The whole concept of “clean coal” was predicated around two things: That regulation of carbon emissions would become a huge burden on the coal industry, and that the U.S. electrical grid was so dependent on coal that finding a way to keep burning the stuff was vital. On that basis, the government put aside billions to invest in various experiments in reducing emissions from burning coal. But again and again, projects to support the development of “clean coal” generated much more smoke than heat including the $1.8 billion failed “FuturGen” project in Illinois that died in 2008, or the repackaged version of the project, which also failed a few years later.
But it was far from the largest such disaster.
The fortress of steel and concrete towering above the pine forest here is a first-of-its-kind power plant that was supposed to prove that “clean coal” was not an oxymoron …
The project was hailed as a way to bring thousands of jobs to Mississippi, the nation’s poorest state, and to extend a lifeline to the dying coal industry.
And how are things going on those tasks?
The Kemper coal plant is more than two years behind schedule and more than $4 billion over its initial budget, $2.4 billion, and it is still not operational.
Meanwhile, coal’s contribution to the U.S. electrical grid has fallen from 51 percent to 33 percent, and it’s still dropping. Making any further investment in “clean coal” is purely pointless.
How could any project veer so horribly off track? It’s simple: Everyone had incentives to cheat.
The system of checks and balances that are supposed to keep such projects on track was outweighed by a shared and powerful incentive: The company and regulators were eager to qualify for hundreds of millions of dollars in federal subsidies for the plant, which was also aggressively promoted by Haley Barbour, who was Southern’s chief lobbyist before becoming the governor of Mississippi. Once in office, Mr. Barbour signed a law in 2008 that allowed much of the cost of building any new power plants to be passed on to ratepayers before they are built.
Rather than a showcase for “clean coal,” the whole project became a major example of dirty politics. It’s no longer a power plant. It may never be a power plant. Instead, it’s a political power mine—an opportunity to talk up “job creation” and “economic benefit” by pulling in funds that could be better used elsewhere.
For example, the nonfunctioning plant has already cost more than four times as much as President Obama has requested to fight the spread of Zika.
The plant and its owner, Southern Company, are the focus of a Securities and Exchange Commission investigation, and ratepayers, alleging fraud, are suing the company. …
In the end, the Kemper project is a story of how a monopoly utility, with political help from the Mississippi governor and from federal energy officials who pressured state regulators in letters to support the project, shifted the burden of one of the most expensive power plants ever built onto the shoulders of unwitting investors and some of the lowest-income ratepayers in the country.
That’s nothing that should be repeated. Or even continued.
Despite the industry’s ‘War on Coal’ narrative—complaining that mines and mining companies are failing because of dreaded government regulations—the truth is actually much simpler: Natural gas has been absolutely destroying coal in the marketplace. Since shale fracking greatly expanded production of U.S. natural gas, electrical producers across the country have rapidly transitioned away from coal simply because natural gas power plants are cheaper to build, easier to customize, easier to expand, easier to automate, and cheaper to operate.
The decline isn’t just continuing, it’s accelerating.
The most significant decline in recent years has been coal: U.S. coal consumption fell 13% in 2015, the highest annual percentage decrease of any fossil fuel in the past 50 years. The only similar declines were in 2009 and 2012, when coal fell 12% below the level in the previous year.
Gas killed coal. That’s all there is to it.
However, that’s an awfully inconvenient truth in an energy industry where many fossil fuel companies have a finger on both sides of the line. Even when producers are in direct competition, they’re often hand-in-hand in promoting themes of American industry independence where the focus is that reducing environmental and safety legislation equals more jobs.
It certainly isn’t convenient when it comes to making out like a bandit under Chapter 11, or explaining to stockholders how you completely misjudged the market. The closest thing to “clean coal” is the clean getaway lots of executives are making at failing coal companies. They’re getting out of town with their pockets stuffed with dollars while workers and pension plans are simply cleaned out. Which seems awful, but …
Hey! Look over there! It’s the War on Coal! Damn liberals.
By the way, what was it that was going to make the Kemper project so clean in the first place? Carbon capture. The idea was that the carbon dioxide produced in burning coal would be captured and stored under pressure. Better yet, it wasn’t just going to build up. The folks at Kemper actually have a market for their waste CO2.
Most of the carbon dioxide produced by the plant would be captured, compressed, sold and piped to oil fields. There, it would be pumped underground in a process known as enhanced oil recovery, to help push up previously unrecoverable oil to levels where it could be reached.
They want to pump it down wells … to produce more oil.