Another One Bites the Dust….

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"Another One Bites the Dust…."

[I am pleased to introduce a new CP blogger: Sean Pool. He is Special Assistant for Energy Policy at the Center for American Progress. Sean graduated Yale in December 2008 with a double major in environmental engineering and international studies.]

Smoke StackDevelopers at Southern Montana Electric announced Monday that they are scrapping plans to build a 250-megawatt coal plant. Instead, SME has announced that they will seek financing for 120-megawatts of natural gas-fired generation and six megawatts of wind power.

Earthjustice, a top non-profit environmental law firm, succeeded in convincing the Montana courts that the Department of Environmental Quality should have to take into account the 2.1 million tons of annual carbon dioxide that the plant would emit before giving it the green light.

In addition to the lawsuits, the capital costs of the project had ballooned (in fact, since 2004, the project’s projected cost has doubled from initial estimates of $456 million to nearly $900 million), to a point where the project manager for the facility declared on KBLG radio in Billings, MT that the project “just simply cannot be accomplished.” He went on to cite the “aura of uncertainty” surrounding coal fired power as a leading factor in the decision to switch to gas and wind.

While many predicted that coal would only grow as a power source throughout the remainder of this decade, SME’s cancellation of the Highwood Generating Station actually comes in the wake of a wave of coal plant project cancellations that has been sweeping the country since late 2007.

This wave began with the widely-publicized cancellation of eight planned TXU conventional coal plants in early 2007. The deal signaled a shift in the status quo when private equity firms realized they could turn a profit by buying out the Texas power company in the midst of its legal battle with local residents and plummeting stock prices, canceling plans to build eight of eleven proposed plants, and investing instead in energy efficiency.

59 other coal plants with estimated capital costs exceeding $50 billion followed suit in 2007 alone, according to research compiled by Coal Moratorium NOW! and Rainforest Action Network. In 2008, the number was 18, and it looks like we’re up to at least 1 so far in 2009.

While many of these big-profile coal cancellations occurred due to rising capital costs (including the increases in the price of steel, construction, and increased demand), the environmental movement deserves some credit. After all, “concerns about global warming” wouldn’t be a factor inciting grassroots resistance to coal construction if people weren’t concerned.

The inability of the power industry to put together even a single demonstration coal plant with carbon capture technology probably hasn’t helped either, despite a multi-million dollar ad campaign put out by the American Coalition for Clean Coal Electricity. The 5.4 million cubic yard spill of toxic coal ash that took place just before Christmas may be the cherry on top.

But while it may seem like Big Coal is fighting an increasingly uphill battle against public opinion, let’s not forget about President Obama’s at least tepid support for the industry. Indeed, the “aura of uncertainty” may still hang over the future of coal in this country, but at least the 65,000 residents of Great Falls Montana can take satisfaction in knowing they helped another one bite the dust.

[JR: I would add that given this is Montana, which has a big wind resource, a mere 6 MW of wind seems kind of token.]

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6 Responses to Another One Bites the Dust….

  1. jorleh says:

    Where is the first CCS of the U.S.? Coal industry has put some money to their clean technology? How much?

  2. DavidONE says:

    jorleh,

    Here’s the coal industry’s clean tech: http://www.youtube.com/watch?v=PdHuB7Ovl2o

  3. David Walters says:

    Too bad. Now they will only be putting out half the CO2 and particulate…and still contributing to climate change.

    David

  4. danl says:

    David,
    You’re looking at this the wrong way. Electricity contributes to 2/3 of our energy usage in the Unites States. Natural Gas puts out approx. 1/3 the GHG emissions per kW than coal. Sure, natural gas has high prices and fairly low reserves, but it is certainly a step in the right direction. Just think, hypothetically, if all of our plants were nuclear and nat. gas.

  5. llewelly says:

    Too bad. Now they will only be putting out half the CO2 and particulateā€¦and still contributing to climate change.
    David

    Slightly less than 1/6th, actually. 120MW is less than 1/2 of 250MW, and gas produces roughly 1/3 as much CO2 as coal. (Presumably they’ll eventually need the other 130MW of power they planned to obtain. But there’s little penalty for buying wind power piecemeal (unlike coal, gas, or nuclear) and prices on wind units are likely to come down in the near future – possibly a lot. So I’m guessing they’ll by wind piecemeal as time goes on.)

  6. The Montana’s company’s CEO has had his lawyer contact the NY Times, explaining that newspapers were overstating his decision… he’s deferring the coal decision, not abandoning it. If the regulatory framework becomes clearer, and it’s still affordable, coal may still be an option. (See Green Inc).

    In any event, it’s been a VERY good week for the environment with all the coal announcements… In Georgia… the big fines for an E.ON subsidiary in Kentucky… Montana… Michigan!

    And this one. Though this is very sad news for the people who are hurt by it, the Chinese government has determined that their reliance on coal has lead to a dramatic increase in birth defects.

    http://www.businessgreen.com/business-green/news/2235523/china-links-coal-birth-defects