The Northwest's Rush to Coal: Part 1

NW Energy Coalition

Background

While Northwest utilities have made some newsworthy investments in renewable energy lately, many utilities’ long-range or integrated-resource plans project them turning increasingly to a much more traditional means of power generation: coal.

Together, the region’s six major investor-owned utilities are considering purchasing more than 2,000 average megawatts of new coal generation for their customers in the next decade:

• Avista Utilities could have a 50-percent increase in its coal acquisitions by 2013.
• PacifiCorp is considering adding two new coal plants to its fleet by 2015.
• Idaho Power might acquire another 455 average megawatts of coal-generated electricity.
• Puget Sound Energy could acquire 375 average megawatts of new coal (some to replace existing coal contracts) by 2013.
• NorthWestern Energy and PGE plan relatively minor acquisitions of new coal.

Together, these plans add up to about 2,000 average megawatts, which would bring to nearly 10,000 average megawatts (including all of PacifiCorp’s service territory) the amount of coal-derived electricity in the resource mix of utilities serving Northwest consumers.

This issue of The Transformer introduces a series of articles considering different aspects of the region’s current rush to coal.

What’s New is Old

Coal is nothing new to the Northwest. One of every five electrons now entering the Northwest power grid for Washington, Oregon, Idaho or Montana is generated at a coal-burning power plant. About 62 percent of Montana’s electricity comes from coal, and nearly 40 percent Oregon’s. Spokane and Boise residents rely on coal for more than a third of their electric power.

But through the first four years of the new millennium, coal was taking a back seat to cleaner-burning and apparently cheaper natural gas. The bubble burst in 2003. Natural gas, the majority of which is imported into the Northwest from Canada, nearly doubled in price to upwards of $7.50 per million BTU. The downswing continues to be long and slow in coming.

The coal industry is seizing the moment with aggressive promotion of its product. And, in fact, coal offers many advantages to Northwest electricity providers:

• It’s relatively cheap (4 to 5 cents per kilowatt-hour), thanks in part to billions of dollars in annual federal subsidies.
• It’s a domestic resource, thus largely immune to the supply-curtailment and security threats that come with reliance on imported fuels.
• It’s abundant, with enough known supplies for 235 years at the current usage rate, according to the Union of Concerned Scientists.
• It’s politically expedient, given the powerful corporations and the tens of thousands of American workers involved in the extraction, transportation, processing and burning of coal to generate electricity.
• It has a new image. “Clean coal” technologies could dramatically reduce generating-plant pollution and offer the possibility of capturing carbon dioxide emissions for eventual long-term storage. Several respected environmental champions have added their voices to the Bush administration’s call for investing billions more federal dollars in clean-coal development.

We’ve Got Issues

The extraction and burning of coal, however, raise myriad human health and environmental issues, along with the crucial question of whether coal can help assure an abundant supply of affordable electricity for the people of the Northwest.

Answering that question requires careful consideration of climate change. The Climate Impacts Group at the University of Washington says global warming could lead to a nearly 60-percent loss of Northwest snow pack in 50 years, fundamentally altering the natural-resource cycle that sustains this region. Less snow spoils the ski industry in winter, then results in reduced spring and summer river flow for agriculture, fishing and, central to this discussion, summer hydropower production.

The vast majority of the scientific community identifies human production of greenhouse gases as the principal cause of climate change. The primary human contribution is carbon dioxide from burning fossil fuels in automobiles and power plants. Coal plants, even “clean” coal plants, emit more carbon dioxide emissions per unit of energy produced than plants fueled by other fossil fuels, such as natural gas.

Adding 2,000 megawatts of new (traditional) coal to the resource mix of utilities serving Northwest consumers could quicken the pace of global warming – accelerating the diminution of snowpack and reduction in hydropower potential in the midst of rising summertime electric demand in the Northwest (for air conditioning).

More-efficient “clean coal” combustion promises to reduce the per-energy-unit volume of CO2 emissions by 20 percent or more. Sequestration technology may someday emerge as a safe and effective means of permanently storing the carbon captured from the coal plants. We will consider “clean coal” and sequestration technologies more deeply in a future Transformer. It must be noted, however, that “clean coal” power is more expensive than traditional coal at this time, that effective sequestration is a goal rather than a reality, and that the vast majority of new proposals in the Northwest are for traditional plants burning pulverized coal.

Even at its higher cost, “clean coal” might be a reasonable replacement for much dirtier existing plants, though that’s far less an issue in Northwest states than in other parts of the country. And increased regulation of carbon emissions could make the modern-style plants cost-competitive with their traditional brethren.

Other Risks

Any assessment of coal as an energy resource must consider the human health and environmental impacts of extraction, transportation and generation of power. It also must make note of the unequal division of risk between those living in power production areas and those living in predominately consumptive areas.

Generating plants tend to be located in rural and often economically distressed areas. In this region, that means more coal plants in the rural communities of Montana and Idaho. The steady supplies of cheap coal-generated electricity generally flow to population centers in Washington, Oregon, Idaho and California.

These ultimate consumers escape the direct impacts of extraction, as well. All forms of mining -- underground tunneling, mountaintop removal or, as is common in the West, surface strip mining – alter landscapes and create hazardous wastes.

Unless the generation plant is located at the mine mouth, coal must be transported by rail. A 500-megawatt plant requires 40 train cars of coal a day to bring in the 1.4 million tons of coal it will burn in a year. While trains are an excellent means of transportation, diesel locomotives in the United States emit thousands of tons of nitrogen oxide and fine particulate matter every year, and more particles fly off the filled coal cars during transport.

Then there’s the plant itself. In an average year, according to UCS, a traditional 500-megawatt coal plant puts out 10,000 tons of acid rain-causing sulfur dioxide, 10,200 tons of smog-producing nitrogen oxide and 3.7 million tons of climate-changing carbon dioxide. Other pollutants emitted by coal burning include carbon monoxide, mercury, arsenic, airborne particulates, toxic heavy metals and trace amounts of uranium.

“Clean coal” plants could eliminate or substantially reduce the volume of many these pollutants and cut water use (a traditional 500 megawatt plant uses 2.2 billion gallons per year) by 30 percent or more. Their greater efficiency should somewhat reduce relative CO2 emissions, though the main advantage in that area would be the ability to effectively capture the CO2 for potential sequestration.

Regulations’ Implications

Growing appreciation of CO2’s climate-changing effects has led to international, regional and state caps and/or taxes on carbon emissions. The Kyoto process continues despite U.S. opposition. American states – individually and in regional compacts – and more than 172 cities, including Seattle and 20 other Northwest municipalities, are enacting or working toward limits and/or fee assessments on CO2 emissions from fossil-fueled power plants.

A recent “Sense of the Senate” measure passed as an amendment to the Senate’s version of this year’s energy bill acknowledges the need to (eventually) mandate carbon reductions. Something like the original McCain-Lieberman Climate Stewardship Act, which called for reducing greenhouse gas emissions to year-2000 levels by 2010 and creating a market-based system of emissions allowance trading, may be passed in the not-too-distant future.

These looming regulations and fees would increase the cost of fossil fuel-generated power, making traditional coal more expensive relative to “clean coal” and relative to renewables, especially wind, despite massive fossil-fuel subsidies that dwarf federal renewables incentives.

Opportunity Costs

The Tellus Institute study shows that cost-competitive renewable energy and money-saving energy efficiency can meet all of the region’s future demand for electricity. The Northwest Power and Conservation Council’s Fifth Power Plan fundamentally confirms that assessment, calling for meeting most load growth with clean energy.

However, the Fifth Plan leaves an opening for coal, and particularly for investigating “clean coal” technologies. But will those investigations simply divert investments from clean energy to further fossil fuel development? Will Northwest consumers see higher bills as coal displaces cheaper renewable or other free-fuel sources in the regional power mix? Will taxpayers benefit from spending billions on sequestration technology?