Making Sense of the “Coal Rush”

U.S. PIRG Reports

Making Sense of the “Coal Rush”: The Consequences of Expanding America’s Dependence on Coal

July 2006

Executive Summary | News Release

Download the full report. (464 KB, PDF)

News Room

For Immediate Release:
July 20, 2006

For More Information:
Rob Sargent 617-747-4317
Travis Madsen 805-730-1391 x306
Kimberly Larson 206-357-1788

"Coal Rush” to Threaten Environment, Challenge America’s Energy Security
Over 150 Proposed Plants Would Boost Global Warming Pollution by 10 Percent, Coal Consumption by 30 Percent; Dirty Technologies Predominate

Energy companies are planning to build over 150 coal-fired power plants across the United States, according to a report released today by U.S. PIRG, the National Association of State PIRGs. Far from enhancing America’s energy security, the wave of proposed plants – most of them powered by dirty, last-generation technologies – would dramatically increase global warming emissions and pose energy security and economic problems.

“We’re lining up for a sprint in the wrong direction on U.S. energy policy,” said Rob Sargent of U.S. PIRG. “Expanding our dependence on coal would only worsen its impact on global warming emissions and intensify the other environmental impacts and economic risks.”

The U.S. PIRG analysis, based on information from the U.S. Department of Energy and published reports, documented the potential impacts of completing the 150 plants proposed across the U.S. Among the impacts would be the following:

A 10 percent increase in U.S. global warming emissions. This increase would occur amid urgent scientific warnings about the dangers posed by global warming and growing consensus that, to avoid the worst consequences, America and the world must achieve steep cuts in global warming emissions by the middle of this century.

A 30 percent increase in U.S. coal demand, which would require the opening of new mines and expanded infrastructure for delivering that coal to power plants. The increase in coal demand would exacerbate the environmental devastation caused by coal mining, which has already denuded more than seven percent of Appalachian forests, buried 1,200 miles of streams in fill, and resulted in the release of hundreds of millions of pounds of toxic chemicals. It would also increase the likelihood of future cost increases for coal.

Expanding America’s coal demand would come at a high price,” said Joe Lovett of the Appalachian Center. “New mines would level more mountains, permanently bury hundreds of miles of pristine mountain streams under billions of tons of mining waste and continue to devastate local communities located near the mines.”

$137 billion invested in dirty, outdated coal-burning technology. Despite recent hype about the promise of “clean coal” – including the prospect of capturing and storing carbon dioxide emissions from power plants underground – only 16 percent of the proposed plants nationwide would use coal gasification technology, and none would incorporate carbon capture and storage. The rest would use older technologies that are already responsible for massive global warming emissions and the release of large quantities of pollutants responsible for human health problems.

Lost opportunity for investment in cleaner technologies. Investing the $137 billion slated for new coal-fired power plants into cleaner alternatives would yield economic and energy security benefits for the United States. If invested in energy efficiency, those funds could reduce U.S. electricity demand by about 19 percent in 2025 vs. business as usual – obviating the need for the all of the coal plants on the drawing board. If invested in wind energy, the United States could develop 110 gigawatts of the best wind energy locations in the western U.S., which could produce electricity at an overall cost comparable to coal.

“We could avoid the need to build any new coal plants if we simply invested the same amount of money in energy efficiency,” said Travis Madsen, a policy analyst who authored the report for USPIRG, “and we’d save money at the same time.”

Economic risks for ratepayers, utilities and generators, who could be liable for the cost of complying with any new rules to limit global warming emissions from power plants – rules that are increasingly likely as evidence mounts of the potential environmental and economic impacts of global warming.

“Companies that build coal-fired power plants today are gambling with their investors’ money,” said Leslie Lowe of the Interfaith Center on Corporate Responsibility, a coalition of investors promoting social responsibility. “They are betting that operating coal fired power plants will continue to be cheap, despite the near certainty that global warming pollution will be regulated within the lifetime of the plants.”

Despite these problems, the “coal rush” appears to be accelerating across the United States. In April, TXU Corporation announced plans for eight new coal-fired units in Texas, adding to three previously announced projects, for a total of 8,600 MW and $10 billion in capital investment. In June, NRG Energy announced six new coal-fired projects from Texas to Connecticut. And in July, PacifiCorp announced plans for two new coal-fired facilities to serve markets in Oregon.

The report, Making Sense of the Coal Rush: The Consequences of Expanding America’s Dependence on Coal, calls for several steps to stem the “coal rush.” First, our leaders should join Idaho officials in establishing a moratorium on new coal plants in, in order to evaluate the environmental and economic impacts. Second, our leaders should establish a cap on carbon dioxide pollution, to be lowered over time. Third, public money should not be spent on coal technology. Finally, our leaders should dramatically expand programs to develop energy efficiency and renewable energy resources.

At the federal level, on June 20, Rep. Waxman introduced the Safe Climate Act in the U.S. House of Representatives. It would require the U.S. to reduce its global warming pollution 15 percent by 2020 and by 80 percent by 2050. To achieve these targets, the bill calls for improved energy efficiency and a greater reliance on clean, renewable energy sources, while providing companies flexibility in meeting the pollution-reduction goals through a “cap-and-trade” program. Senator Jeffords of Vermont is introducing a similar bill in the Senate today.

“ America could substantially reduce its global warming pollution using existing technology to improve energy efficiency and increase the use of clean, renewable energy sources such as wind, solar, geothermal and biomass,” said Sargent. “What’s more, these steps would be good for America’s economy; creating jobs and improving productivity. But, none of this is possible if we stake our future on coal.”

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U.S. PIRG, the National Association of State PIRGs (Public Interest Research Groups) , is a network of state-based, non-partisan public interest advocacy organizations with a national advocacy office in Washington, D.C. We uncover threats to public health and well-being and fight to end them, using the time-tested tools of investigative research, media exposes, grassroots organizing, advocacy and litigation. U.S. PIRG’s mission is to deliver persistent, result-oriented activism that protects public health and the environment, encourages a fair, sustainable economy, and fosters responsive, democratic government. In some states, the PIRG's environmental work is housed in partner organizations: Environment California, Environment Colorado, Environment Illinois, Environment Maine, Environment Maryland, Environment Michigan, Environment North Carolina, PennEnvironment and Environment Texas. For more information, see www.pirg.org.

Executive Summary

Energy companies have proposed building a fleet of new coal-fired power plants across America. As of June 2006, power producers have approximately 150 new coal-fired plants on the drawing board, representing a $137 billion investment and the capacity to supply power to 96 million homes.

If energy companies succeed in building even a fraction of these new power plants, it would have major impacts on America’s environment and economy. Further, this “coal rush” would consume investment dollars that could otherwise promote more sustainable energy sources.

Fortunately, alternatives exist that would reduce or eliminate the need for new coal-fired power plants. By funneling investment instead into improvements in energy efficiency and expansion of renewable energy, the U.S. can avoid the potential impacts of the “coal rush” and improve the economy, the environment and public health.

The “coal rush” would increase U.S. global warming pollution at a time when aggressive action is needed to reduce emissions.

• To avoid the worst consequences of global warming, scientists believe that the U.S. needs to stabilize emissions within a decade, begin reducing them soon thereafter, and cut global warming pollution by as much as 80 percent by the middle of this century. New coal-fired power plants will take us in the wrong direction.

• If all of the proposed plants are built, they would increase U.S. carbon dioxide pollution from electricity generation by more than 25 percent above 2004 levels. This would be equivalent to a 10 percent increase in total U.S. emissions and a 2.4 percent increase in world emissions.

• The vast majority of proposed plants use traditional coal-burning technology, which emits massive amounts of carbon dioxide. Only 16 percent of the proposed plants would use coal gasification technology and could someday be equipped to capture and store carbon dioxide. Even these plants would require costly future upgrades to avoid large releases of global
warming pollutants.

Increasing America’s dependence on coal carries significant economic risks for power generating companies, their shareholders, utility ratepayers, and the economy as a whole.

• The growing urgency of addressing global warming makes limits on carbon dioxide pollution a virtual certainty for the future. As these limits are set, coal-fired power plants will decline in value compared to lesspolluting resources. Additionally, companies or ratepayers may be forced to pay the significant cost of retrofitting the new plants to capture and store carbon dioxide.

• Companies that build coal-fired power plants today knowingly and significantly contribute to the public health, environmental and property damage that will result from global warming. Such companies face potential legal risks, similar to the lawsuits filed against the tobacco industry in the last decade.

• The new coal-fired power plants, if built, will strain the U.S.’s ability to extract and deliver enough coal to keep them running. U.S. coal demand would increase by over 30 percent if all the plants are built, requiring additional mines and expanded railroad infrastructure to move the coal around the country. Mining additional coal would damage America’s land and water.

• According to the U.S. Department of Energy, currently operational coal mines have enough recoverable coal to supply the power industry for only 18 years at current levels of demand (and fewer years if demand increases).

• While the U.S. has enough coal supplies to sustain current levels of consumption for nearly 200 years, extraction of that coal is likely to damage wide areas of land now used for agriculture, housing and recreation, while fouling water supplies and harming wildlife.

• Between 1985 and 2001, “mountaintop removal” coal mining in Appalachia cut down more than 7 percent of the region’s forests and buried more than 1,200 miles of streams.

• In 2004, coal mines across the U.S. reported the release of more than 13 million pounds of toxic chemicals, including over 300,000 pounds dumped directly into streams and rivers. The “coal rush” would increase health-threatening air pollution.

If all of the planned coal-fired power plants are built, they would increase total pollution from power plants and other industrial facilities on the order of 1 to 3 percent, including:

• 120,000 tons per year of sulfur dioxide, a major ingredient in fine particle pollution, linked to premature death and respiratory and cardiovascular disease;

• 240,000 tons per year of nitrogen dioxide, a major ingredient in the photochemical smog that plagues many cities across the U.S. on summer days; and

• 3 tons per year of mercury, a neurological toxicant that contaminates fish in rivers, lakes and the oceans.

The “coal rush” would consume investment dollars that could be used to promote safe and sustainable energy sources, including energy efficiency and renewable energy.

• Building all of the coal-fired power plants on the drawing board would require capital investment of 6 Making Sense of the “Coal Rush” $137 billion. On top of that, energy companies would have to spend more than $100 billion to operate, maintain and fuel the plants and build transmission lines.

• If that $137 billion in capital were instead directed toward energy efficiency, it could reduce electricity demand in 2025 by about 19 percent compared to a business-as-usual forecast (1 million GWh/year), without additional investment for transmission and distribution. In other words, energy efficiency could completely alleviate the need to build any new coal-fired power plants—and do so for less cost and with zero global warming pollution.

• Directed instead toward renewable energy, that $137 billion could develop 110 GW of the best wind resources in the western U.S. with a cost of electricity comparable to conventional coal. Alternatively, the money could build over 50 GW of promising zeroemission solar technologies like concentrating solar thermal power plants—predicted to provide electricity at prices competitive with coal within the next 10 years, with the potential to supply energy day or night using thermal storage.

• Wind, solar, tidal, geothermal and biomass resources—coupled with energy-saving renewable technologies such as passive solar heating and lighting, solar hot water heating and geothermal heat pumps—could provide a large and growing share of America’s energy. A consistent emphasis on renewables in public policy and in research and development funding could bring many of these technologies into the mainstream—but not if America’s investment dollars are staked on coal.

Citizens and government should act to stop the “coal rush” and instead pursue a cleaner, more sustainable path to satisfying America’s energy needs.

• States and the U.S. as a whole should impose strong caps on global warming pollution from power plants at levels that are sufficient to minimize human interference with the global climate— on the order of 80 percent below 1990 levels by mid-century.

States and the federal government should not allow any new coal facility to be built, unless:

• All the costs of coal-fired power plants—including the societal cost of global warming and the probable cost of additional pollution control requirements—are fully considered when utility investment decisions are made;

• Gasified coal with carbon storage is demonstrated to be the least-cost way to reduce global warming pollution consistent with climate stabilization goals, compared to other clean resources that could satisfy or reduce energy demand, such as renewable energy and energy efficiency; and

• Any new gasified coal plants with carbon storage are used to replace old, inefficient coal-fired power plants, not augment them.

• Public funds should not be used to support the construction of any coalfired power plants.

• Leaders at all levels of government should take aggressive action to encourage the development of cleaner alternatives to coal-fired power plants, particularly measures to improve energy efficiency and encourage the development of clean renewable resources