On Mission to Save Coal, Perry Bucks Status Quo

Via The Houston Chronicle:

WASHINGTON – In his first public appearance as energy secretary at an NRG Energy coal plant outside Houston, Rick Perry said he was witnessing the future of fossil fuels, proclaiming, “The solution to many of the challenges we have in the world today are displayed behind me.”

NRG’s Petra Nova facility, which began operations in January, represents the first commercial-scale system to remove carbon dioxide from emissions of a coal-fired power plant, a major milestone for a coal industry fighting to survive in a low-carbon world. The carbon capture system, however, was also hugely expensive, costing $1 billion and relying on almost $200 million in clean energy grants from the Obama administration.

As governments worldwide begin to set limits on greenhouse gases, the coal industry is looking to carbon capture to reduce carbon emissions that are far higher than other fossil fuels. But even as Perry and other officials trumpet “clean coal” as the way of the future, the Trump administration has signalled it plans to slash funding for commercializing the technology, preferring to roll back environmental and power market rules they say put coal-fired power plants at a disadvantage to wind, solar and other fuels

But some within the coal industry argue the strategy is short-sighted. In a letter to the White House last month, Colin Marshall, CEO of Cloud Peak Energy, one of the country’s largest coal companies, said that power utilities remained reluctant to invest in new coal plants despite the administration’s efforts to reduce regulation. He urged Trump to support carbon capture technology, including “robust funding” for the Energy Department’s projects.

“If Trump is going to unlock our domestic energy resources, I don’t know how he’s going to do it without this kind of policy support.” said Jeff Erikson, general manager for North America at the Global CCS Institute, a trade group whose membership includes Peabody Energy, Occidental Petroleum and Exxon Mobil.

Almost all of the coal consumed in this country goes to power generation. The share of American electricity from coal plants, however, has fallen from more than 50 percent in 2001 to 33 percent in 2015, according to the Energy Department.

Trump has taken steps strategy to repeal environmental protections like Obama’s Clean Power Plan, which would have required states to cut carbon emissions by 30 percent on average, shuttering many coal plants. Last month, Perry wrote a memo ordering the Energy Department to undertake a two-month study into “the extent to which continued regulatory burdens, as well as mandates and tax and subsidy policies, are responsible for forcing the premature retirement” of coal and nuclear plants.

Trump has “already come back and changed the direction of the Obama administration,” said Frank Maisano, a partner with the lobbying firm Bracewell. “Coal plants that would certainly have been closed will likely not be pressured to be closed.”

At the Department of Energy, officials in the Office of Fossil Energy said they are being advised to focus on researching new technologies, leaving the task of commercial development to the energy industry itself. That is a shift from the how the department operated under both presidents Barack Obama and George W. Bush, who used federal funding to speed new energy technologies like wind turbines and hydrogen cells to market faster than the private sector could deliver on its own.

The shift is part of a Trump proposal to slash more than $3 billion from the Energy Department’s budget – an 18 percent cut that does not include its nuclear weapons program. But without government funding, many carbon capture projects under consideration in the United States are likely not to get built, said Chris Smith, a former assistant secretary for fossil energy at the Energy Department during the Obama administration.

See the article here.