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September 19, 2014

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letter from washington:

In its coal decision, NV Energy bows to economic reality

Image

Sam Morris

A Union Pacific train unloads its coal Friday, Dec. 10, 1999 at Nevada Power Company’s Reid Gardner power station near Moapa.

WASHINGTON -- NV Energy earned some accolades recently by announcing a plan to kick the coal habit and wean its electrical portfolio off coal-fired power plants.

Other states might start following suit, but don’t necessarily count that as a credit to Nevada’s example. Regardless of Congress’ foundering attempts to bring up comprehensive energy legislation, experts from both sides of the political spectrum see a future in which regulations and market forces will start pricing such plants out of the market.

“President (Barack) Obama made it clear in his State of the Union address that if Congress fails to act, he will,” said Daniel Weiss, an energy expert with the Center for American Progress, a progressive think tank in Washington, D.C. “Now that doesn’t mean that he’s going to issue carbon standards for power plants tomorrow ... but it’s not unreasonable to think that if the EPA develops carbon pollution standards for existing power plants, they will probably be finalized as soon as 2015.”

In its announcement, NV Energy indicated it would begin shutting down the coal-fired power plants at Reid-Gardner in 2014 with plans to complete that operation by 2017. The utility would then move to shut down its remaining coal plants by 2025.

In other parts of the country — Georgia, Pennsylvania and West Virginia — other coal closures are underway.

Pro-coal actors largely blame the trend on what they say are too-stringent Environmental Protection Agency regulations, such as the Clean Air Act, the Mercury and Air Toxics Standards, rules on ozone depletion, and a contested rule on cross-state air pollution.

Some of those rules predate Obama.

But others were designed by Gina McCarthy, the chief administrator for the EPA’s air pollution branch — and a candidate to become head of the EPA. If she passes congressional muster, coal’s supporters are bracing for more of a squeeze to the industry soon.

“I think the agency’s plan is to really throw as many of these regulations at the wall as they can and see which ones can stick,” said Nicolas Loris, an energy economist at the Heritage Foundation, a conservative think tank in Washington, D.C. “I think it’s going to be very difficult for coal production to stay in business with the regulations that are in place and the ones that are coming online.”

But federal regulations aren’t the only element affecting the efficiency of manufacturing electricity via coal-fired plants. So, too, are state regulations and the affordability of alternatives.

In the case of NV Energy’s announcement, and across the country, power providers are looking most closely at natural gas as a coal alternative. As a fuel source, it is projected as cheaper, more compact to produce and less vulnerable to inclement weather than pure solar or wind energy production. But most importantly, it is the one area of the energy fuels portfolio in which Congress could make significant strides in the near future.

Senate Energy Committee Chairman Ron Wyden, D-Ore., and ranking member Lisa Murkowski, R-Alaska, have started discussions about legislation to address fracking, production and promotion of natural gas use. The preference among Democrats is to limit exports to keep domestic prices low. The tactic would have the side effect of making natural gas the most viable cheap coal alternative.

Of course, none of these expected changes — natural gas legislation or updated EPA regulations — will come without a fight, either in the political arena or in the courts.

But with proponents and opponents of coal fairly convinced of the trajectory, NV Energy’s decision may not have been so prescient as simply prudent and practical for a state utility with a relatively small group of coal-fired power plants to worry about.

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  1. The "Heritage Foundation is a Conservative Think Tank" - Really? Please, since Jim Demint quit as Senator from South Carolina to run this organization, it's become a wing of the Ultra Right Wing Republican Tea Party.

    You know the one supported by Gullible Old White Seniors and financed by Billionaires to privatize Medicare and Social Security so the Seniors have "security". Typical Double Speak introduced by Ronald Reagan.

  2. Why is this Democrat administration from Obama to Reid so determined to do everything they can to implement plans to increase our burden through taxes, gas prices, or utility rates? Are they intentionally trying to stop economic growth or do they really believe that their actions are smart and helpful?

  3. The Sun writes: "In its coal decision, NV Energy bows to economic reality". This statement is false and should read: "In its coal decision, NV Energy bows to political reality". This decision had nothing do do with a free market economy, it had everything to do with the political pressures being forced on the economy, today.

  4. As more people are added to the Obama Economy(the people the Lib's depend on to stay in power) their fixed income will be stretched even thinner to keep Uncle Obama and Uncle Reid happy and wealthy

  5. I know coal is an energy source that is plentiful in the US. I think it is great to have natural gas coming online, but in terms of national securuity forcing the coal industry out of existance does not make any sense. The Obama administration seems fine dumping millions in high risk and unprofitable solar yet ignores a resource such as coal. Some of that alternative energy's money should be going to R& D for cleaner ways to burn coal.

  6. Scrubbing SO2 out of coal exhaust is expensive. The equipment is expensive, and the resultant sludge is expensive to dispose of. If the cost of running a coal plant with highly efficient scrubbers is no longer economical, I have no problem shutting it down.

    SO2 in the atmosphere is harmful. Take SO2 from a coal plant, some water vapor (H2O), hit it with some sunlight and it becomes H2SO4. For those of you who failed chemistry, this is also known as sulfuric acid. It falls back down to earth as "acid rain", which damages property, poisons water sources and soil, and is pretty nasty for humans as well.

    Personally, I don't buy products that are harmful to me just because they are cheaper. I question the wisdom of those who do.

  7. "In its coal decision, NV Energy bows to economic reality"

    ... an economic reality that exists because it is being manufactured by *political* decisions.

    There is no way that solar and so-called "clean" energy sources can today supplant the energy needs of current use. Better ramp up some modern nuclear plants, and soon.

  8. One thing that I feel is over looked is why are we not using more Hydroelectric plants in this country.

    We have 1000's of rivers and you don't have to damn them up for Hydroelectric. You can have a flow through system that keeps the water running.

    The cost of power is one of the lowest (2 to 5 Cents per kwh.) and they create little to no waste or pollution.

  9. The economic reality here is that NV Energy continues to gain ever increasing profits at the expense of consumers, the most blatant example being the rate increase to allow them to recoup lost profits because we save too much energy.

    I generally want a domestic free market, but I do not like state sanctioned monopolies. I am beginning to think that have utilities be non-profit co-ops unless there is in fact a competitive market in place might make sense.

    With the mandated change to more expensive, "clean" energy sources taking place, we can only expect our rates to go higher still. Unfortunately, we consumers have no effective means to bring pressure to bear to keep them as low as possible here in Nevada.

  10. The general question has been raised by several writers herein that asks: Why does it seem that Obama and Harry Ried are trying to destroy the economy, cause more unemployment, follow political ideology rather than business logic, etc. - by erasing coal, gasoline, etc., from being part of our energy resource pool.

    All this is happening at "light-speed" - at the cost of $Billions of dollars wasted on experimental replacements (Solyndra, et al) - all intended to provide CHANGE (...we can believe in?) in which energy resources are available for use.

    Yet this "forced march" will NOT produced the desired outcome in the short term, and it will only hurt the economy further - because we are NOT READY to make such a "en mass" change in energy technology. There are too many considerations and "bases to cover" before such changes can be made nation-wide.

    I am not saying "don't change anything"; I simply want to ensure any change that is offered, is something is workable.

    Coal is cheap (and yes, dirty), but I think we could wait a few years before we DIVE INTO CHANGE that we are not prepared for.

    One huge failed effort that we have seen is the electric automobile Obama was trying to use to replace the gasoline engine. If in a few years we can develope an alternative to gasoline, so be it. BUT THAT FUEL IS NOT AVAILABLE NOW.

    So, we still need gasoline for millions of cars. And we need coal for manufacturing plants. CHINA is producing over 500 new coal-fired plants, right now - and the "Global Air" that the entire planet breaths will contain the refuse from China's coal plants.

    So, rather than creating an industrial juggernaut, Chnia has produced an air pollution problem of severe magnitude - and no one is stopping them! Further, China's pollution is not even a White House discussion point.

    It appears that what the EPA and the President are doing is trying to "FORCE FEED" Americans with imaginary solutions for energy resources that DO NOT EXIST.

    So while we need to work to get rid of "dirty energy resources" - we also have to live, go to work, and subsist.

    Bottom line: This coal issue is all about politics and ideology; NOT about what we should use a coal or gasoline alternative.

    It is about the president and the EPA's collective ideology - and a political, non-science, and illogical opinion - as to how this country should proceed.

    Of course, White House decisions affect the lives of 340 million people. But their aloof thinking is: "DAMN THE ECONOMY, FULL SPEED AHEAD!" - and Washington could care less about who they leave in their wake.

    A New World Order is coming - and it ain't gonna be pretty.