2 Industry Leaders Bet on Coal But Split on Cleaner Approach
By SIMON ROMERO
Published: May 28, 2006
More than a century ago a blustery Wyoming politician named Fenimore Chatterton boasted that his state alone had enough coal to ''weld every tie that binds, drive every wheel, change the North Pole into a tropical region, or smelt all hell!''
His words seem prophetic.
The future for American energy users is playing out in coal-rich areas like northeastern Wyoming, where dump trucks and bulldozers swarm around 80-foot-thick seams at a Peabody Energy strip mine here, one of the largest in the world.
Coal, the nation's favorite fuel in much of the 19th century and early 20th century, could become so again in the 21st. The United States has enough to last at least two centuries at current use rates -- reserves far greater than those of oil or natural gas. And for all the public interest in alternatives like wind and solar power, or ethanol from the heartland, coal will play a far bigger role.
But the conventional process for burning coal in power plants has one huge drawback: it is one of the largest manmade sources of the gases responsible for global warming.
Many scientists say that sharply reducing emissions of these gases could make more difference in slowing climate change than any other move worldwide. And they point out that American companies are best positioned to set an example for other nations in adopting a new technique that could limit the environmental impact of the more than 1,000 coal-fired power projects on drawing boards around the world.
It is on this issue, however, that executives of some of the most important companies in the coal business diverge. Their disagreement is crucial in the debate over how to satisfy Americans' energy appetite without accelerating climate change.
One of those executives, Michael G. Morris, runs American Electric Power, the nation's largest coal consumer and biggest producer of heat-trapping carbon dioxide emissions from its existing plants. He is spearheading a small movement within the industry to embrace the new technology. His company plans to build at least two 600-megawatt plants, in Ohio and West Virginia, at an estimated cost of as much as $1.3 billion each.
The company says these plants are not only better for the environment but also in the best interests of even its cost-conscious shareholders. While they would cost 15 to 20 percent more to build, Mr. Morris says they would be far less expensive to retrofit with the equipment needed to move carbon dioxide deep underground, instead of releasing it to the sky, if limits are placed on emissions of global warming gases.
''Leave the science alone for a minute,'' Mr. Morris said in an interview at the Columbus, Ohio, headquarters of his company. ''The politics around climate issues are very real. That's why we need to move on this now.''
But most in the industry are not making that bet. Among them is Gregory H. Boyce, chief executive of Peabody Energy, the largest private-sector coal producer in the world thanks in part to its growing operations here in Wyoming and with aspirations to operate coal-fired plants of its own. Mr. Boyce's company alone controls reserves with more energy potential than the oil and gas reserves of Exxon Mobil.
''We're still not convinced that the technology or cost structure is there to justify going down a path where we're not comfortable,'' Mr. Boyce said.
Mr. Boyce's view has prevailed. No more than a dozen of the 140 new coal-fired power plants planned in the United States expect to use the new approach.
The decisions being made right now in industry and government on how quickly to adopt any new but more costly technologies will be monumental.
''Coal isn't going away, so you have to think ahead,'' said Gavin A. Schmidt, a climate modeler at the Goddard Institute for Space Studies, part of NASA. ''Many of these power stations are built to last 50 years.''
Promise and Perils
Michael Morris and Gregory Boyce, both kingpins in their industries, have a lot in common. They do a lot of business together -- Mr. Morris is one of Mr. Boyce's largest customers. They are solid Republicans. And they serve together on various industry initiatives.
They agree that energy from coal -- the nation's most important source of electricity -- is cheaper than energy from oil and natural gas and is competitive with the uranium used in nuclear power plants. And coal could serve new uses: replacing petroleum in making chemicals, for example, or even fueling vehicles.
But while sooty smokestacks are no longer a big problem in modern coal-burning power plants, the increase in global warming gases is. A typical 500-megawatt coal-fired electricity plant, supplying enough power to run roughly 500,000 homes, alone produces as much in emissions annually as about 750,000 cars, according to estimates from Royal Dutch Shell.
Coal has no stronger evangelist than Mr. Boyce, who grew up on Long Island, the son of a mining executive, and studied engineering in Arizona. He argues that a way to reduce carbon dioxide emissions can be found without having to switch from the existing cheaper coal-burning technology.