Coal:

Clean coal electricity group chief explains how President-elect can deliver on clean energy

During his first few months in office, President-elect Barack Obama will have to make a key decision relating to the future of the Department of Energy's FutureGen project. How will that decision affect the deployment of clean coal? Will Obama deliver on his promise to expand clean coal? During today's OnPoint, Steve Miller, CEO of the American Coalition for Clean Coal Electricity, discusses the future of carbon capture and storage funding, the impact of the economic crisis on investments, and what a change in administrations will mean for the expansion of clean coal.

Transcript

Monica Trauzzi: Welcome to the show. I'm Monica Trauzzi. With us today is Steve Miller, CEO of the American Coalition for Clean Coal Electricity. Steve, it's nice to have you on the show.

Steve Miller: Thank you so much for having me back.

Monica Trauzzi: President-elect Obama spoke heavily about clean-coal technology on the campaign trail. How does he deliver on his campaign promise to develop and deploy this technology? What specifically are you looking for him to do in his first year in office?

Steve Miller: Yeah, I think the president and the Congress are really wrestling with three strategic imperatives right now for the country and it's very difficult with this overlay of economic dislocation going on. Number one, they have to stimulate the economy. So how does energy fit into that stimulus package? And we've seen in the past that some of the work in retrofitting power plants, some of the biggest construction projects anywhere in the country. So, that's one area of that they have to do immediately. Secondly, of course, they're trying to move the country to greater energy security. And third, to try to meet the environmental ethic of the country, particularly the challenge of climate change. So, this administration, under very challenging economic times, trying to balance all three of those strategic imperatives and sort out some of the coal issues with that as well.

Monica Trauzzi: Can we afford to be pouring our money into carbon capture and storage technology right now when it's not going to yield us any benefits for 10 or 15 years?

Steve Miller: We don't have any choice, we have to do this and I know that it's a period of sacrifice for the country and real challenges here in terms of priorities, but the United States has an opportunity to lead here. It's important that we stay committed to our coal-based fleet here. It allows us to have reliable, affordable electricity. It allows us to have well-paying jobs and keep energy prices low, which is good for the economy here. And in any type of investment we make in business, in life, in education, whatever it may be, we don't get always immediate results. But this is a long-term commitment, that it will be necessary in a private/public partnership in order to fund carbon storage and technologies here. And the United States will have, if we take up this cause correctly and in a timely way, the ability to stimulate the economy, create good green jobs here, not just in the renewables business, but in the coal-fueled electricity world and in the fossil-fueled world as well. And, thereby, show international leadership as well. So it's a commitment, an investment that the nation must make right now.

Monica Trauzzi: And early on the Obama administration is going to have an important decision to make regarding FutureGen. That decision is going to come in March I believe. Do you believe that the original FutureGen project should be looked at again and maybe considered? There's also talk about a NowGen type of project which would demonstrate existing partial carbon capture next to a CCS demonstration plant. Is that a good option?

Steve Miller: Yeah, ACE's position is that there will be no silver bullet here for climate change challenges. And the term we use is silver buckshot. So we're going to need a number of projects. One of those we believe is to reinstitute the FutureGen project in Illinois. Now, we are well down the track. A lot of the environmental impact statements have been done. Let's go back and revive FutureGen in Illinois and make that one of the initial projects. President-elect Obama has mentioned five one-of-a-kind carbon capture and storage projects that his administration would be willing to fund. We hope that's one of them, but we need to be testing different types of technologies in different parts of the country. So we're encouraged about his commitment. We were very involved during the campaign with our citizen army, with our folks around the United States. We actually have a video, a collage of the number of times that he spoke about the importance of investing in clean-coal technology. So we believe that he learned more about it, saw how important it was to the country during the campaign and that he will stay committed to funding clean coal technology projects, particularly carbon capture and storage. And FutureGen is a great place to start.

Monica Trauzzi: By demonstrating a technology that already exists, and I'm talking about doing it the NowGen way, might it seem like less of a leap for the coal industry than if you're already able to capture say 60 percent, 90 percent is going to seem like less of a hurdle.

Steve Miller: Right, and we'll come to these things incrementally and anyone who tells you that they know exactly how the carbon capture and storage technologies are all going to work I think is not being fully aware of the complexities of this. So we, as an organization, don't have one particular technology, one particular project siting arrangement that we think is absolutely preferential over another. We need to get about as quickly as possible testing multiple technologies in multiple places, as we know other countries are doing. The Chinese are doing this as well right now. So we don't have one particular project or one particular technology that we favor. The goal here is to have a significant enough investment and to get at this as quickly as possible so we can move forward with capturing and storing carbon as quickly as possible.

Monica Trauzzi: Considering the current economic crisis and instability in the markets are investors less likely to take the risks posed through liability issues associated with CCS?

Steve Miller: I think investors have a couple of thresholds here. Number one, will there be a partner that they can count on in terms of public-sector contributions here? We need to have a secure funding stream, a stable funding stream, and a sufficient funding stream from the public sector that investors can count on in terms of a partnership, both the companies, the utilities who would be doing this, and other companies. And also they need this regulatory and legal framework and liability framework that you're referring to. These will not be easy challenges. They are surmountable. We can do this, but we are going to need to quickly put in place the legal and liability framework so that investors feel like they can receive a reasonable return on their investment in this area.

Monica Trauzzi: The question is what do we do in the interim until we have some form of certainty through regulation? Do we continue to build power plants that pollute? What can the coal industry be doing in the interim in preparation for some type of carbon legislation? Can they be implementing the technology that currently exists?

Steve Miller: We believe it's important to stay committed to the latest generation of coal plants. Some of these are being built in a freestanding kind of way. Some are being built in a commitment to retiring older generation where that makes sense as well. So we need to keep building coal plants. The country needs to have this commitment to our coal fleet in order to send the right signals to the investment community. If we back away from our industry now it will be harder to get investors in commitments to new technology. So we believe that keeping the course in regards to plant siting of existent plants is important. But a second thing that the industry has to do and has been willing to do and will have to do more of, even in these uncertain economic times, is make investments to match those kinds of government incentives and investments to move this ahead quickly.

Monica Trauzzi: How quickly are you expecting to see some form of carbon legislation? And does the economic crisis impact the speed at which Congress will be working on it?

Steve Miller: I think that it does, but, again, this will come in kind of chunks and bits and pieces. So the new administration is going to make decisions about an endangerment finding as a continuation of the Massachusetts case before the Supreme Court that we can expect to happen soon. The administration and the Congress will make decisions about funding carbon capture and storage as part of the appropriations process or perhaps along the lines that Congressman Boucher has recommended in his legislation as a wires charge. The administration is going to have to make a decision about its position for the negotiating team going to Copenhagen later on in 2009, in December, but there will be interim meetings before then. So there will be a number of activities in the climate area and related to that, some people lump in renewable energy standards with climate policy. I think there will be a continued debate in Congress early in the 2009 session about a federal renewable energy standard, so all of those things will happen in various bits and pieces and in some kind of sequence. Whether we get to a larger, more omnibus package of climate legislation in 2009 I think is less likely, more likely in 2010 or 2011.

Monica Trauzzi: Final question here. All eyes are on the transition and Obama's choice for energy secretary is certainly going to impact the coal industry, the utility sector quite heavily. Anyone you're pulling for or any names you want to toss out there for possibilities for energy secretary?

Steve Miller: Yeah, I learned a lot time ago not to get into the game of trying to pick new administration officials or chairs of congressional committees. The thing that we hope and we are cautiously optimistic will take place here is that the Obama administration, from the president on down, and the Congress, will recognize that these kinds of policy decisions they're going to make will only work politically and will only work effectively in this country if they truly do integrate our environmental ethic, including carbon capture and storage and dealing with climate change number one. But combine that with economic prosperity and stimulating the economy and enhancing America's energy security. As long as the Cabinet members and the folks in Congress recognize the three sides of that triangle, we can have a workable energy and environmental policy for this country. If we focus solely on one, or mostly on one, it will be difficult politically and the ultimate policy product won't be what it should be.

Monica Trauzzi: OK, we're going to end it right there. Thanks for coming on the show.

Steve Miller: Thank you so much.

Monica Trauzzi: And thanks for watching. We'll see you back here tomorrow.

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