Senate shocker: Second biggest U.S. coal producer believes in global warming and strong climate action

Ken Ward, Jr., the best journalist in West Virginia, has been following the landmark Senate climate and clean energy hearings at his blog, “Coal Tattoo: Mining’s Mark on our World.” I’m excerpting his latest piece.

But then there was Preston Chiaro, (above) chief executive for energy and minerals at Rio Tinto, a huge worldwide coal company and the second largest coal producer in the United States, who told lawmakers:

Unmanaged climate change is a threat to our assets, our shareholders, and our employees, and also to civil society and political institutions in many of the countries in which we operate and across the globe.

Committee Chairwoman Barbara Boxer, D-Calif., was kind enough to read into the record part of today’s Gazette story, “Climate bill adds more sweeteners for coal industry. In it, I took a first cut at trying to describe some of the changes that were added to the bill to help coal, in response to efforts by, among others, Sen. Robert C. Byrd, D-W.Va.

Coal Tattoo readers know that some folks in the coal industry “” such as United Mine Workers President Cecil Roberts and American Electric Power President Michael Morris — are taking a much more progressive stance on the climate bill than others, such as Massey Energy President Don Blankenship, who wants the issue to just go away.

But Rio Tinto’s testimony was a real eye-opener “¦ for example, as far as the Boxer-Kerry bill’s tougher near-term emissions reductions, Chiaro said:

“¦ Our advocacy for funding of low-carbon technologies is not an argument against the levels of the targets, which we believe are consistent with the USCAP [The business-oriented U.S. Climate Action partnership] and are required in order to address the climate imperative. Rather, the funding of low-carbon technologies is intended to ensure we reach those targets at as low a cost as possible.

Chiaro noted that the USCAP recommendations “” which he said are “fully reflected” in the Kerry-Boxer bill “” include “support for carbon capture and storage (CCS) demonstration plants” that are “the best chance of transforming coal into a low-emission energy source.”

He went on:

Rio Tinto will continue to urge governments to negotiate a strong global agreement for addressing climate change “¦ We are pleased that the market-based policy features which we have advocated, including incentives for the accelerated development and deployment of low-emissions technologies, a variety of cost-containment mechanisms, and transitional compensation for [affected industries] are largely present in the Kerry-Boxer bill.

The bottom line for Rio Tinto?

Rio Tinto believes that emissions of greenhouse gases from human activities are contributing to climate change and that avoiding human caused changes to the climate is an important international goal.

JR: Let me add one more quote from the testimony, which is it directly aimed at those who are skeptical of market-based solutions in an era where markets have not always worked:

Some observers invariably question whether we should trust markets with such an important task. We believe that we need strong markets in place precisely because it is so important for our efforts to be successful. Markets are unparalleled in their ability to leverage and direct private sector investment, integrate all available information, and help participants to understand market expectations through price signals, share risk, and in the process minimize the marginal costs of reducing GHG emissions. As a commodity producer, we are naturally very comfortable with commodity markets and prefer this approach to government mandates. We feel that the problems with markets are largely known and can be addressed with strong oversight and market regulation. Where markets may fail to address important issues such as carbon leakage, the necessary remedies are well understood, and we stand ready to work with the chairman and the committee to explore these options.