Making Sense of the "Coal Rush"

The Consequences of Expanding America's Dependence on Coal
Released by: Environment Maryland Research and Policy Center

Executive Summary

Energy companies have proposed building a fleet of new coal-fired power plants across America. As of June 2006, power producers have approximately 150 new coal-fired plants on the drawing board, representing a $137 billion investment and the capacity to supply power to 96 million homes.

If energy companies succeed in building even a fraction of these new power plants, it would have major impacts on America’s environment and economy. Further, this “coal rush” would consume investment dollars that could otherwise promote more sustainable energy sources.

Fortunately, alternatives exist that would reduce or eliminate the need for new coal-fired power plants. By funneling investment instead into improvements in energy efficiency and expansion of renewable energy, the U.S. can avoid the potential impacts of the “coal rush” and improve the economy, the environment and public health.

The “coal rush” would increase U.S. global warming pollution at a time when aggressive action is needed to reduce emissions.

• To avoid the worst consequences of global warming, scientists believe that the U.S. needs to stabilize emissions within a decade, begin reducing them soon thereafter, and cut global warming pollution by as much as 80 percent by the middle of this century. New coal-fired power plants will take us in the wrong direction.

• If all of the proposed plants are built, they would increase U.S. carbon dioxide pollution from electricity generation by more than 25 percent above 2004 levels. This would be equivalent to a 10 percent increase in total U.S. emissions and a 2.4 percent increase in world emissions.

• The vast majority of proposed plants use traditional coal-burning technology, which emits massive amounts of carbon dioxide. Only 16 percent of the proposed plants would use coal gasification technology and could someday be equipped to capture and store carbon dioxide. Even these plants would require costly future upgrades to avoid large releases of global
warming pollutants.

Increasing America’s dependence on coal carries significant economic risks for power generating companies, their shareholders, utility ratepayers, and the economy as a whole.

• The growing urgency of addressing global warming makes limits on carbon dioxide pollution a virtual certainty for the future. As these limits are set, coal-fired power plants will decline in value compared to less-polluting resources. Additionally, companies or ratepayers may be forced to pay the significant cost of retrofitting the new plants to capture and store carbon dioxide.

• Companies that build coal-fired power plants today knowingly and significantly contribute to the public health, environmental and property damage that will result from global warming. Such companies face potential legal risks, similar to the lawsuits filed against the tobacco industry in the last decade.

• The new coal-fired power plants, if built, will strain the U.S.’s ability to extract and deliver enough coal to keep them running. U.S. coal demand would increase by over 30 percent if all the plants are built, requiring additional mines and expanded railroad infrastructure to move the coal around the country. Mining additional coal would damage America’s land and water.

• According to the U.S. Department of Energy, currently operational coal mines have enough recoverable coal to supply the power industry for only 18 years at current levels of demand (and fewer years if demand increases).

• While the U.S. has enough coal supplies to sustain current levels of consumption for nearly 200 years, extraction of that coal is likely to damage wide areas of land now used for agriculture, housing and recreation, while fouling water supplies and harming wildlife.

• Between 1985 and 2001, “mountaintop removal” coal mining in Appalachia cut down more than 7 percent of the region’s forests and buried more than 1,200 miles of streams.

• In 2004, coal mines across the U.S. reported the release of more than 13 million pounds of toxic chemicals, including over 300,000 pounds dumped directly into streams and rivers. The “coal rush” would increase health-threatening air pollution.

If all of the planned coal-fired power plants are built, they would increase total pollution from power plants and other industrial facilities on the order of 1 to 3 percent, including:

• 120,000 tons per year of sulfur dioxide, a major ingredient in fine particle pollution, linked to premature death and respiratory and cardiovascular disease;

• 240,000 tons per year of nitrogen dioxide, a major ingredient in the photochemical smog that plagues many cities across the U.S. on summer days; and

• 3 tons per year of mercury, a neurological toxicant that contaminates fish in rivers, lakes and the oceans.

The “coal rush” would consume investment dollars that could be used to promote safe and sustainable energy sources, including energy efficiency and renewable energy.

• Building all of the coal-fired power plants on the drawing board would require capital investment of 6 Making Sense of the “Coal Rush” $137 billion. On top of that, energy companies would have to spend more than $100 billion to operate, maintain and fuel the plants and build transmission lines.

• If that $137 billion in capital were instead directed toward energy efficiency, it could reduce electricity demand in 2025 by about 19 percent compared to a business-as-usual forecast (1 million GWh/year), without additional investment for transmission and distribution. In other words, energy efficiency could completely alleviate the need to build any new coal-fired power plants—and do so for less cost and with zero global warming pollution.

• Directed instead toward renewable energy, that $137 billion could develop 110 GW of the best wind resources in the western U.S. with a cost of electricity comparable to conventional coal. Alternatively, the money could build over 50 GW of promising zeroemission solar technologies like concentrating solar thermal power plants—predicted to provide electricity at prices competitive with coal within the next 10 years, with the potential to supply energy day or night using thermal storage.

• Wind, solar, tidal, geothermal and biomass resources—coupled with energy-saving renewable technologies such as passive solar heating and lighting, solar hot water heating and geothermal heat pumps—could provide a large and growing share of America’s energy. A consistent emphasis on renewables in public policy and in research and development funding could bring many of these technologies into the mainstream—but not if America’s investment dollars are staked on coal.

Citizens and government should act to stop the “coal rush” and instead pursue a cleaner, more sustainable path to satisfying America’s energy needs.

• States and the U.S. as a whole should impose strong caps on global warming pollution from power plants at levels that are sufficient to minimize human interference with the global climate— on the order of 80 percent below 1990 levels by mid-century.

States and the federal government should not allow any new coal facility to be built, unless:

• All the costs of coal-fired power plants—including the societal cost of global warming and the probable cost of additional pollution control requirements—are fully considered when utility investment decisions are made;

• Gasified coal with carbon storage is demonstrated to be the least-cost way to reduce global warming pollution consistent with climate stabilization goals, compared to other clean resources that could satisfy or reduce energy demand, such as renewable energy and energy efficiency; and

• Any new gasified coal plants with carbon storage are used to replace old, inefficient coal-fired power plants, not augment them.

• Public funds should not be used to support the construction of any coal-fired power plants.

• Leaders at all levels of government should take aggressive action to encourage the development of cleaner alternatives to coal-fired power plants, particularly measures to improve energy efficiency and encourage the development of clean renewable resources.