Bush Sends Mixed Message on Clean Energy

President Bush vows in his State of the Union speech to increase funding to develop coal-fired power plants that produce no polluting emissions. But the federal government is currently undermining efforts by states to require power companies to use an existing "green" technology that's already available.

MELISSA BLOCK, host:

In his State of the Union address, President Bush said technology is the best way to wean America from foreign oil. And new technology is also the president's solution for curbing the industrial greenhouse gases that contribute to global warning. There is, in fact, an existing technology that could drastically reduce the greenhouse gases that come from coal-fired power plants. But, as NPR's Christopher Joyce reports, the federal government and some power companies are discouraging its use.

CHRISTOPHER JOYCE reporting:

For years, coal has been the ugly stepchild of the electricity business. Utilities preferred clean and abundant natural gas for their new power plants. Then gas prices shot up, so the nation's utilities are now looking to coal to fuel some 150 proposed power plants. There's a race on.

Mr. JOHN THOMPSON (Clean Air Task Force): We're in a danger of sort of a race to the gutter.

JOYCE: John Thompson works for the Clean Air Task Force, an environmental group. He says the nation can't overlook billions of tons of fuel right here in our backyards, but he fears new plants will use old-fashioned technology to burn coal.

Mr. THOMPSON: If those plants are built with the kind of technology that we've seen in this country for the last 50 years, we're going to have a very difficult time, if not an impossible time, addressing global warming.

JOYCE: Burning coal produces carbon dioxide, the main greenhouse gas. But it's possible to chemically convert coal to synthetic gas instead. The gas runs a turbine to make electricity, while the carbon dioxide can be captured instead of going up the smokestack. It's called coal gasification. There are many gasification plants around the world and several in the U.S. Many state governments are now asking power companies to consider using this technology in their new plants. But the U.S. Environmental Protection Agency has written a policy letter saying, don't bother. We don't think it's required by law. Thompson says that's wrong.

Mr. THOMPSON: It's a sad letter and harms the Clean Air Act.

JOYCE: The federal Clean Air Act requires power companies to seek out and use the best available technology to control pollution. Thompson says gasification is available.

Mr. THOMPSON: The legislative history was quite clear that gasification was suppose to be considered as one option. I think that's unambiguous.

JOYCE: The EPA letter, however, calls gasification an alternative technology, so states can't force power companies to consider it. The letter was sent by the head of EPA's air quality office to an energy consulting firm. Now it's popping up all over the country. In Texas a company wanted to build a new power plant but argued it didn't have to consider gasification. In December, the state's commission on environmental quality agreed, citing the EPA letter. In New Mexico, the state has been arguing for three years with a subsidiary of Peabody Coal Company over gasification. Peabody had proposed a new plant. The state said okay, but give us an analysis of gasification technology as well.

Ms. SANDRA ELY (New Mexico Environment Department): They said that it wasn't a viable technology for the location.

JOYCE: That's Sandra Ely, a senior air quality official with the New Mexico Environment Department.

Ms. ELY: And or assessment was that it is. That it is a commercially available controlled technology that must be evaluated in the analysis.

JOYCE: Ely says after three years of prodding, the state got the analysis and is studying it now. But she says the mixed messages from the federal government don't help the state's efforts to encourage gasification.

Ms. ELY: How is the State of New Mexico or any state going to permit this plant? And are they going to you know push the envelope a little bit, require the companies to at least evaluate the economics of new technology that has better environmental protection. That's where it's at. That's the reality.

JOYCE: That's the reality in Kentucky as well. Environmental groups are battling groups are battling Peabody over another proposed coal plant. The state wanted Peabody to consider gasification, too. But Peabody argued that while gasification "may be proven" it is relatively new and not suitable. Vic Svec, a Peabody Vice President says Peabody likes gasification, but it's not ready yet.

Mr. VIC SVECK (Peabody Vice President): We certainly need generation capacity very quickly over the next five years or so. We think that most gasification right now will require either broad rate pay or pass through, or government subsidies.

JOYCE: Rate pay or pass through, meaning higher electricity bills for consumers. That's a problem for power companies that are optimistic about gasification but are required to provide the cheapest possible electricity. Bill Edmunds is vice president at Pacific Core, which makes electricity for six Western states.

Mr. BILL EDMUNDS (Vice President, Pacific Core): Right now, conventional coal is 10 to 20 percent less expensive, and so we're really put in a bit of a corner to pick a least cost resource.

JOYCE: Edmunds says tax breaks could make gasification cheaper. The federal energy bill passed last year does offer some incentives. And last night President Bush said he wants to spend more money on clean coal. And the federal government is collaborating with industry to build a model gasification plant by 2012.

But gasification supporters say 2012 is too late. States are deciding now what kind of coal technology to build. Supporters fear that without more help from the federal government, gasification will be pushed aside by the more familiar and more polluting technology. And what gets built now will last for decades.

Christopher Joyce, NPR News.

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