POLITICS:

'Coal Country' poses the biggest obstacle in Senate climate debate

This is the first in an occasional series about the coal industry.

When Columbia University sociologist Dana Fisher investigated how U.S. senators lined up on a 2008 climate bill, one factor outside of party affiliation topped all others in predicting their vote. The "no" votes were more likely to come from coal states.

Now, there is a Democratic U.S. president and a somewhat different bill on the table than the one that collapsed last year, but Fisher said the political dynamics are largely the same.

"Dealing with U.S. coal is going to the biggest thing they're going to have to resolve," she said about U.S. senators currently working out the legislative details of a mandatory cap on greenhouse gases.

The reason the fossil fuel is not a political fossil is due to the financial depth and geographical reach of coal country, analysts say. More than 30 state economies, from Montana to West Virginia, rely to some degree on coal, which fires half of U.S. electricity.

It constitutes 75 percent of railroad shipments and 25 percent of the traffic on barges and lake carriers in the United States, according to the National Mining Association.

"There's 34 states with significant economic leverage to coal, either by mining it, burning it or shipping it," said Kevin Book, managing director of ClearView Energy Partners. He said only Vermont and Rhode Island lack any financial connection to coal.

Coal in their minds, for different reasons

That means that dozens of U.S. senators who will consider climate legislation when and if it reaches the Senate floor likely will have coal in their minds, although often for different reasons. Some represent states that burn a lot of the fuel but don't produce it, while others come from big mining states employing thousands of workers.

Indiana, North Dakota, Ohio, Montana and West Virginia are some of the key battlegrounds, since they are closely tied to the resource and have senators who could determine the fate of a bill.

"Most of the people in my state get their electricity from coal. And so if we do something that dramatically increases the price of coal, we're going to increase their utility bills at a time when they're trying to make ends meet," said Indiana Sen. Evan Bayh, who is one of many Democrats considered potential swing votes on global warming legislation. Indiana relies on coal for more than 95 percent of its electricity and ranks in the top 10 producer states.

Lawmakers like Bayh must juggle the needs of their constituents with an awareness that coal also is a major contributor of greenhouse gases to the atmosphere, constituting about a third of U.S. emissions.

The split between coal consumers and producers is the most obvious division in coal country, although some states, like West Virginia, fall into both categories. The issues facing these two worlds of coal in a carbon-constrained world are different.

Coal is so abundant in the United States -- the Energy Information Administration estimates a more than 200-year supply -- that it has historically been much cheaper than fuels like natural gas.

That means that consumer states like Missouri, which gets more than 85 percent of its power from coal, but produces little of it, have enjoyed electricity prices lower than the national average for years. Many coal backers argue that a climate bill means electricity spikes as a result. Environmentalists counter that analyses from the U.S. EPA show otherwise.

States that mine coal and bring hundreds of tons of it to market, by contrast, are the biggest coal employers.

The coal-mining industry, which includes some 134,000 workers nationally, is one of the most heavily unionized in the country. That gives groups like the United Mine Workers of America, a labor union, significant clout in producer states like Pennsylvania.

Producer and consumer states with some overlap

"Union support can give lawmakers in tight races decisive leads by delivering large voting blocs. Coal-friendly policies have the potential to unlock political support from organized laborers, all the way from the mine shaft to the smokestack," said Book in a recent analysis from ClearView.

Luke Popovich, a spokesman at the National Mining Association, said "high producer" states, with many coal jobs at stake, make more reliable friends for coal than "high consumer" states, where benefits of coal are hidden and dispersed among households.

Pennsylvania happens to be the home of one of the fence-sitters on a climate bill, Sen. Arlen Specter (D-Pa.), who is in a tight 2010 re-election race.

Specter and other coal-state lawmakers like Sen. Robert Byrd (D-W.Va.) helped draft new language in the most recent version of a Senate climate bill giving a financial boost for technology that envisions capturing carbon dioxide at coal plants and storing the gas underground.

Such carbon capture and sequestration, or CCS, technology is still in the testing phase, and some predict full commercialization could be at least a decade away, if it becomes viable at all.

The new text added by the chairwoman of the Senate Environment and Public Works Committee, Sen. Barbara Boxer (D-Calif.), to the Senate bill provides "advance payments" for potential developers of CCS. That came on top of the billions of dollars provided for the technology in an earlier draft of the legislation, which is co-sponsored by Sen. John Kerry (D-Mass.).

The House passed a global warming bill in June, but the Senate Environment and Public Works Committee is not expected to move its version until this week at the earliest. Both plans would establish a mandatory cap on emissions tied to a trading system in which businesses could buy and sell allowances to meet required cuts.

Moving senators off their 'fence' will be hard

Despite the boost for coal from Boxer, Byrd remains firmly on the fence.

"As I have said before, we have a long way to go on this legislation. Many issues have yet to be addressed. There is still a tough road ahead. But I remain dedicated to helping craft a new energy policy that will ensure that America finds cleaner, more efficient ways to use her abundant, affordable coal resources for many, many years to come. However, I will actively oppose any bill that would harm the workers, families, industries, or our resource-based economy in West Virginia," Byrd said in a statement after Boxer released the chairman's mark.

The reason why carbon-capture funding alone may not be enough for many coal-state lawmakers, analysts say, is that the Kerry-Boxer plan contains a tougher emissions cut -- 20 percent -- for the year 2020 than the 17 percent level called for in legislation passed in the House.

Much of the coal industry argues that CCS won't be ready by 2020 for coal to maintain its dominance in the fuel mix.

"Without the widespread availability of CCS technologies for both new and retrofit applications by 2020, a significant portion of these emission reductions likely would be achieved by switching utilities from coal to natural gas and, to a lesser extent, to renewable energy sources," said Eugene Trisko of the United Mine Workers of America in testimony in front of the Senate Environment and Public Works Committee last week.

In recent days, coal-state senators who also hold chairmanships on Senate committees with jurisdiction over the bill, like Sens. Max Baucus (D-Mont.) and Jay Rockefeller (D-W.Va.), expressed concern about the current emission targets (E&E Daily, Oct. 30). In an interview last week, Sen. Byron Dorgan (D-N.D.) did not mention 2020 specifically but said that the "targets and timetables" in an eventual bill need alteration.

Environmentalists have vowed to keep the higher target, since the economic recession already has cut emissions dramatically.

Dorgan, along with Bayh, Specter and Sen. Blanche Lincoln (D-Ark.) stand among the top four Democratic recipients of coal mining money in the Senate for the 2010 election cycle, according to the Center for Responsive Politics. All are considered potential swing votes on climate legislation.

East-West divisions further complicate matters

But there is another dynamic at play that could make it difficult for Democratic leaders to offer one large package that pacifies all of coal country. In addition to the differences between consumer and producer states, there is a division between the East and West when it comes to the resource.

Coal from Eastern mountain states and the Rust Belt tends to hold more sulfur.

That feature put those regions at a disadvantage after the congressional crackdown in the 1990s on acid rain, which is caused mainly by sulfur dioxide emissions. High-sulfur states like West Virginia turned to mountaintop-removal mining as a cheaper way to extract coal under the new standards.

But mountaintop mining has been under heavy attack from environmentalists because of its damage to surrounding waterways and landscapes. That dynamic puts senators like Jay Rockefeller (D-W.Va.) in a tough place with a climate bill, according to Book.

"I think Rockefeller is going to be pushing for some sort of intervention on mountain mining, and it's not clear he'll get it," Book said. "He'll probably be presented with the choice between voting against [incentives for] clean coal or voting for a bill that doesn't protect mountaintop mining."

At the same time, coal extraction in states like Wyoming tends to be cheaper than in the East, said David Victor, a professor of law at Stanford University.

"The underlying fundamentals in the two regions are pointing in opposite directions -- the Western industry has been ascendant, while the Eastern industry is flagging," Victor said.

Small rural electric co-ops have big 'clout'

Book added that the "new" coal in the West and the Illinois Basin is better suited for CCS than much of the coal in the East.

That means that lawmakers like Sen. Max Baucus (D-Mont.) may not want to align with Democrats from the Eastern part of coal country, Book said. In other words, what benefits one type of coal and CCS development may come at the expense of coal from elsewhere.

At the same time, Montana is largely a rural state that gets some of its power from rural electric cooperatives that burn a lot of coal. Rural co-ops, along with small Midwestern utilities, protested strongly during the House debate about how their coal-dependent consumers would be hit hard with climate legislation.

"They have a lot of clout here," Tom Power, a professor of economics at the University of Montana, said about rural co-ops in his state.

In an interview, Glenn English, the head of the National Rural Electric Cooperative Association, said the "basis of a deal" on climate change would revolve around helping coal consumers weatherize their homes to cut costs. He also said he wants the Federal Energy Regulatory Commission to gain authority to site electrical transmission lines to bring more renewable power online.

Other Midwestern utilities are pushing for more free allowances in a climate bill to cover what they say will be high costs for states with historically low electricity prices because of heavy coal usage.

Will more coal concessions tip the scale? Which way?

However, the ultimate fate of climate legislation in Congress may not depend on the wheeling and dealing on Capitol Hill, but on actions by other countries. China gets 81 percent of its power from coal and is now the biggest emitter of greenhouse gases globally. India relies on the fossil fuel for 68 percent of its electricity, according to the World Coal Institute.

For that reason, lawmakers like Sen. George Voinovich (R-Ohio) are arguing that the United States should not take action on the issue until the completion of December negotiations in Copenhagen to forge a post-2012 international climate pact. In a recent interview, he said unilateral action by the United States with a climate bill could lead to a competitive advantage for China.

Democratic leaders also have a difficult balancing act in trying to offer concessions to coal-state lawmakers without causing the liberal wing of the party to flee along with environmental groups.

David Hamilton, director of the Sierra Club's global warming and energy program, said that his organization would not bolt over the new incentives for CCS but suggested that "there is a line" on coal that some senators will not cross if much more is given away to the industry.

He criticized the new CCS standards offered by Boxer as "picking winners and losers" on energy. The Sierra Club has been fighting both mountaintop-removal mining and coal plant construction in court.

"The more the coal-state senators try to preserve every percentage point of their market share," Hamilton said, "the harder it's going to be to get a deal."

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