08-E Texas Clean Air Cities Coalition (2)

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THE WALL STREET JOURNAL. I As Emission Restrictions Loom~ TXU Bets Big on Coal Continued Ft:tma Ant Page , plants hold ,considerable upside. TXU - big Is on the hOrlz.on. There are proposals given "allowances" -essentially, rights to reduce atmospheric pollution. "CarbQn dI. mines Its own coal In Texas and Is the,' to bulld about two dozen such plants In the pollute-which they could use themselves oxide Is a big game-changer." " nation '5 No. 10 coal Producer. Mr. Wilder U.S. In coming years, perhaps one-quaner or sell to others. TXU's Mr. Wilder declined to be Inter. projects that the new plants eventually of the planned new coal-tired plants. The allowances were Intended to soften Viewed. When he unveiled hJs plant. build- will add $1 billion or more to the compa. Duke Energy, which produces more the blow for companies that had made Invest. Ing plan In May, he dubbed It a "clean ny's annual profits. TXU Is attempting to than half Its power from coal, owns the mentdecls1onswlthoutknow!nglheYwould coal Initiative. " He said It was voluntary raise Sl1 bUllon to fund their construc- Wabash gasification plant and Is consll!- later face antipollution measures-to andwOuldreducebY2O%TXU'semlsslon tlon, and has approached banks, Invest- erlng building a larger one nearby, as "grandfather" them. Overt1rne,thenwnber of regulated pollutants Includlrig sulfur ment funds and industrial customers for well as a nuclear plant In South Carolina. of annual allowances handed out was re- dioxide, nitrogen oxides and mercury, loans and equity Investments. Mr. Wilder Although Ills also planning a new pulver. duced. That drove up their resale value and due to the Installation of more pollution- recently told analysts that TXU Is the IZed-COal-burnlng plant In North Caro- proVIded companies with an Incentive to In. control equipment on older plants. only company that can build so many IIna. the company says It favors federal stall poUution~ntrol equipment. Environmentalists say "clean coal" Is a plants in so short a period of time. greenhouse-gas regulation. Many believe the government eventu- misleading label. The reductions, they say, It is unclear whether the federal gov- One concern about gasification Is that ally will adopt a similar system to control aren't as voluntary as the company claims. ernment will move to limit carbon-mox- It can add $200 milllon or more to the cost carbon-moxide emissions. In late 2004, TXU Is required to reduce its emissions of Ide emissions. President Bush favors vol. of a SI billion coal power plant. But the TXU consultants adVised the company certain pollutants by 2015, and its plan ~tary reductions, as does TXU. But su~ Department of Energy reported that in. against trying to cut such emissions In moves up the timetable to 2010. "I think we port for mandatory reductions is growln stalllng carbon-i1ioxlde controls at pulver. anticipation of federal action. In a writ. should be applauded for It, " says MIke Mc- In Congress. Earlier this year, two sena. Ized-coal-burnlng plants, could' be so ten report, the consultants said that such Call, chief executJve of TXU Wholesale, the ors from New Mexico- Pete Domenlcl, a costly It would wipe out the cost dlfferen. "early actions" could reduce the allow- unit that runs TXU's generatJon business. Republican who heads the Energy and tlaI between the two technologies. aIlces that TXU receives In the future. Critics fault TXU for simultaneously Natural Resources committee, and Je Bechtel Corp. and General Electric Co. "The argument In support of grandfa. building so many coal.burnlng plants, Bingaman, the COmmittee's ranking are working together to design a gaslflca. therlng breaks down when you're talking each with a,50-year life expectancy. A mocrat-issued a white paper saying tlon power plant that would cost about as about plants being built to squeeze In more responsible approach, some say, the threat of global Warming Is real and much to build as the type of plant that TXU under the wire," says Bruce Biewald, would be to build only a few plants now, action must be taken. The paper said a intends to build. "We think the technology preSident of Synapse Energy Economics delaying the rest to take advantage of program for regulating carbon-i1ioxide is proven," says Bruce Morton, head ofthe Inc., a Cambridge, Mass., consulting ImproVIng carbon-i1ioxlde reduction tech- emissions was needed, and it solicited project for Bechtel, a global engineering finn that often works for state utlllty com- nology. TXU says bull ng a1111 plants at suggestions from the power Industry. firm based In San Francisco. missions. "It's not Intended for guys that lnce wil -reduce th st of each one. In its tten~re ns, TXU d It . During a recent meeting with ana. are adding to the problem because In s public arances, Mr. Wilder opposes egu, latlon be use would Iysts, Mr. Wilder said TXU examined gas- they've got their heads in the sand.. m talns th ore power generation is "stunt conomjcr' gro h" a because Iflcation and concluded that the technol. Some companies think allowances enUy needed. At TXU's annUal mt:et. "the ouldJlot be y re nvtronmen. ogy wasn't sufficiently proven. "It's a should be doled out in a way that rewards :ng on May 19 he dI ayed a ChlW'f on tal benefits:" Th U.S. should take no gleam In someone's eye," he said. He companies for early, voluntary reduc. nfant mo ty, ng that ~trles action on mandatory carbon-dioxIde re- sald it would be financially risky for the tions. In 2002 the state of CalifOrnla cre- vlth hi per-c ta electri~ usage ,ductlons, TXU wrote, "unless all nations company to rely on the technology In Its ated an organization called the Callfor. lave lower ciden~e 0 arly death : adopt similar programs." current building program. nia Climate Action Registry to document han coun s with Ii electricity. He' TXU executives contend that the cur. Other TXU executives say they are and verify reductions of several green. rgued ' at Texas' el ctrlcity surplus is rent Congress is unlikely to act. "It's eas- interested In gasification down the road, house gases by companIes and public literally melting away" and that the ier to stop a blll than pass a blll," says but they want to own the technology. Mr. agencies. The group's goal is to secure tate needs TXU's new plants to buttress TXU's Mr. McCall. "It will only take 40 McCall, who runs the generation unit, credit for companies that take early ac- :s standard of liVing. senators to block carbon regulation." says the'firm is in talks with an unidenll. tion. Energy producers such as PG&E "We know what we do is a valuable There are ways to make electricity fled vendor about a possible gasification Corp., Mlrant Corp., BP PLC and the Los ling to society," he told shareholders. with coal that make It possible to sepa- design. "We're trying to do it In a proprl. Angeles Department of Water and Power r\nd pan of the debate of this new build rate out the carbon dioxide. A process etary way," he says. are participants. rogram that we have... with some of our called gasification is one way. Coal is For now, gasification plants are being Some states,including Washington, Or. lponents...is {that) you have to look at first converted Into a combustible gas, planned mostly In states that are trying to egon, California, and Vennont, are factor. Ie whole system of nefits and co to then that gas is burned to make electric. limit carbon-i1loxlde emissions, and In ing In the environmental aspects of pro- 1C,~ety, e's no form of ele ricUy ity. Gasification otters two advantagt:.S those where utility-rate regulations make posed new plants when deciding what to da at c generat without over traditional coal Incineration. When It feasible for builders to recoup their authorize. Colorado and Wyoming, big socie arm.. the coal Is converted to a gas, many pol. costs. Such plants aren't going-to Texas, coal.productng states, are pushJng gasifi. Mr. WiI er'sstancefits slmageasan lutants are left behind and don't go up which deregulated Its electricity market cation projects. Seven Northeastern and )Qoclast who Is determined to transform the smokestack. And it is easier to cap- more extensively than many other states. Midwestern states agreed last year to cre- W from a stodgy utility company into a ture carbon dioxide, whJch can then be TXU'sdecislon to bulldpulverlzed-coal ate their own regional greenhouse-gas re- fhly profitable one. During hJs first two injected into the ground or ased In some plants-and to build them quickly-may 'ductlon program. " ars on the job, he sold noncore busi. other Industrial process. stem in pan from the way the federal gov.t, Texas gives no special conSideration-;, sses, nearly doubled utJllty rates and Two gasification power plants have ernment has Instituted pollution regula. to gasification plants. Late last year, en outsourced customer serVIce to take been operating near Tampa, Fla., and in tlons in the past. A 1990 federal program to Gov. Rick Perry signed an executive or- vantage to the 1999 deregulation of Tex. Wabash,lnd., for more than adecade, bullt reduce emissions of sultur dioxide, a con. der Instructlng state agencies to expedUe electricity Industry. with big federal subsidies. A new genera- tributor to acid rain, employed a "cap and . applications for new plants, especially "" TXU, lb, pion.", ''''''fi,,' "".'" ""'Wl'" p"'"".... "" lwl,,,, ""'- ",10m. ........ .,n"on.." . ,"",,=,., 1o><?I" m",' ",.. ) M FRIDAY, JULY 21, 2006 '~"-'r'-"-~. -r-~'-.-""-'--"-'-'-"