 2035, when 84 percent of generation would be required to come from clean sources. The legislation would award whole and partial clean energy credits based on emissions intensity per unit of electricity. Sources such as renewables and nuclear would receive full credits under the plan since they have zero emissions, while fossil fuel generation from natural gas and coal with carbon capture and storage would garner partial credits proportional to emissions rates.

EIA Projects Smaller Role for Coal

Much of the criticism from the plan’s opponents this week centered on the results from an Energy Information Administration (EIA) analysis of the plan released earlier this month, which projected that coal-fired power generation would “decrease significantly” under the plan, falling 25 percent below reference case baseline figures in 2025 and 54 percent in 2035. The analysis also concluded that despite the fact that CCS projects would be awarded nearly full credits under the legislation, the source would have a practically nonexistent role in power generation in the years to come. The analysis expects natural gas and nuclear—and to a smaller extent renewables—to fill the void in generation capacity left by retiring coal units. In his remarks before the committee, acting EIA Administrator Howard Gruenspecht said that in addition to the design of BCES12, the significant decrease in coal use over time as projected in the EIA analysis is also due to current low natural gas prices and relatively higher coal prices.

Coal state senators said during the hearing that it would be a mistake to phase out coal at a time when the economy is still recovering from a recession. “It looks to me like a more transparent way of talking about coal when we start looking at clean energy standards would be to say that by a certain date coal is just not going to be a part of our energy mix in this country,” said Sen. Bob Corker (R-Tenn.). “When we look at policies like this, we end up really moving away from the great strengths this nation has as it relates to its resources.” Manchin advocated for an “all-in” energy policy that includes a robust role for coal. “Until we develop the fuels of the future, we’ve got to use what we have, and what I’m saying is we’ll be the first nation in history not to use its resources for its own advantage,” he said.

In his remarks before the committee, acting Under Secretary of Energy David Sandalow said that a CES such as the one proposed by Bingaman is not meant to discriminate against sources like coal. “The Clean Energy Standard is technology neutral,” he said. “It is designed precisely to bring in diverse energy sources.” In particular, Sandalow noted the Obama Administration’s investments in commercializing ‘clean coal’ technologies like carbon capture and sequestration.

Quinn Speaks Out Against CES

Criticism of the plan was not limited to the Senate this week. Coal industry leaders also spoke out against BCES12. National Mining Association President and CEO Hal Quinn emphasized that the CES as proposed would “make the U.S. more vulnerable to foreign competition” and “less able to control [its] own economic destiny” in an op-ed in The Washington Times. “By putting the government in the driver’s seat and kicking coal out of the car, a CES likely will slow the development of more efficient and affordable electric power for American households and industry,” Quinn said. “That’s because advanced coal technologies are capable not only of achieving dramatic efficiency increases but also of generating synthetic fuels that can boost our energy independence. Instead of foreclosing this possibility, we should be investing in it to make it a reality.”

Meanwhile, several environmental groups spoke out in favor of the plan. Judi Greenwald, vice president for Technology and Innovation at the Center for Climate and Energy Solutions (C2ES), called BCES12 “a promising approach” in testimony before the committee. “C2ES believes that Senator Bingaman’s proposal embodies a number of design features that are innovative and reasonably balance the multiple objectives of a Clean Energy Standard,” she said, listing the increasing stringency requirement and wide variety of ‘clean’ sources accepted under the plan as strengths of the bill. 

CES Faces Uphill Battle

While debate of the legislation remained lengthy this week, the ultimate fate of the bill remains unclear as members of Congress seek to wind down legislative business quickly ahead of the November elections. On a more basic level, the CES will likely face an uphill battle given that its champion, Sen. Bingaman, is retiring at the end of the year. It is not yet clear whether any of his counterparts on the committee will be willing to pick up the legislation next year. Also detrimental to the CES in its current form is that no Republicans have signed on to co-sponsor the legislation as members have in previous years with stricter renewable electricity standards. When he introduced the CES in March, Bingaman acknowledged the uphill battle the legislation faced, saying that the legislative appetite is likely not there in the Senate to pass the bill this term. “To be realistic, I think getting substantive legislation through both houses and onto the president’s desk is very difficult in this Congress,” he said.