Tag: clean coal

Clean Coal Subsidies

The federal government has been subsidizing so-called clean coal for decades, and the hand-outs have resulted in one bipartisan boondoggle after another. 

Under Presidents Jimmy Carter and Ronald Reagan, for example, the government pumped $2 billion into the Synthetic Fuels Corporation, which supported efforts to convert coal into a gas fuel. The SFC collapsed in the mid-1980s in a spasm of gross mismanagement, conflicts of interest, and changing market conditions. 

Unfortunately, the government never seems to learn any lessons from the silliness of its energy subsidies. The latest installment of the long-running clean coal scam was highlighted by the Wall Street Journal yesterday: 

For decades, the federal government has touted a bright future for nonpolluting power plants fueled by coal. But in this rural corner of eastern Mississippi, the reality of so-called clean coal isn’t pretty. 

Mississippi Power Co.’s Kemper County plant here, meant to showcase technology for generating clean electricity from low-quality coal, ranks as one of the most expensive U.S. fossil-fuel projects ever—at $4.7 billion and rising. Mississippi Power’s 186,000 customers, who live in one of the poorest regions of the country, are reeling at double-digit rate increases. And even Mississippi Power’s parent, Atlanta-based Southern Co., has said Kemper shouldn’t be used as a nationwide model. 

One of just three clean-coal plants moving ahead in the U.S., Kemper has been such a calamity for Southern that the power industry and Wall Street analysts say other utilities aren’t likely to take on similar projects, even though the federal government plans to offer financial incentives.

Southern recently took $990 million in charges for cost overruns approaching $2 billion.

*** 

Through various subsidies, the federal government had committed nearly $700 million for the Mississippi Power plant, though part of that was the $133 million that the utility will forfeit because of delays.

***

Kemper’s cost, previously projected at around $2.9 billion, soon began to soar. Southern recently estimated the price tag at $4.7 billion.

For more on clean coal and energy subsidies, see Downsizing Government.

Kerry and Lieberman Unveil Their Climate Bill: Such a Deal!

I see that my colleague Sallie James has already blogged on the inherent protectionism in the Senate’s long-awaited cap-and-tax bill.  A summary was leaked last night by The Hill.

Well, we now have the real “discussion draft” of  “The American Power Act” [APA], sponsored by John Kerry (D-NH) and Joe Lieberman (I-CT).  Lindsay Graham (R-SC) used to be on the earlier drafts, but excused himself to have a temper tantrum.

So, while Sallie talked about the trade aspects of the bill, I’d like to blather about the mechanics, costs, and climate effects. If you don’t want to read the excruciating details, stop here and note that it mandates the impossible, will not produce any meaningful reduction of planetary warming, and it will subsidize just about every form of power that is too inefficient to compete today.

APA reduces emissions to the same levels that were in the Waxman-Markey bill passed by the House last June 26.  Remember that one – snuck through on a Friday evening, just so no one would notice?  Well, people did, and it, not health care, started the angry townhall meetings last summer.  No accident, either, that Obama’s approval ratings immediately tanked.

Just like Waxman-Markey, APA will allow the average American the carbon dioxide emissions of the average citizen back in 1867, a mere 39 years from today.  Just like Waxman-Markey, the sponsors have absolutely no idea how to accomplish this.  Instead they wave magic wands for noncompetitive technologies like “Carbon Capture and Sequestration” (“CCS”, aka “clean coal”), solar energy and windmills, and ethanol (“renewable energy”), among many others.

Just like Waxman-Markey, no one knows the (enormous) cost.  How do you put a price on something that doesn’t exist?  We simply don’t know how to reduce emissions by 83%.  Consequently, APA is yet another scheme to make carbon-based energy so expensive that you won’t use it.

This will be popular!  At $4.00 a gallon, Americans reduced their consumption of gasoline by a whopping 4%.  Go figure out how high it has to get to drop by 83%.

Oh, I know. Plug-in hybrid cars will replace gasoline powered ones. Did I mention that the government-produced Chevrolet Volt is, at first, only going to be sold to governments and where it is warm because even the Obama Administration fears that the car will not be very popular where most of us live.  Did I mention that the electric power that charges the battery most likely comes from the combustion of a carbon-based fuel? Getting to that 83% requires getting rid of carbon emissions from power production.  Period.  In 39 years. Got a replacement handy?

Don’t trot out natural gas.  It burns to carbon dioxide and water, just like coal.  True, it’s about 55% of the carbon dioxide that comes from coal per unit energy, but we’ll also use a lot more more electricity over the next forty years.  In other words, switching to natural gas will keep adding emissions to the atmosphere.

Anyway, just for fun, I plugged the APA emissions reduction schedule into the Model for the Assessment of Greenhouse-gas Induced Climate Change (MAGICC – I am not making this up), which is what the United Nations uses to estimate the climatic effects of various greenhouse-gas scenarios.

I’ve included two charts with three scenarios. One is for 2050 and the other for 2100.  They assume that the “sensitivity” of temperature to a doubling of atmospheric carbon dioxide is 2.5°C, a number that many scientists think is too high, given the pokey greenhouse-effect warming of the planet that has occurred as we have effectively gone half way to a doubling already. The charts show prospective warming given by MAGICC.

The first scenario is “business-as-usual”, the perhaps too-optimistic way of saying a nation without APA.  The second assumes that only the US does APA, and the third assumes that each and every nation that has “obligations” under the UN’s Kyoto Protocol on global warming does the same.

As you can plainly see,  APA does nothing, even if all the Kyoto-signatories meet its impossible mandates.  The amount of warming “saved” by 2100 is 7% of the total for Business-as-Usual, or two-tenths of a degree Celsius. That amount will be barely detectable above the year-to-year normal fluctuations.  Put another way, if we believe in MAGICC, APA – if adopted by us, Europe, Canada, and the rest of the Kyotos – will reduce the prospective temperature in 2100 to what it would be in 2093.

That’s a big if.  Of course, we could go it alone. In that case, the temperature reduction would in fact be too small to measure reliably.

I’m hoping these numbers surface in the “debate” over APA.

So there you have it, the new American Power Act, a bill that doesn’t know how to achieve its mandates, has a completely unknown but astronomical cost, and doesn’t do a darned thing about global warming.  Such a deal!

FutureGen: Economic and Political Decisions

People who support expanded federal intervention into areas such as energy and health care naively assume that policymakers can make economically rational and efficient decisions to allocate resources. They cannot, as a Washington Post story today on FutureGen illustrates.

The story describes the political battle over the location of a $1.8 billion ”clean coal” plant. I don’t know where the most efficient place to site such a plant is, or  if such a plant makes any sense in the first place. But the story illustrates that as soon as such decisions are moved from the private sector to the political arena, millions of dollars are spent to lobby the decisionmakers, and members of Congress are hopelessly biased in favor of home-state spending regardless of what might be best for the national economy as a whole.

President Obama has promised to ramp up spending on such green projects. So get ready for some huge political fights over the big-dollar spoils, and get ready for some monsterous energy boondoggles.