Will ALEC block EPA coal pollution safeguards at Illinois' controversial Prairie State Energy Campus?

  • Posted on: 26 February 2013
  • By: Connor Gibson

The U.S. Securities and Exchange Commission is investigating the Illinois-based Prairie State Energy Campus, a combined coal mine and power plant spearheaded by Peabody Energy, co-owned by eight public power companies based in the Midwest. Numerous cost overruns from construction delays and equipment problems at the Campus resulted in customers in several states having to pay for power well above market price.

While Peabody defends Prairie State Energy Campus (PSEC) from SEC scrutiny, a corporate front group has developed copycat legislation that could exempt dirty projects like PSEC from national clean air and water laws.

A model state bill developed by the American Legislative Exchange Council (ALEC) would block federal pollution regulations when coal is mined and then burned or altered within the borders of a single state. The "Intrastate Coal and Use Act," created within ALEC's Energy, Environment and Agriculture task force, is ideal for projects like Prairie State Energy Campus, which mines and burns coal on site.

By exempting the U.S. Environmental Protection Agency from overseeing permits for projects like Prairie State, ALEC's Intrastate Coal and Use Act leaves regulation to state agencies, which may have weaker pollution standards or simply lack enough staff to do their jobs, as the gas fracking boom has demonstrated.  

Peabody itself is a member of ALEC's anti-environmental task force, which readied the Intrastate Coal and Use Act for national distribution, and a member of ALEC's Private Enterprise Board, which may explain ALEC's role in promoting the Prairie State Energy Campus.

Materials leaked to Greenpeace after ALEC's most recent conference in Washington DC show that the American Coalition for Clean Coal Electricity, a coal front backed by companies including Peabody, was showcasing Prairie State at ALEC's conference. Files in a USB drive branded with the ACCCE logo contained three promotional videos for PSEC while a paper folder with the ACCCE logo contained a promotional brochure for the Campus. 

The ALEC model does not appear to have been introduced in Illinois, although ALEC has been busy pushing a wishlist of state laws for its dirty energy members companies like Peabody, Duke Energy and ExxonMobil.

One of ALEC's national priorities this year is to un-legislate state incentives for clean energy under the false premise that they have an adverse impact on electricity rates. While there appears to be no significant correlation between state clean energy standards and raised utility rates, the Prairie State Energy Campus is raising electricity prices, as reported last July in the St. Louis Post-Dispatch:

The St. Louis suburb [Kirkwood] needed a stable, long-term power source. The plant’s developers needed customers. The parties struck a deal — a 30-year contract that would supply more than half of Kirkwood’s electricity beginning in late 2011. The kicker: The energy produced at Prairie State would be cheap compared with market power prices at the time.

But now, as the first of two 800-megawatt generating units at Prairie State begin operations — six months late — the plant hardly seems the bargain it did five years ago.

The $5 billion price tag is 25 percent more than when the city signed on, driving up the price of electricity that Kirkwood and other cities are obligated to buy. And construction delays mean the city is getting nothing for the monthly $296,000 checks it began writing to Prairie State’s owners in February.

Because ALEC peddles copycat laws that benefit dirty and expensive coal projects while attacking clean energy incentives, renewable energy interests like the American Wind Energy Association and the Solar Energy Industries Association have abandoned ALEC.

History of ALEC's Adoption of the Intrastate Coal and Use Act:

An ALEC legislator in West Virginia named Gary Howell introduced a version of the Intrastate Coal and Use Act back in 2011; his bill inspired the current model bill that ALEC is distributing. Delegate Howell suggested that all of the top 20 coal producing states consider his legislation, indicating where watchdogs should keep their eyes peeled for ALEC's model legislation.

While the bills weren't passed in 2011, West Virginia is again considering the Intrastate Coal and Use Act in the 2013 session, renewing their attempts to keep the EPA from overseeing permits to burn coal from mountain top removal.

Another version of the Intrastate Coal and Use Act has surfaced in Kentucky.

In fact, it was the Kentucky-based Bluegrass Institute that sponsored ALEC's Intrastate Coal and Use Act within ALEC's anti-environmental task force, apparently based off of what WV Del. Howell has been introducing into his own legislature. Like ALEC, the Bluegrass Institute is a member of the State Policy Network, an umbrella organization for state and national think tanks and interest groups that are usually funded by the Koch brothers and company.

Coal's Broken Promises: Not Cheap, Not Clean

A 2005 Peabody company newsletter shows that PSEC was supposed to cost $2 billion, less than half its actual price. The cost estimate was later doubled to $4 billion before reaching its actual $5 billion price tag. According to a 2012 report by the Institute for Energy Economics and Financial Analysis:

Instead of being a source of low cost electricity, the first year cost of power from Prairie State is 40 to 100 percent higher than the current cost of power in the Midwest wholesale markets and is expected to remain higher than market prices for the next ten to thirteen years, if not longer.

The Campus proposal was supported by former Illinois Governor Rod Blagojevich (currently serving a 14-year prison sentence for corruption charges), who publicly supported construction of the plant and ate up Peabody's false promises of cheap energy. In Big Coal, author and journalist Jeff Goodell notes that Peabody's desire to build its own coal plant was to help burn its own reserves of high-sulfur coal from Illinois, which the market did not have much of an appetite for. A representative of the Illinois Office of Coal Development told Goodell, "Most power plants are built in order to generate electricity. Prairie State was really conceived more as a platform to burn Peabody coal." While Peabody sold all but 5% of its stake in PSEC to eight nonprofit power companies, it has been the driving force behind the Campus since 2001.

Goodell noted that even with its highly-touted pollution control equipment, PSEC is still a dirty coal plant. It still emits hazardous particulates, acidic gasses and heavy metals. It still dumps immense amounts of carbon dioxide into our atmosphere, the key greenhouse gas that is contributing to global climate change:

"Prairie State will emit more than 11 million tons [of carbon dioxide] a year, marginally less than a similar size coal plant built thirty years ago, but more than twice as much as every vehicle sold by the Ford Motor Company in a single year."

Illinois' bind demonstrates the lose-lose situation promoted by the coal industry: drink and breathe our pollution now, and pay and later.

As clean energy becomes increasingly viable, even without considering the costs of fossil fuel pollution and climate change, some cities are taking matters into their own hands, including [the ironically-named] Carbondale Illinois, which recently established that 100% of its power will come from clean energy. Cincinnati, Ohio dumped Duke Energy and made a similar commitment, as have all municipal facilities in Austin, Texas.

But clean energy advocates be warned: the more the American public recognizes that 19th Century energy like coal is a thing of the past, the more the dirty energy industries are going to spend big to desperately defend their bottom lines.


ALEC, CSG, ExxonMobil Fracking Fluid "Disclosure" Model Bill Failing By Design

  • Posted on: 4 December 2012
  • By: Connor Gibson

Written by Steve Horn, crossposted from DeSmogBlog.

Last year, a hydraulic fracturing ("fracking") chemical fluid disclosure "model bill" was passed by both the Council of State Governments (CSG) and the American Legislative Exchange Council (ALEC). It proceeded to pass in multiple states across the country soon thereafter, but as Bloomberg recently reported, the bill has been an abject failure with regards to "disclosure."

That was by design, thanks to the bill's chief author, ExxonMobil

Originating as a Texas bill with disclosure standards drawn up under the auspices of the Obama Administration's Department of Energy Fracking Subcommittee rife with oil and gas industry insiders, the model is now codified as law in Colorado, Pennsylvania, and Illinois.

Bloomberg reported that the public is being kept "clueless" as to what chemicals are injected into the ground during the fracking process by the oil and gas industry.

"Truck-Sized" Loopholes: Fracking Chemical Fluid Non-Disclosure by Design 

"Drilling companies in Texas, the biggest oil-and-natural gas producing state, claimed similar exemptions about 19,000 times this year through August," explained Bloomberg. "Trade-secret exemptions block information on more than five ingredients for every well in Texas, undermining the statute’s purpose of informing people about chemicals that are hauled through their communities and injected thousands of feet beneath their homes and farms."

For close observers of this issue, it's no surprise that the model bills contain "truck-sized" loopholes

"A close reading of the bill...reveals loopholes that would allow energy companies to withhold the names of certain fluid contents, for reasons including that they have been deemed trade secrets," The New York Times explained back in April.

Disclosure Goes Through FracFocus, PR Front For Oil and Gas Industry

The model bill that's passed in four states so far mandates that fracking chemical fluid disclosure be conducted by FracFocus, which recently celebrated its one-year anniversary, claiming it has produced chemical data on over 15,000 fracked wells in a promotional video

The reality is far more messy, as reported in an August investigation by Bloomberg

"Energy companies failed to list more than two out of every five fracked wells in eight U.S. states from April 11, 2011, when FracFocus began operating, through the end of last year," wrote Bloomberg. "The gaps reveal shortcomings in the voluntary approach to transparency on the site, which has received funding from oil and gas trade groups and $1.5 million from the U.S. Department of Energy."

This moved U.S. Representative Diana DeGette (D-CO) to say that FracFocus and the model bills it would soon be a part of make a mockery of the term "disclosure."

"FracFocus is just a fig leaf for the industry to be able to say they’re doing something in terms of disclosure," she said.

"Fig leaf" is one way of putting it.

Another way of putting it is "public relations ploy." As Dory Hippauf of ShaleShock Media recently revealed in an article titled "FracUNfocusED," FracFocus is actually a PR front for the oil and gas industry.

Hippauf revealed that FracFocus' domain is registered by Brothers & Company, a public relations firm whose clients include America’s Natural Gas Alliance, Chesapeake Energy, and American Clean Skies Foundation - a front group for Chesapeake Energy. 

Given the situation, it's not surprising then that "companies claimed trade secrets or otherwise failed to identify the chemicals they used about 22 percent of the time," according to Bloomberg's analysis of FracFocus data for 18 states.

Put another way, the ExxonMobil's bill has done exactly what it set out to do: business as usual for the oil and gas industry.

Image Credit: ShutterStockbillyhoiler

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