Coal
China’s premier unveils smog-busting plan to ‘make skies blue again’
Li Keqiang promises to intensify battle against air pollution as he unveils series of measures at annual people’s congress
The Chinese premier, Li Keqiang, has promised to step up his country’s battle against deadly smog, telling an annual political congress: “We will make our skies blue again.”
China’s cities have become synonymous with choking air pollution in recent years, which is blamed for up to 1 million premature deaths a year.
Speaking at the opening of the national people’s congress in Beijing on Sunday, Li admitted his country was facing a grave environmental crisis that had left Chinese citizens desperately hoping for relief.
Li unveiled a series of smog-busting measures including cutting coal use, upgrading coal-fired power plants, slashing vehicle emissions, encouraging the use of clean-energy cars and punishing government officials who ignore environmental crimes or air pollution. “Key sources” of industrial pollutants would be placed under 24-hour online monitoring in an effort to cut emissions.
The premier vowed that levels of PM2.5 would fall “markedly” over the coming year but did not cite a specific target.
“Tackling smog is down to every last one of us, and success depends on action and commitment. As long as the whole of our society keeps trying we will have more and more blue skies with each passing year,” he said.
PM2.5 is a tiny airborne particulate that has been linked to lung cancer, asthma and heart disease.
Despite his buoyant message, Li’s language was more cautious than three years ago when he used the same opening speech to “resolutely declare war on pollution” and warn that smog was “nature’s red light warning against inefficient and blind development”.
There has been public frustration – and protest – against Beijing’s failure to achieve results in its quest to clean up the environment. Tens of thousands of “smog refugees” reportedly fled China’s pollution-stricken north last December as a result of the country’s latest pollution “red alert”.
Wei Song, a Chinese opera singer who attended Li’s speech, said it was inhuman to “achieve development goals by sacrificing the environment” and called for tougher measures against polluters.
“The government should increase the penalties in order to bankrupt the people and the companies responsible. Otherwise, if the punishment is just a little scratch, they will carry on polluting,” said Wei, one of China’s “three tenors”.
Zhang Bawu, a senior Communist party official from Ningxia province, defended China’s “much improved” record on the environment.
He claimed the number of smoggy days in Beijing was now falling thanks to government efforts and he said his province, which is building what could become the biggest solar farm on Earth, was also doing its bit.
Ningxia’s frontline role in a Chinese wind and solar revolution meant 40% of its energy now came from renewable sources, Zhang said.
Additional reporting by Wang Zhen
End derogations for polluting coal plants
Effective regulation of air pollutant emissions from coal-fired power plants could prevent 20,000 premature deaths every year.
http://airclim.org/acidnews/end-derogations-polluting-coal-plants
Establishing and enforcing air pollution standards that are in line with the best available techniques, could reduce the annual number of premature deaths in the EU caused by emissions from coal-fired power plants from 22,900 to 2,600, according to a new study by a coalition of environmental groups.
The report was published in October, ahead of an EU technical committee meeting on the final draft of the large combustion plant (LCP) BREF document. The report called on the Commission and member states to remove derogations and other loopholes from the draft BREF document.
According to the authors of the report, current legislation is failing to deliver its intended health benefits because special exceptions have been granted that allow for emissions that are higher than the agreed minimum requirements of the Industrial Emissions Directive (IED). Currently more than half of the coal power plants in the EU have been granted permissions to pollute beyond the limits set in the IED, with serious implications for public health and the environment. The pollution from these plants alone was responsible for 13,700 premature deaths in 2013, which represented 60 per cent of all coal-related deaths in the EU, the report said.
Through the revision of the LCP BREF document, the EU and member states now have an opportunity to adopt improved environmental performance standards. By agreeing stricter standards and implementing effective emission limits on coal pollution, real progress can be made in improving the health of people across Europe.
The report also called on the Commission and member states to review the directive’s minimum binding emission limit values, and update them to reflect the levels set in the revised LCP BREF. Emission limits and monitoring requirements should reflect what is now technically possible to ensure that EU legislation serves as a driver towards improved environmental performance across the EU.
“The best available techniques we call for in this report are all tried-and-tested and were already being demonstrated under technically and economically viable conditions decades ago. The EU considers itself a world leader on environmental issues but when it comes to coal combustion, decision makers have their heads stuck in a dark cloud!”, says Christian Schaible, Policy Manager on industrial production at the European Environmental Bureau (EEB).
Medical professionals have expressed support for the report; “Air pollution kills,” says Professor Bert Brunekreef of the European Respiratory Society. “Experts in lung health want to see immediate remedial action. Inaction cannot be justified when it is human health and lives that are at stake.”
As there are no techniques that completely eliminate emissions from the burning of coal and with coal power plants responsible for 18 per cent of the EU’s greenhouse gas emissions, the authors of the report conclude that truly lifting Europe’s Dark Cloud will require the complete phase-out of coal power.
“The health of European citizens cannot afford any further delay in enforcing new pollution standards. While the EU’s ultimate goal should be to commit to the complete phase-out of coal and to a transformation pathway to renewable energy and reduced energy consumption, the EU still needs to limit pollution from coal power plants with its deadly and costly impacts on people, health and the environment,” said Joanna Flisowska, Coal Policy Coordinator at CAN Europe.
Christer Ågren
The report “Lifting Europe’s Dark Cloud: How cutting coal saves lives” was produced jointly by the European Environmental Bureau (EEB), the Health and Environment Alliance (HEAL), Climate Action Network (CAN) Europe, WWF and Sandbag, and can be downloaded from: https://drive.google.com/drive/folders/0B9LWbY1olzldSFF6TW1MZjBTUms
EEB press release on the outcome of the 20 October IED forum: http://www.eeb.org/index.cfm/news-events/news/now-the-talking-s-over-it-…
Global carbon intensity falls as coal use declines
China leads the charge for emissions efficiency, but faster progress is needed to meet the Paris climate goals, reports Climate Home
https://www.theguardian.com/environment/2016/nov/01/global-carbon-intensity-falls-as-coal-use-declines
The amount of carbon needed to power the global economy fell to record lows in 2015, as coal consumption in major economies plummeted.
PricewaterhouseCoopers’ (PwC) annual Low Carbon Economy Index report has found that the global carbon intensity (emissions per unit of GDP) fell by 2.8%.
This was more than double the average fall of 1.3% between 2000 and 2014, but far below the 6.5% required to stay within the 2C warming limit set by last year’s Paris agreement.
“What we’ve seen in 2014-15 is a real step change in decarbonisation,” said Jonathan Grant, PwC director of sustainability and climate change.
The result was just 0.1% lower than the previous year, but it occurred against the background of healthy growth, which usually spurs carbon emissions growth.
“There was fairly reasonable economic growth in 2015, which is why we think this result is quite significant,” said Grant.
The biggest driver was a decline in China’s coal consumption, which resulted a 6.4% drop the carbon intensity of the world’s second biggest economy.
A centrally-led shift of the economy to a service-based industry has begun to shut down the vast coal-fuelled steel and cement sectors. For the first time, China led the rankings table for the biggest drop in intensity.
The UK and US were also significant contributors, reducing by 6% and 4.7% respectively, to the overall drop as both governments introduced policies that pushed coal plants out of business. In the UK coal use dropped by 20% for the second year running.
Richard Black, director of the Energy and Climate Intelligence Unit (ECIU), said: “In the week in which the Paris Agreement comes into force, this is very promising news in showing that the dominant paradigm of economic growth is swiftly changing, which makes the Paris targets look more achievable.
“This analysis shows once again that economic growth and carbon emissions are not inextricably linked… Climate science is unequivocal in showing that switching away from coal is an essential first step in keeping climate change within ‘safe’ limits.”
But Grant said coal represented the low-hanging fruit and that economies were enjoying the benefits of relatively painless early decarbonisation.
“Countries are focussing on decarbonising electricity. That means tackling coal power. I think it will get increasingly challenging. Coal is the easiest target for government policy,” he said.
Editorial: No viable future for coal anywhere
http://airclim.org/acidnews/editorial-no-viable-future-coal-anywhere
The UN climate conference in Paris last December decided to limit the temperature increase to well below 2°C/1.5°C above pre-industrial levels. Climate Action Network Europe argues in a new report that “either of these targets would mean eliminating coal completely, and this is what the EU must commit to doing. The Paris Agreement sends a clear signal that there is no viable future for coal anywhere. Coal-fired generation is the quick win: 18% of Europe’s greenhouse gases came from the chimneys of just 280 coal power plants.”
The CAN-E report demands that a full coal phase-out should be one of the EU’s stated goals. This phase-out effort needs to be accompanied by dedicated support for mining regions affected by the transition from coal power and the development of clean energy with 100 per cent renewables.
In 2014, for the first time, renewables produced more electricity than coal in the EU. There are good examples from 2016 that goverments have started phasing out coal:
- In March, Scotland witnessed the end to the coal age that fired its industrial revolution, with the closure of Longannet power station. In the UK nearly half of the coal fleet will close this year.
- In May, the EU authorised Spain and Germany to subsidise the closure of significant parts of their coal sectors. Spain was given the green light to spend €2 billion closing 26 coal mines by 2019 and Germany to subsidise the closure of eight lignite-burning installations between 2016 and 2019, representing 13 per cent of Germany’s lignite-burning capacity.
- In June 2016 the leaders of the G7 countries (UK, USA, Canada, France, Germany, Italy and Japan) and the EU pledged to eliminate “inefficient fossil fuel subsidies” (for coal, oil and gas) by 2025.And in June the Croatian government stopped building a new 400 MW coal power plant.
- These are positive signs, but at the same time the coal industry is strongly promoting further coal use. The International Energy Agency is still running a clean coal centre, even though the IEA’s own policy conclusion is that no new coal plants should be built from 2016 if UN climate targets are to be reached. This summer, Green Budget
Europe criticised the UN Economic Commission Europe (UNECE) for still promoting clean coal policies. Euracoal, which has 34 coal industry members in 20 EU countries, is jointly campaigning with the World Coal Association (WCA) for “a ‘clean coal’ strategy to fight climate change”, relying on what it calls “high-efficiency, low-emissions coal combustion technologies”.
Coal is a climate killer whatever its efficiency is, argues WWF in a new report. The argument that high-efficiency coal-fired power plants are a viable solution for reducing CO2 emissions, the main cause of climate change, is completely discredited by research from Ecofys, among others. It shows that emissions from the global electricity sector need to rapidly reduce and reach close to zero globally by 2050 in order to stay well under 2°C. An even more rapid decline will be needed in order to achieve the commitment taken in Paris to “pursue efforts to limit the temperature increase to 1.5°C above pre-industrial levels”. As a result, it makes clear that in a post-Paris world, there is simply no role for coal anymore. Demand-side management and renewable energies are the solutions we need, says WWF. FOE Germany has proposed a legally binding phase-out plan for coal in Germany and in this issue of Acid News such a phase-out plan is proposed for the EU (page 12). The trend is clear. There is no more time for the EU to continue experiments with different environmental and economic measures to reduce emissions from fossil fuel plant emissions. The EU must now commit to a phase-out plan of all coal power plants, with complete closure before 2030 to avoid catastrophic climate change and to achieve many co-benefits, including the reduction of ill health and mortality for thousands of Europeans from air pollution.
Reinhold Pape
Coal kills across borders
Every coal-fired power station switched off will bring great benefits that reach beyond national borders, for both human health and the climate.
http://airclim.org/acidnews/coal-kills-across-borders
In 2013, air pollutant emissions from coal-fired power stations in the EU were responsible for over 22,900 premature deaths, tens of thousands of cases of ill-health from heart disease to bronchitis, and up to €62.3 billion in health costs. As air pollution travels far beyond national borders, a full coal phase-out in the EU would bring enormous benefits for all citizens across the continent, according to the report “Europe’s Dark Cloud: How coal-burning countries make their neighbours sick”.
Each coal power plant closed will provide major health benefits, not only for those living nearby, but also for those abroad. For example, the planned UK phase-out of coal by 2025 could save up to 2,870 lives every year, of which more than 1,300 in continental Europe. A German phase-out of coal could avoid more than 1,860 premature deaths domestically and almost 2,500 abroad every year.
The analysis of transboundary impacts shows that the five EU countries whose coal power plants do the most harm abroad are: Poland (causing 4,690 premature deaths abroad), Germany (2,490), Romania (1,660), Bulgaria (1,390) and the UK (1,350). It also shows that the countries most heavily impacted by coal pollution from neighbouring countries, in addition to that from their own plants are: Germany (3,630 premature deaths altogether), Italy (1,610), France (1,380), Greece (1,050) and Hungary (700).
The study used data from 257 (of the total of 280) coal power stations that report SO2, NOx and particulate matter (PM) emissions to the European Pollutant Release and Transfer Register (EPRTR) and for which 2013 data was available. It is noticeable that the 30 most polluting coal power plants – the “Toxic 30” – alone were responsible for more than half of the premature deaths and health costs (see figure).
“The report underlines the high costs to health that come with our reliance on coal power generation. It also debunks the myth that coal is a cheap energy source. Clearly, no country on its own can solve the problem of air pollution from energy production,” said Anne Stauffer, Deputy Director of Health and Environment Alliance (HEAL).
Looking at greenhouse gases, the 280 coal plants released 755 million tonnes of CO2, which represents around 18 per cent of the total greenhouse gas emissions in the EU. Almost half of these CO2 emissions (367 million tonnes in 2014) came from the 30 highest-emitting plants – the “Dirty 30”. Three countries are home to 19 of the “Dirty 30” plants, namely Germany (eight), Poland (six) and the UK (five).
The report recommends that a full coal phase-out should be one of the EU’s stated goals and that speeding up the process of transitioning out coal will require stiffening of specific EU policies, including a rapid and ambitious structural reform of the EU Emissions Trading System in order to put a meaningful price on carbon emissions. This should be accompanied by the introduction of an Emissions Performance Standard (EPS) for CO₂ from power plants to provide a clear investment signal for the decarbonisation of the power sector.
In addition, the Industrial Emissions Directive (IED) and National Emissions Ceilings Directive (NECD) must introduce stricter pollution limits for the emissions they cover, and EU funding instruments need to be reformed so that they aid the transition away from coal and other fossil fuels and support regions and communities with mining region transformation.
“The report shows that every coal-fired power station switched off will bring great benefits reaching beyond national borders, for both human health as well as climate” – Wendel Trio, Director of Climate Action Network Europe concluded. “After the Paris Climate Agreement, EU leaders have even more responsibility to dramatically ramp up efforts to shut down all coal power plants and swiftly move to 100 per cent renewable energy”.
Christer Ågren
A phase-out plan for coal in Europe
Very old and high-emitting plants are easy to replace with renewables and improvements in energy efficiency.
http://airclim.org/acidnews/phase-out-plan-coal-europe
The worst 30 coal and lignite power plants in Europe (EU-28) emitted 353 million tons of CO2 in 2015, more than 10 per cent of EU emissions. A phase-out plan for coal in Europe could start with a mandatory age limit of 35 years, along the lines earlier presented for Germany by the Society for Environment and Nature Conservation BUND/FOE Germany.
Such an age limit would reduce CO2 emissions by almost 262 million tonnes per year just among the 30 worst.
CO2 emissions in Europe are dropping, but no way near fast enough to comply with the Paris agreement. The 2020 target, 20 per cent less than 1990, is clearly inadequate, which shows in the low carbon price on the ETS market. In practice, the EU still follows the “walk now, run later” scheme.
One of the lowest hanging fruits is the power sector, where very old and high-emitting plants are easy to replace with renewables and improvements in energy efficiency, which have no direct emissions at all.
The worst lignite plants emit 1.35 kg of CO2/kWh, more than three times more than a gas power plant, which is also fossil-fuelled.
One path to deal with the worst plants has been developed by BUND/FOE Germany, as reported earlier in Acid News 3/14. It is a ban on all plants older than 35 years, which means that plants that started operating in 1985 or before must be closed by 2020.
In 2013, German coal power increased, despite fast-growing renewables. This created a crisis for the Energiewende. It looked as if nuclear power had been replaced with more coal, both lignite and hard coal. This was not really the case. Renewables grew fast, but so did power exports. And, unexpectedly, for both economical and political reasons gas power suddenly fell, while imported coal became dirt cheap.
The sudden coal surge threatened Germany’s environmental targets and reputation. Something had to be done. BUND, the German Friends of the Earth, came up with a plan in 2014, aiming at phasing out the oldest and dirtiest coal and lignite power plants by 2020 and all such plants at age 35.
If such a 35-year age limit phase-out were to be implemented all over Europe (EU-28), it would cut emissions by about 260 Mtons (from 353 Mtons in 2015) by 2020 or very soon thereafter, just among the worst 30 plants , known as the Dirty Thirty.
About 140 Mtons of this reduction would come from lignite plants and the remainder from hard coal power plants.
This is calculated by taking the 2015 emissions from each of the Dirty 30 plants, their capacity and the share of that capacity that will have reached 35 years by 2020, or in a few cases by 2021 or 2022.
Some of these 260 Mtons will obviously be cut for other reasons.
Longannet in the UK closed in 2015 and there are plans for other plants to either close some units or to use them less, by downgrading them from baseload to peak or reserve operation. This can make a big difference; a baseload power plant is supposed to be operated for about 90 per cent of the year at full capacity, or 8,000 hours, but a peak/reserve plant may operate in the order of 100 hours per year, decreasing emissions proportionally.
Some plants may also switch from coal to biomass. Drax in the UK used more biomass than coal in the first six months of 2016. It is difficult to tell whether enough biomass will be available at justifiable cost five years from now and what the political conditions will be.
The age structure of the plants – at least among the Dirty 30 – is such that many plants are old, a few new, but not so many in between.
A 35-year limit is not a panacea, as a number of big coal power plants have been commissioned very recently, and unwisely from every perspective. Under a serious climate policy, they cannot be allowed to operate anywhere near the lifetime expected by the investors.
Big change does not, however, necessarily mean a long time scale. Japan had 54 nuclear power reactors that supplied 30 per cent of the nation’s electricity in 2010. Since the Fukushima disaster in 2011 almost all nuclear power has been shut down, with just 0-3 reactors operating between 2013 and now. This happened without any previous planning and, except for the first two summers, without any rationing or other exceptional measures. The demise of all coal mining and much coal power in the UK has also happened very fast.
The problem is not whether dirty coal can be phased out, using existing technology and without requiring big economic and administrative burdens. It can. The problem is whether it can win political acceptance by being done in an equitable way, without undue burdens on certain groups and regions.
The German Green Party has developed a Road Map for Coal Exit in Germany , a 10-point plan, which gives a picture of how stumbling blocks can be overcome.
- Start a dialogue about the coal exit (until the end of 2017).
- Resolve the coal exit (by June 2018).
- Establish an oversight commission (April to December 2018).
- Prohibit new open-cast mines (by June 2018).
- Introduce CO2 budgets for fossil fuel plants (by June 2018).
- Enforce environmental and health protection (by October 2018).
- Protect funding of subsequent cost (by December 2018).
- Shape the structural change (by December 2018).
- Get emission trading (EU) into motion (by June 2019).
- Economic and social safeguarding (starting June 2019).
The devil is indeed in the details, but so are his opponents.
Fredrik Lundberg
Coal Executive Says His Industry Must Confront Climate Change
Richard Reavey says climate denial is eerily parallel to the tobacco industry’s old tactics, which hurt that business long-term
http://www.scientificamerican.com/article/coal-executive-says-his-industry-must-confront-climate-change/
It’s one thing when environmentalists say that fossil fuel companies’ positions on climate change are similar to Big Tobacco’s past deflections about the hazards of smoking.
It’s another entirely when it’s done by a coal official, who says his industry should heed tobacco’s costly lessons.
That’s what Richard Reavey, vice president of public affairs of Cloud Peak Energy Inc., a major coal miner in the western United States, appears to have done on June 29, 2015, when he presented a 24-page slideshow at an industry conference organized by the Rocky Mountain Coal Mining Institute in Snowmass, Colo.
Reavey said one of his goals for the presentation, titled “SURVIVAL IS VICTORY: LESSONS FROM THE TOBACCO WARS,” was to encourage the industry to move past debating climate change and talk to critics of the industry about addressing greenhouse gas emissions and energy use.
“The tobacco industry spent a lot of time in the bunker not listening to its critics, denying that there was any legitimate concern about smoking and health, and effectively trying to parse hairs and debate science,” Reavey said in an interview, “instead of trying to get to where they finally got to, which was that recognition that regulation was a legitimate goal of the public health community and something that the industry could live with.”
Coal companies should take a proactive strategy and talk about solutions, such as carbon capture utilization and storage (CCUS) technology, Reavey said.
“There’s no good that comes from continuing to be in that kind of binary debate,” he said.
Reavey said the roughly 250 listeners to the June presentation had a swath of reactions. Some saw his suggestions as savvy and others glossed over it. Some in the crowd, “troglodytic types,” Reavey said, maintained that climate change is still debatable.
“I don’t really understand their point of view,” he said.
Before coming to Cloud Peak, Reavey worked in public relations for Philip Morris International Inc., the cigarette and tobacco company, when the Department of Justice was suing the industry in the 1990s.
“The parallels are remarkable and eerie,” one slide reads. It says tobacco was and coal is under attack from “well funded, well organized NGO opposition driving regulatory policy, media messaging, and shaping public opinion—often with poor/no science.”
Reavey said he wasn’t comparing behavior of coal and tobacco firms. “The analogy I drew was between the tactics of coal’s opponents and the opponents of tobacco,” he said.
Analogies between fossil fuel companies’ knowledge of climate change and cigarette-makers’ knowledge that smoking caused cancer are common in environmental circles.
Congressional Democrats held a briefing in June on the subject—an event titled, “Oil Is the New Tobacco” (ClimateWire, June 23). And some believe fossil fuel companies could be legally liable if they knew about climate change dangers but suppressed that information. That possibility is the crux of the investigations by New York and Massachusetts attorneys general into Exxon Mobil Corp.
The fossil fuel industry bristles when it’s compared to the tobacco industry. And some environmentalists are suspicious about Reavey’s motivations.
Greg Zimmerman, deputy director of the Center for Western Priorities, an environmental advocacy group, said he came across the slideshow online last summer.
“It was unbelievable seeing it in writing,” Zimmerman said, adding that he’s familiar with the tobacco-to-oil analogy, but that the link to coal seems new.
Zimmerman seized on Reavey’s “poor/no science” line when reading the document.
“It’s maybe not an explicit denial, but it’s certainly an implicit denial,” Zimmerman said. “He’s still trying to undermine the science.”
Kert Davies, founder of the Climate Investigations Center and a former Greenpeace campaigner, read Reavey’s presentation, too.
“What he’s saying is ‘Coal, you can survive, look at tobacco,’” Davies said. “It’s a guy coming from tobacco sort of trying to teach coal,” he added. “Instructing them to go heavy on the clean coal, it buys you credibility, it buys you time.”
Piles of Dirty Secrets Behind a Model ‘Clean Coal’ Project
A Mississippi project, a centerpiece of President Obama’s climate plan, has been plagued by problems that managers tried to conceal, and by cost overruns and questions of who will pay.
http://www.nytimes.com/2016/07/05/science/kemper-coal-mississippi.html?&hp&action=click&pgtype=Homepage&clickSource=story-heading&module=first-column-region%C2%AEion=top-news&WT.nav=top-news&_r=2
DE KALB, Miss. — The fortress of steel and concrete towering above the pine forest here is a first-of-its-kind power plant that was supposed to prove that “clean coal” was not an oxymoron — that it was possible to produce electricity from coal in a way that emits far less pollution, and to turn a profit while doing so.
The plant was not only a central piece of the Obama administration’s climate plan, it was also supposed to be a model for future power plants to help slow the dangerous effects of global warming. The project was hailed as a way to bring thousands of jobs to Mississippi, the nation’s poorest state, and to extend a lifeline to the dying coal industry.
The sense of hope is fading fast, however. The Kemper coal plant is more than two years behind schedule and more than $4 billion over its initial budget, $2.4 billion, and it is still not operational.
The plant and its owner, Southern Company, are the focus of a Securities and Exchange Commission investigation, and ratepayers, alleging fraud, are suing the company. Members of Congress have described the project as more boondoggle than boon. The mismanagement is particularly egregious, they say, given the urgent need to rein in the largest source of dangerous emissions around the world: coal plants.
The plant’s backers, including federal energy officials, have defended their work in recent years by saying that delays and cost overruns are inevitable with innovative projects of this scale. In this case, they say, the difficulties stem largely from unforeseen factors — or “unknown unknowns,” as Tom Fanning, the chief executive of Southern Company, has often called them — like bad weather, labor shortages and design uncertainties.
Many problems plaguing the project were broadly known and had been occurring for years. But a review by The New York Times of thousands of pages of public records, previously undisclosed internal documents and emails, and 200 hours of secretly though legally recorded conversations among more than a dozen colleagues at the plant offers a detailed look at what went wrong and why.
Those documents and recordings, provided to The Times by a whistle-blower, an engineer named Brett Wingo, and interviews with more than 30 current or former regulators, contractors, consultants or engineers who worked on the project, show that the plant’s owners drastically understated the project’s cost and timetable, and repeatedly tried to conceal problems as they emerged.
The system of checks and balances that are supposed to keep such projects on track was outweighed by a shared and powerful incentive: The company and regulators were eager to qualify for hundreds of millions of dollars in federal subsidies for the plant, which was also aggressively promoted by Haley Barbour, who was Southern’s chief lobbyist before becoming the governor of Mississippi. Once in office, Mr. Barbour signed a law in 2008 that allowed much of the cost of building any new power plants to be passed on to ratepayers before they are built.
Seeing so many of the problems from the inside, at least one employee felt the need to speak up.
“I’ve reached a personal tipping point and feel a duty to act,” Mr. Wingo wrote in a 2014 email, which was among several that he sent to officials of Southern Company and Mississippi Power, the state utility that runs the plant, alleging that the company had broken federal law and engaged in corporate fraud. “Hope is not a strategy,” he added. “This is a high-profile project with many misguided enemies, so why give them free ammo?”
In their recorded conversations with Mr. Wingo, at least six senior engineers from the plant said that they believed that the delays and cost overruns, as well as safety violations and shoddy work, were partly the result of mismanagement or fraud.
“It has nothing to do with the design, it has nothing to do with the technology, it just has to do with poor project management,” Landon Lunsford, an engineer at the plant, said during one recorded call with Mr. Wingo last December, when they discussed an email from Southern’s legal department telling senior employees to retain all emails because of a continuing S.E.C. investigation.
The company will never admit the project-management problems because they will attract more scrutiny from regulators, Mr. Lunsford said. “As long as they can talk away the results as attributable to something else other than just poor performance, the other public service commissions can’t hold them over the fire as much,” he added.
Officials from Southern Company and Mississippi Power, which is a Southern subsidiary, said that they could not comment on Mr. Wingo’s allegations but that all decisions about cost and budget projections were made by consensus. They also said that Mr. Wingo’s accusations had previously been investigated by the company and could not be substantiated. Mr. Wingo was fired in February, a move that the Occupational Safety and Health Administration later ruled illegal.
Ed Holland, the former chief executive of Mississippi Power, added that one of the project’s biggest mistakes was to start construction with little of the plant designed. “We still believe that from our investors’ standpoint, this was a wise investment to prove the technology,” he said in an interview.
In the end, the Kemper project is a story of how a monopoly utility, with political help from the Mississippi governor and from federal energy officials who pressured state regulators in letters to support the project, shifted the burden of one of the most expensive power plants ever built onto the shoulders of unwitting investors and some of the lowest-income ratepayers in the country.
Kemper’s rising price tag and other problems will probably affect the Environmental Protection Agency’s proposed rules on new power plants, and also play into broader discussions about the best way to counter climate change. E.P.A. regulations in effect require new coal plants to have carbon capture technology but are being held up in federal court partly by arguments that the technology is not cost-effective.
The importance of this technology grows, as well, after President Obama said last week that the United States would join Canada and Mexico in pledging to reach a shared goal of generating 50 percent of North America’s electricity from zero-carbon sources by 2025, up from 37 percent today, with a power mix that includes wind, solar, hydropower, nuclear energy and coal or gas power paired with carbon capture technology.
“The big question with clean coal has always been whether it’s a moonshot or a money pit,” said Charles Grayson, the director of the Bigger Pie Forum, which advocates fiscal conservatism in Mississippi and has been critical of the Kemper project for years. “The Obama administration and my state made a really bad wager in trying to use Kemper to make the economic argument for this technology.”
High Hopes
Coal represents a conundrum: It is among the dirtiest sources of fuel, producing roughly 45 percent of the emissions that contribute to climate change. And yet the world still relies on it for power, with more than a quarter of the electricity used globally coming from coal plants.
Southern Company proposed a promising idea with the Kemper project. Providing a cleaner way to use coal, which is cheap and abundant in the United States, the plant also offered the means to preserve many coal-mining jobs that are fast disappearing in this part of the country.
Kemper County, with mostly two-lane roads cutting through clay hills and pine forest, has an average per capita income of $14,837 and an unemployment rate roughly double the national average. To the region, the plant offered more than clean power: It promised hope, at least 12,000 jobs and long-term savings. As construction ramped up, the county took in over $8 million annually in extra tax money, which went toward repairing roads, bridges and schools, lowering local property taxes, and clearing debt.
In the summer of 2005, as Hurricane Katrina toppled drilling rigs and uprooted pipelines in the Gulf of Mexico, the price of natural gas rose by more than 40 percent. In Mississippi, utility regulators saw the Kemper plant as a way to diversify its energy options in a state that relies on natural gas for nearly 80 percent of its electricity.
The plant, which broke ground in 2010, would run on lignite, a type of coal that is difficult to process but is plentiful in the region. Most of the carbon dioxide produced by the plant would be captured, compressed, sold and piped to oil fields. There, it would be pumped underground in a process known as enhanced oil recovery, to help push up previously unrecoverable oil to levels where it could be reached.
Though carbon capture technology is proven and widely viewed as a potentially important tool to slow global warming, the question has been whether it can be scaled up affordably.
Before becoming governor, Mr. Barbour helped orchestrate the transfer of about $270 million in federal subsidies from a canceled coal plant in Florida to the proposed Mississippi plant. As governor, Mr. Barbour then signed the Baseload Act, which shifted much of the cost and risk of building power plants from investors to consumers, and allowed utilities such as Mississippi Power to charge ratepayers for projects before they were completed.
Carbon capture has been considered a holy grail for decades. For Ronald Reagan, it was a solution to acid rain; for Bill Clinton, an alternative to nuclear power. George W. Bush billed his FutureGen project as the world’s first zero-emissions coal plant but mothballed it when it became too expensive.
As the emphasis on fighting climate change grew, the Obama administration hung many of its hopes on Kemper. Gina McCarthy, the E.P.A. administrator, cited federal support for the project as proof that her agency was not anti-coal, despite strict new rules on power-plant emissions. The Energy Department repeatedly wrote state regulators emphasizing the importance of the project.
By 2012, though, “Miss Power,” as locals called the state utility, was facing mounting criticism about the plant. In May of that year, after the utility said that the Kemper project was $366 million over budget, it announced a plan to raise its customers’ rates by 13 percent.
Campaigning for a seat on the Mississippi Public Service Commission, Thomas A. Blanton, an opponent of the project, ran television ads featuring an older woman eating dog food and warning of sacrifices that poorer people sometimes make to afford electricity. In cramped trailers where some of the poorest people in the state live, summer temperatures topped 110 degrees — potentially deadly for older residents who could not pay to keep their air-conditioning running.
“You don’t want to pay to build my home, and I don’t want to pay to build your plant,” John Gooding, a cabinetmaker from Bay St. Louis, who lost his home in Hurricane Katrina, said during a public hearing about the rate hikes. “Some people are still living in trailers, and now you want to build a plant you can’t guarantee.”
Other critics piled on. Environmentalists called the plant the “Solyndra of clean coal,” a reference to the heavily subsidized but failed federal solar project. They asked whether the plant’s climate change benefits were overstated because the carbon it would capture from coal was going to be used to pump more oil.
Why was Kemper being cited as a model worthy of replicating, they asked, given that other plants would not share one of Kemper’s main advantages: a plentiful supply of cheap coal nearby.
Alleging that Southern Company and Mississippi Power had overstated the plant’s cost-effectiveness, the Bigger Pie Forum sued to unseal project records. To help make their case that the Kemper plant would be competitive with natural gas, which is coal’s main competitor, utility executives predicted to investors and regulators that the per-unit price for natural gas would be higher than $11 by 2016. But gas remains less than $2 per unit, undermining the business case for the plant.
The project did create jobs, but Mark Klinedinst, a retired economics professor from the University of Southern Mississippi, said that more were lost in the region as businesses laid people off to pay for the higher electrical bills caused by Mississippi Power rate increases from plant construction. The University of Southern Mississippi also raised annual tuition $236 per student, partly to offset its additional $1 million in higher electrical costs, he said.
The Whistle-Blower
Mr. Wingo, 48, had lived paycheck to paycheck for years, working at small, struggling engineering firms. When he was hired in 2007 by a subsidiary of Southern, it was a big step up. He doubled his salary to become a midlevel manager to help oversee scheduling and some design decisions on a project that he believed would make history.
Before long, Southern began flying him around the country to explain the project to others. He received glowing performance reviews and was awarded an annual $2,000 “Southern Excellence” employee award.
By 2012, though, Mr. Wingo had begun his transition to whistle-blower. About two weeks after state regulators renewed the license for the project to continue, Mississippi Power admitted to regulators that it had concealed cost overruns of about $366 million.
In increasingly testy meetings and emails over succeeding months, Mr. Wingo told his supervisors that other scheduling information that Mississippi Power and Southern Company were providing to the public was infeasible and misleading.
Ed Day, Mississippi Power’s chief executive at the time, tried to tighten control over what was shared. “I would like to remind everyone ‘again,’ no numbers, schedules, or information in general should be communicated to external parties until I review it/them first,” Mr. Day wrote in an Aug. 8, 2012, email to senior staff.
Others shared Mr. Wingo’s growing concerns. Tom Theodore, a scheduling consultant who worked on the Kemper project for about eight months in 2012, described the company’s stated schedule as little more than “a pretty picture to show everybody that we’re all doing wonderful as opposed to what reality showed on the ground.”
His predecessors had altered the software so it no longer automatically adjusted the final price and completion date to reflect problems as they emerged, he said.
Greg Zoll, who had been hired by the state to be the project’s independent monitor, also grew skeptical. While engineering expenses and purchases went up, reported construction costs went down and scheduling timelines were shortened.
“These trends are illogical,” he wrote in of one of a series of highly critical reports that he filed with regulators from 2012 to 2014. Documents show that in a rush to qualify for federal subsidies, Mississippi Power started construction with less than 15 percent of the plant designed, Mr. Zoll told regulators.
Mississippi Power rejected Mr. Zoll’s criticism, responding that the delays were caused by glitchy software and shifts in design, and that the company was absorbing most of the additional costs.
But Brandon Presley, now the chairman of the Mississippi Public Service Commission, which regulates utilities, said that the project was troubled from the start and he voted against it. “The train left the station,” he said, when, in a rush to qualify for millions of dollars in federal subsidies, the commission approved the project.
He added that the problem was not the federal subsidies, which are necessary to develop innovative technology, but the failure by all parties to slow down and ask enough questions.
On May 20, 2013, Mr. Day abruptly stepped down as chief executive. His replacement, Ed Holland, told regulators that Mr. Day had directed or allowed employees to withhold from regulators documents about cost overruns. That sparked public outcry because the information was withheld from the commission while it was deciding whether to reapprove the project. “I will see that it never happens again,” said Mr. Holland, according to news articles at the time.
An Internal Battle
In February 2014, an argument erupted at the plant. Engineers told upper-level managers that the company should not promise to regulators and investors that the project would be done before the end of the year, emails and recorded calls show. Weeks later, the company did so anyway.
The next day, the owner of the project’s scheduling firm sent an email saying that he could not in good conscience continue to work on a project that did not “fairly and accurately represent the work that still remains.”
Mr. Wingo wrote in a subsequent email to an official at PricewaterhouseCoopers, an auditing firm that was helping to manage the project, “This has really put the entire project at a crossroads.” The other engineers in his division were in “utter disbelief” that the company had published a false schedule, he added.
On March 10, Mr. Wingo called Mr. Fanning, the chief executive of Southern Company, to ensure the message reached him. “I’m glad you brought this to me,” Mr. Wingo said Mr. Fanning told him. “I plan to get to the bottom of this.”
Instead, Southern Company and Mississippi Power focused in subsequent months at least as much on damage control as they did on rooting out wrongdoing.
In meetings, Mr. Wingo and other engineers said that they were told by plant managers that they needed to present an optimistic timetable for the project or the utility risked “financial Armageddon” of lost tax subsidies, spooked investors, possible bankruptcy, and harsh criticism from the news media, regulators and lawmakers.
After Mr. Wingo provided company officials with a binder of documents corroborating his allegations, he said he was ordered to stop sending emails on the matter because they could become public through litigation.
After he told his manager in an email that most project engineers agreed that the plant could not be completed by 2014, the manager continued telling executives that “to a man” all of the plant’s engineers thought that finishing by 2014 was feasible, Mr. Wingo said, and Mr. Lunsford, the engineer at the plant, reiterated in a recorded call that the manager’s comment was false.
Mr. Wingo, who began speaking to reporters, refused an offer of roughly $975,000 from the company to keep quiet, according to interviews and court records related to his whistle-blower claims. Southern was then granted a restraining order, later dropped, forbidding him from speaking publicly about the plant, court records show.
Mr. Wingo said that he began recording his phone conversations in August 2014, hoping to protect himself. During those calls, at least two of Mr. Wingo’s colleagues said that they strongly disagreed with what one of them called “his grand conspiracy.” A half-dozen other engineers told Mr. Wingo that they shared his views.
The Times contacted each of the engineers whose conversations were recorded and shared by Mr. Wingo. All declined to comment.
The recordings include commiseration among colleagues, and ambivalence from engineers who vacillated between criticizing and defending the project. They include typical workplace grousing about bosses who workers say are in need of “Viagra for the brain” and are incapable of running even a Popsicle stand.
They also reveal an internal struggle that Mr. Wingo faced: While still a believer in the possibility of clean coal, he was uneasy to find himself on the same side as environmental groups that oppose fossil fuels.
“My enemy’s enemy is not necessarily my friend,” he said in one recorded conversation in February 2015.
What troubled the engineers most was the poor quality of work: leaking gaskets, cracked ductwork, and pipes missing inspection records, valves and supports. Ryan Brown, a plant engineer, said during a phone call that he was having to “go back and do some sort of repair or rebuild” for every piece of work handed to him by the plant’s construction teams, which were under intense deadline pressure.
In a call on Aug. 22, 2014, Mr. Wingo confronted one of his superiors, Brett Wingard, about photographs covertly taken by an inspector who was concerned about defective pipes at the plant. Mr. Wingard dismissed the threat, saying that the pipes were only in a section of the plant not yet in operation (part of the project is running on natural gas already). GPS information in the images indicates otherwise.
Other workers recounted in phone calls to Mr. Wingo that they had discovered a large section of outdoor exhaust pipe that was glowing cherry red one night in September 2014 because 1,400-degree gases were misdirected through it. “That’s so bad that it made people all over the company stand up and say this is ridiculous,” Mr. Lunsford said in an October call with Mr. Wingo.
Several co-workers warned Mr. Wingo against being “a martyr.” One engineer, Donald Falletta, told him in a phone call that jumping on a grenade “when there ain’t nobody else in the damn room don’t save nobody.” In a call six months later, Mr. Falletta added that he too believed that managers were being “told to lie” about the pace of progress.
In February 2015, Southern sued Mr. Wingo, alleging that he had agreed to a settlement but failed to comply with its terms, which included keeping quiet about the plant. Mr. Wingo said that he never signed or agreed to any settlement.
Tim Leljedal, a spokesman for Southern Company, added that Mr. Wingo’s allegations had been thoroughly investigated by the company and by outside counsel and were found to be unsubstantiated. He added that with any project of this scope, detractors are inevitable.
Shortly after the lawsuit was filed, Mr. Wingo’s colleague, Robert Adams, called him to say that he was leaving the company and to ask whether he would be legally allowed to speak publicly about the plant at that point. “Once we resign, do you think they will try to silence us?” asked Mr. Adams, who left the company shortly thereafter.
In March, the company dropped its case against Mr. Wingo. “Hug that wife,” Donald Falletta said in a phone conversation congratulating Mr. Wingo. “She’s been through a damn roller-coaster ride.”
The utility was on a roller coaster, too. In February 2015, the state Supreme Court ruled that Mississippi Power had to repay ratepayers roughly $377 million for increasing rates by 15 percent in 2013 and 3 percent in 2014 without proper approvals. Utility officials responded that the requirement would bankrupt it, and several months later persuaded regulators to approve a new increase, 15 percent.
Meanwhile, engineers discussed the pressure to hurry construction. One of them, Brent Duncan, recounted in a phone call that he told a scheduling contractor how discouraged he was that managers were being allowed to “screw” with the schedule and “then claim they can meet all these dates, and there’s no way.”
The engineers joked that Mississippi Power, eager to show progress to investors and regulators, overstated certain milestones. For example, it bragged of achieving the “first fire,” which involves the lighting of the gasifier, when what they did fell far short of the actual definition, according to Mr. Wingo.
“We burned natural gas in a pilot” light, Brandon Davis, an engineer, said during one phone conversation. “I accomplish that every day in my garage.”
Some engineers wondered aloud whether accurate information was making it to the top. “By the time the message gets to Tom Fanning,” Mr. Lunsford said in a September 2015 call, “it’s so muddled and messed up that he’s not even hearing the truth.”
In March, the Occupational Safety and Health Administration alerted Southern that it had violated whistle-blower protections. The agency rejected the company’s claim that it was justified in firing Mr. Wingo because he could “not be trusted to support the chain of command.”
Mr. Wingo filed his whistle-blower claim against Southern Company under the Sarbanes-Oxley Act. While that law does not lead to paying a cash bounty to successful whistle-blowers, Mr. Wingo declined to say whether he has also filed a claim with the S.E.C. under the Dodd-Frank Act, which does pay awards for successful cases.
In April of this year, Southern informed the S.E.C. for at least the eighth consecutive month of a new delay and cost overrun, this time for $60 million, bringing the total spent on the Kemper project to about $6.7 billion. In May, the Obama administration said that it planned to cut spending on clean-coal technologies by 3 percent in next year’s budget.
Supporters of carbon capture say that Kemper’s problems are not representative of the entire industry, and that one part of the plant — the gasifier that converts cheap coal into synthetic gas — is primarily causing the delays. But critics say that the principal challenge of carbon capture is cost, and that the gasifier’s ability to use cheap coal has always been advertised as key to making the project affordable.
As Mississippi Power and Southern Company have continued struggling to bring the plant online, Southern has repeatedly promoted in calls to investors its plans to help offset the project’s cost by selling the carbon-capture technology abroad.
For now, Mr. Presley, the chairman of the Mississippi Public Service Commission, says he is taking a wait-and-see approach, hoping that when and if the plant finally comes online, it works as promised. Mississippi Power has said that every month of delay adds more than $20 million to the overall cost, but it will charge customers for extra costs from the plant only with approval by the commission.
Mr. Presley will eventually have to grapple with what he called the “awful task” of not pushing the utility into bankruptcy while determining how much electricity customers, taxpayers and investors should pay for the billions of dollars in cost overruns.
Biggest US coal company funded dozens of groups questioning climate change
Analysis of Peabody Energy court documents show company backed trade groups, lobbyists and thinktanks dubbed ‘heart and soul of climate denial’
https://www.theguardian.com/environment/2016/jun/13/peabody-energy-coal-mining-climate-change-denial-funding
Peabody Energy, America’s biggest coalmining company, has funded at least two dozen groups that cast doubt on manmade climate change and oppose environment regulations, analysis by the Guardian reveals.
The funding spanned trade associations, corporate lobby groups, and industry front groups as well as conservative thinktanks and was exposed in court filings last month.
The coal company also gave to political organisations, funding twice as many Republican groups as Democratic ones.
Peabody, the world’s biggest private sector publicly traded coal company, was long known as an outlier even among fossil fuel companies for its public rejection of climate science and action. But its funding of climate denial groups was only exposed in disclosures after the coal titan was forced to seek bankruptcy protection in April, under competition from cheap natural gas.
Environmental campaigners said they had not known for certain that the company was funding an array of climate denial groups – and that the breadth of that funding took them by surprise.
The company’s filings reveal funding for a range of organisations which have fought Barack Obama’s plans to cut greenhouse gas emissions, and denied the very existence of climate change.
“These groups collectively are the heart and soul of climate denial,” said Kert Davies, founder of the Climate Investigation Center, who has spent 20 years tracking funding for climate denial. “It’s the broadest list I have seen of one company funding so many nodes in the denial machine.”
Among Peabody’s beneficiaries, the Center for the Study of Carbon Dioxide and Global Change has insisted – wrongly – that carbon emissions are not a threat but “the elixir of life” while the American Legislative Exchange Council is trying to overturn Environmental Protection Agency rules cutting emissions from power plants. Meanwhile, Americans for Prosperity campaigns against carbon pricing. The Oklahoma chapter was on the list.
Contrarian scientists such as Richard Lindzen and Willie Soon also feature on the bankruptcy list.
So does the Washington lobbyist and industry strategist Richard Berman, whose firm has launched a welter of front groups attacking the EPA rules.
The filings do not list amounts or dates. But the documents suggest Peabody supported dozens of groups engaged in blocking environmental regulations in addition to a number of contrarian scientists who together have obstructed US and global action on climate change.
The support squares up with Peabody’s public position on climate change. The company went further than the fossil fuel companies and conservative groups that merely promoted doubt about the risks of climate change, asserting that rising carbon emissions were beneficial.
Just last year, Peabody wrote to the White House Council on Environmental Quality describing carbon dioxide as “a benign gas that is essential for all life” and denying the dangers of global warming.
“While the benefits of carbon dioxide are proven, the alleged risks of climate change are contrary to observed data, are based on admitted speculation, and lack adequate scientific basis,” the company wrote in the 24 March 2015 letter.
The company agreed in November to make fuller disclosures about global warming risks under a settlement deal reached with the New York attorney general. Peabody had been under investigation for misleading investors and the public about the potential impact of climate change on its business.
Even so, the full extent of Peabody’s financial support for climate denial is unlikely to be revealed until the completion of bankruptcy proceedings.
“The breadth of the groups with financial ties to Peabody is extraordinary. Thinktanks, litigation groups, climate scientists, political organisations, dozens of organisations blocking action on climate all receiving funding from the coal industry,” said Nick Surgey, director of research for the Center for Media and Democracy.
“We expected to see some denial money, but it looks like Peabody is the treasury for a very substantial part of the climate denial movement.”
Peabody’s filings revealed funding for the American Legislative Exchange Council, the corporate lobby group which opposes clean energy standards and tried to impose financial penalties on homeowners with solar panels, as well as a constellation of conservative thinktanks and organisations.
These included the State Policy Network and the Franklin Center for Government and Public Integrity, which worked to defeat climate bills in Congress and are seeking to overturn Environmental Protection Agency rules to reduce carbon pollution from power plants, as well as the Congress for Racial Equality, which was a major civil rights organisation in the 1960s.
The filings also revealed funding for the George C Marshall Institute, the Institute for Energy Research, and the Center for the Study of Carbon Dioxide and Global Change, which are seen as industry front groups.
The names of a number of well-known contrarian academics also feature in the Peabody filings, including Willie Soon, a researcher at the Harvard-Smithsonian Center for Astrophysics. Soon has been funded almost entirely by the fossil fuel industry, receiving more than $1.2m from oil companies and utilities, but this was the first indication of Peabody funding.
Soon and the Smithsonian did not respond to requests for comment.
Richard Lindzen and Roy Spencer, two contrarian scientists who appeared for Peabody at hearings in Minnesota last month on the social cost of carbon, were also included in the bankruptcy filings.
Peabody refused to comment on its funding for climate denial groups, as revealed by the bankruptcy filings.
“While we wouldn’t comment on alliances with particular organizations, Peabody has a track record of advancing responsible energy and environmental policies, and we support organizations that advocate sustainable mining, energy access and clean coal solutions, in line with our company’s leadership in these areas,” Vic Svec, Peabody’s senior vice-president for global investor and corporate relations, wrote in an email.
Over the last decade, fossil fuel companies distanced themselves from open climate denial. Much of the funding for climate denial went underground, with corporations and conservative billionaires routing the funds through secretive networks such as Donors’ Trust.
But the sharp drop in coal prices, under competition from cheap natural gas, and a string of bankruptcies among leading US coal companies has inadvertently revealed the coal industry’s continued support for climate denial – even as oil companies moved away from open rejection of the science.
Earlier this year, bankruptcy filings from the country’s second-biggest coal company, Arch Coal Inc, revealed funding to a group known mainly for its unsuccessful lawsuit against the climate scientist Michael Mann.
The $10,000 donation to the Energy and Environment Legal Institute (E&E) was made in 2014, according to court documents filed in Arch’s chapter 11 bankruptcy protection case.
Last October, court filings from another coal company seeking bankruptcy protection, Alpha Natural Resources, revealed an $18,600 payment to Chris Horner, a fellow at E&E.