Denial of permit fuels debate over future role of coal
BY JOHN HANNA
Associated PressThe state's denial of a permit for two coal-fired power plants, believed to be the first action of its kind in the nation, has intensified a debate over the fuel's future in generating electricity.
Environmentalists said Friday that the decision by the state's top air-quality regulator, citing concerns about potential carbon dioxide emissions, will help them in fighting other coal plants. They also said it's another signal that attitudes about burning coal have changed because of concerns about global warming.
"As far as I know, this is the first time an air permit for a coal-fired power plant has been denied based on concerns about the impact of carbon dioxide emissions on human health and the environment," Nick Persampieri,
an attorney in Denver for the environmental group Earthjustice, said Friday. "We think it is a big deal."
But Kansas has no regulations on CO2, and it wasn't clear what other policies state officials would pursue, particularly with many legislators upset over the decision and opposed to state carbon dioxide limits.
Coal and utility industry representatives said coal is likely to remain an important energy source because of growing demands for electricity. According to U.S. Department of Energy statistics, about half of the nation's electricity comes from coal-fired plants; for Kansas, the figure is 75 percent.
"No one here is inclined to call it any kind of turning point," said Ed Legge, a spokesman for the Edison Electric Institute, a trade group representing investor-owned utilities. "There's a still a lot of unanswered questions, No. 1 being: What are we going to replace coal with?"
The decision Thursday by Rod Bremby, the state's secretary of health and environment, prevents Sunflower Electric Power Corp. from starting construction on a $3.6 billion project outside Holcomb in rural western Kansas. The utility is expected to challenge the ruling.
Sunflower had hoped to build two, 700-megawatt coal-fired plants, creating enough capacity to meet peak demands of all the households in Denver, Oklahoma City and Albuquerque. Most of the new power would have been sold out of state.
Bremby denied the permit over concerns about potential CO2. Although Kansas has no regulations, Attorney General Paul Morrison advised Bremby last month that state law gave him the authority to declare a pollutant a health or environmental hazard and deny a permit.
He also described his action as a step toward addressing CO2 emissions. Some legislators believe any regulations would hurt the economy.
"That means that he's going to shut down every coal-fired plant in the state, if he's honest with his reason for denying this particular permit," said Sen. Jay Emler, a Lindsborg Republican and chairman of the Senate Utilities Committee. "He's going to have to look at all the other industries in this state."
Spokesman Joe Blubaugh said Bremby doesn't know what shape a new policy will take -- it could involve voluntary efforts to reduce emissions -- and doesn't have a timetable for developing a program.
Meanwhile, the debate over coal-fired plants rages.
The National Energy Technology Lab reported last week that of 151 announced projects for coal-fired plants, only 15 had been built in the past five years, and 76 remained "uncertain."
In June, Florida regulators rejected what would have been the nation's largest coal-fired plant, near the Everglades, saying it was not the most cost-effective alternative for the utility proposing it.
Last month, the Oklahoma Corporation Commission rejected a coal-plant proposal, saying other alternatives such as conservation programs and renewable resources hadn't been adequately considered.
Kansas has 15 coal-fired generating units, and the three largest, each more than 730 megawatts, are operated by Westar Energy Inc., about 30 miles northwest of Topeka.
Spokeswoman Karla Olsen said the utility is reviewing Bremby's decision but noted that Bremby "made his decision based on the unique characteristics of Sunflower's application."
"We continue to plan for the needs of our customers based on our own situation," she added.
© 2007 Wichita Eagle and wire service sources. All Rights Reserved. http://www.kansas.com
http://www.latimes.com/news/opinion/la-oe-sperling21jun21,0,6045562.story?coll=la-opinion-rightrail
From the Los Angeles TimesA new carbon standard
Taxes on CO2 emissions alone won't get us where we need to go.By Daniel Sperling
DANIEL SPERLING, professor and director of the Institute of Transportation Studies at UC Davis, is co-leader of the University of California study of the proposed low-carbon fuel standard.
June 21, 2007
PROMINENT VOICES are calling for national carbon taxes as a way to fight global warming. Former Federal Reserve Chairman Alan Greenspan, the Los Angeles Times' editorial board and economists on the left and the right all support a carbon tax as the cure for our greenhouse gas pains. It isn't, at least for transportation. As the California Air Resources Board votes today in Los Angeles on adopting new carbon standards, we should understand that global warming can't be solved by a single policy or solution.
Carbon taxes — taxes on energy sources that emit carbon dioxide (CO2) — aren't a bad idea. But they only work in some situations. Specifically, they do not work in the transportation sector, the source of a whopping 40% of California's greenhouse gas emissions (and a third of U.S. emissions).
The one sector where carbon taxes will work well is electricity generation, which accounts for 20% of California emissions (and 40% of U.S. emissions). The carbon tax works because electricity producers can choose among a wide variety of commercial energy sources — from carbon-intense coal to lower-emitting natural gas to zero-emission nuclear or renewable energy. A modest tax of $25 per ton of carbon dioxide would increase the retail price of electricity made from coal by 17%. Given the many choices, this would motivate electricity producers to seek out lower-carbon alternatives. The result would be innovation, change and decarbonization.
Transportation is a different story. Neither producers nor consumers would respond to a $25-a-ton tax. Fuel producers would not respond because they have become almost completely dependent on petroleum, which supplies 96% of all transportation fuels. They cannot easily find low-carbon alternatives. Even corn ethanol is only slightly better than gasoline.
Drivers also would be unmotivated by a carbon tax. A CO2 tax of $25 a ton would raise the price of gasoline only about 20 cents a gallon. This would not induce drivers to switch to low-carbon alternative fuels because virtually none are available. In fact, it would barely reduce their consumption. A recent study at the UC Davis Institute of Transportation Studies found that the "price elasticity" of demand for gasoline has shrunk; a price increase of 10% induces less than a 1% reduction in gasoline consumption. Thus, that 20-cent increase would be barely noticeable. In the transport sector, a carbon tax would have to be huge to induce change.
What about mandating use of particular fuels? That doesn't work because it is impossible to know which horse to back. At UC Davis, we have decades of experience in transportation technology, policy and consumer behavior — yet we still cannot predict which fuels are likely to succeed. What we do know is that there are many low-carbon fuel options available and that many industry and university labs are making rapid progress in developing more. The potential for new fuels with dramatically lower emissions is very real, but we have no clear winner yet.
And elected officials are no more qualified to pick winners than are university scientists. I just returned from another trip to Washington, where farm lobbyists have stirred a buzz for ethanol and coal lobbyists for coal-based liquids. But ethanol made from corn provides little reduction in greenhouse gas emissions, and coal liquids threaten huge increases. Leave it to politicians, and this is what they will mandate.
Here is what we can say — and did, in our recent recommendations to Gov. Arnold Schwarzenegger and the Air Resources Board: Cutting carbon emissions from transportation fuels with mandates and taxes won't work. But a new approach using a low-carbon fuel standard will. This new standard will require oil companies and other fuel providers to reduce carbon and other greenhouse gas emissions of transportation fuels by at least 10% by 2020. It will be up to the providers to choose how to do that, including blending low-carbon biofuels into conventional gasoline, selling low-carbon fuels, such as hydrogen, and buying credits from providers of other low-carbon fuels, such as low-carbon electricity or natural gas. This allows businesses to identify new technologies and strategies that work.
The low-carbon fuel standard picks neither winners nor losers. Instead, it sends a fuels-neutral signal that alternatives are welcome in California's $50-billion-a-year transportation fuels marketplace. The Wall Street Journal recently described a new "fuels gold rush" as innovators and well-funded distributors battle for California's emerging alternative fuels market. Real solutions to global warming are needed. Let's just be sure they're effective.