Coal

Peabody Energy dumps retirees in to company "created to fail," then cuts their pensions and benifits

  • Posted on: 25 March 2013
  • By: JesseColeman

Peabody Energy, the largest coal company in the US and one of the largest in the world, is once again embroiled in controversy over shady treatment of employees. In 2007, Peabody Energy created Patriot Coal, a spin-off company comprised of Peabody’s eastern US mines. According to lawsuits involving the United Mine Workers (UMW), Patriot was formed as a place to stash union mines in West Virginia and the Midwest, along with the significant pension and health-care obligations that these eastern mines held. According to UMW, Patriot was essentially a "company created to fail," to give Peabody Energy and Arch Coal (another major US coal company who sold union mines to Patriot) an easy way to avoid paying union pensions and health-care benefits, while continuing to profit from their giant, nonunion surface mines in the Powder River Basin of Montana and Wyoming.

Once Patriot declared bankruptcy, which it did last July, all of the pensions and medical benefits Peabody was obligated to pay their workers were put on the chopping block, just as Peabody had hoped. If Peabody succeeds, 10,000 retirees and another 10,000 dependents will lose the benefits promised them. Now, retired mine workers who labored for Peabody under the promise that they would receive health care and pensions, are outraged. Protests have forced Peabody to move its annual meeting to Wyoming, to avoid the civil disobedience by coal miners in the east. This is just the latest chapter in a long history of deceptive and exploitative practices by Peabody Energy and the coal industry in general. The American Coalition for Clean Coal Electricity (ACCCE), a coal front group funded by Peabody claims “Coal = Jobs.” But Peabody’s callous treatment of pensioners exposes what math the coal industry really cares about.

Industry: 

Southern Company CEO Admits Kemper "Clean Coal" Plant is a Bust

  • Posted on: 27 February 2017
  • By: Connor Gibson

Southern Company CEO Tom Fanning and former U.S. Secretary of Energy Ernest Moniz tour the Kemper facility construction site in 2013. Photo credit: Terri Ferguson Smith and The Meridian Star.

This article was written by Dan Zegart at the Climate Investigations Center. I am crossposting this with his permission. 

Update: I've added some of the FOIA documents, below, from the CIC's investigations into the Kemper facility, courtesy of the Energy and Policy Institute.

In an apparent first salvo in a public relations campaign to shift blame for the Kemper power plant boondoggle away from himself and corporate management and onto state regulators, Southern Company chief executive officer Tom Fanning admitted this week that Kemper plant is not economically viable as a coal-burning power plant.

The startling reversal came during an earnings call Thursday at a time when Southern faces intense scrutiny from federal and state regulators and the Securities and Exchange Commission - - and as its Mississippi Power Company subsidiary, the plant's owner, faces a Moody's downgrade over Kemper's skyrocketing costs and failure to operate despite being three years past its promised operating date.  Southern took a 27 percent hit to its fourth quarter net income thanks to Kemper schedule delays.

During the call, Fanning acknowledged that Kemper can only be feasible if it runs on natural gas as financial analysts questioned him about a just-released "economic viability" study by Southern that found that low gas prices for the long-term mean the plant can't profitably gasify lignite in the gasifiers Southern spent most of $7.1 billion to build.  

Fanning called a "reduction in the longterm gas price forecast" an "overwhelming change, the big change. Obviously, there are others. It is a point in time. When we had this plant certificated, we all thought that gas prices were going to be double digits and there was some spread that were way higher than where we are now."

Fanning's comments came as the company announced it will soon file a rate case with the Mississippi Public Service Commission seeking to recover its costs for the plant.  

Although Fanning has often reassured Mississippians that they are protected by a  $2.88 billion cost cap agreement limiting their liability for the plant's runaway budget,  he has failed to mention that once the plant is declared operational, the cap won't protect them from additional costs of some $4 billion. That includes $200 million a year in operation and maintenance costs, a disturbingly high figure that keeps going up for the novel "clean coal" plant.

To investors, Southern often touts its friendly relationships with state regulators in the four states in which its regulated utilities operate, but the fall 2015 Mississippi PSC election quickly became a referendum on Kemper, replacing two commissioners who reliably rubberstamped MPC's agenda with two new faces, Sam Britton and Cecil Brown, both of whom have pledged not to leave ratepayers holding the bag.

A source close to the Public Service Commission told CIC recently that the PSC staff has run the numbers and that even under the cap, electrical rates could increase by 40 percent or more - a catastrophic burden for MPC's 186,000 disproportionately lower-income customers in 23 counties in southern Mississippi.

 

Critics have noted that a natural gas facility comparable to the 582-megawatt Kemper facility would have cost about $500 million. 

During the earnings call, Fanning did not draw the obvious conclusion and admit the plant will never actually use its twin gasifiers to produce electricity.

In fact, while admitting the technology isn't viable, Southern nevertheless claimed in its annual report filed last week that it plans to have the plant on-line with both gasifiers operating by mid-March. 

Mississippi Power already faces three lawsuits over allegations that it misrepresented when the plant would be completed and how much it would cost during the project's seven-year history.  Those allegations, aired in a front page New York Times story last summer, are also the subject of a probe by the Securities and Exchange Commission.

An important prong of Southern's PR strategy seems to be to shift the blame for Kemper onto the PSC itself.  During the earnings call, Fanning also said, as he has frequently of late, that Southern built the Kemper energy facility because the Mississippi PSC wanted a coal facility as a "hedge" against potential "double-digit" gas prices.

However, documents obtained in a Freedom of Information Act request from the Department of Energy, which has provided a total of $407 million in grants for Kemper, demonstrate that the impetus for the facility came from senior management at Southern, including then-chief operating officer Fanning, and from Mississippi Governor and longtime Southern Company lobbyist Haley Barbour, who pressured first the Department of Energy, and then enlisted the secretary of energy himself, to pressure Mississippi's three PSC commissioners into approving plans for the construction of Kemper.  

The documents also reveal that while possible gas price volatility was cited,  Southern Company's proposal relied almost entirely on the plant's promise as a test case for cutting CO2 emissions from burning coal - especially lignite coal, a dirty, low-energy, but plentiful variety found in eastern Mississippi and throughout the world.  

Barbour was both governor of Mississippi and still actively lobbying for the company in early 2008 when he and Southern officials launched an all-out campaign to convince the Department of Energy to transfer an existing grant to build a 285-megawatt coal-fired power plant in Orlando, Florida to a new site in Kemper County, near the Alabama border.

Taking advantage of the availability of hundreds of millions of dollars from DOE's Clean Coal Power Initiative, Southern doubled the size of the plant, added carbon capture and sequestration technology to the Orlando design, which used a first-of-its-kind technology developed by Southern Company and Kellogg Brown & Root (KBR) called transport integrated gasification (TRIG) to heat coal under high pressure in a reactor and turn it into a syngas similar to natural gas to drive a turbine to generate electricity.

KBR and Southern hope that licensing the TRIG technology in coal-reliant countries like Poland where lignite is common will help pay back development costs.

This technology makes Kemper, for all practical purposes, a petrochemical plant, not a traditional coal-fired electric plant.  TRIG uses a KBR process called "catalytic cracking" that, according to DOE, "has been used successfully for over 50 years in the petroleum refining industry."

Notably, however, it had never been used to generate electricity.

Angling for a sizeable increase in support from DOE over what it received for its Orlando project,  Southern tricked out Kemper with additional goodies.  

These included carbon capture equipment,  plus a process to produce sulfuric acid from waste gases. The plan was to strip out the CO2 and connect the plant to an existing network of CO2 pipelines, then inject the gas into older, underproducing Mississippi oil fields to push up more oil - a process known as enhanced oil recovery.  

In so doing, however, Southern now added further complexity and uncertainty to the still-untested TRIG system.

On February 6, 2008, Eric Burgeson of BGR, Haley Barbour's lobbying firm, requested that then-Secretary of Energy Samuel Bodman meet with himself, Barbour, then-Southern CEO-David Ratcliffe,  and other officials Southern Company and Mississippi Power officials to discuss moving and expanding the DOE's commitment from the Orlando project to Kemper.  The initial cost projection was $1.2 billion.  DOE would put up $270 million on top of $23 million spent in Orlando - where the project was already substantially over-budget.

"Front-end Engineering and Design (FEED) is underway to support operation in Kemper County in June 2013," Burgeson wrote, although Southern later admitted that very little FEED had been completed.

Barbour had personally lobbied for Southern Company for more than a decade before he became governor and began representing it again upon leaving office in 2012.  Despite the questionable ethics of a sitting governor working hand-in-glove with his own lobbying firm to reel in more than a quarter of a billion dollars in DOE money for Southern Company (Barbour defends himself by noting he put his 50,000 shares of BGR in a "blind trust" when he became governor),  the meeting with DOE Secretary Bodman took place on February 26th.

By the fall of 2008, a funding package of almost a billion dollars in DOE grants and federal tax credits was in place.  By then the cost had already gone up to $2.4 billion and the schedule had been pushed back to spring 2014. DOE also waived repayment obligations for what was supposed to have been a loan.

To get the project rolling, however, Southern needed a "certificate of convenience and necessity" from the Mississippi Public Service Commission to certify that the project was needed and allow construction to begin

However, the PSC voted against the project in April 2010, then reversed its decision weeks later. In between, Barbour wrote the Commission urging approval, as did Secretary of Energy Steven Chu. James Markowsky, head of the department's Office of Fossil Energy, responsible for developing new coal technologies, wrote several such letters to the PSC.

There are reasons to doubt that the current PSC, despite campaign promises to the contrary, will actually hang tough with Mississippi Power if the utility tries to stick customers with an outsized bill for Kemper.

While neither of the new commissioners - Sam Britton and Cecil Brown - has made a public statement on the project lately,  Britton's campaign manager during his PSC run was Austin Barbour, Haley's nephew, and a principal in the GOP-focused Clearwater Group, whose other partner is Arnie Hederman, former chairman of the Mississippi Republican Party. 

Though his gubernatorial term ended in 2012, Barbour himself was deeply involved in the PSC races, and is believed to have hand-picked Britton to run in the Southern District against Democrat Tom Blanton, who financed a series of legal actions that overturned an 18 percent rate hike by Mississippi Power to help pay for Kemper. 

Britton is also connected to Barbour through his wife, Robin Robinson, director of organization, development and corporate communication at Sanderson Farms, the third largest poultry producer in the country and a major Barbour financial and political backer.  While governor,  Barbour appointed Robinson to the board of trustees of the state's Institutions of Higher Learning, which oversees public higher education.  Britton spent more than $300,000 on the campaign, an enormous sum for a PSC race, most of which came from his own pocket.  Barbour is thought to have ageed to back Robinson for lieutenant governor in the next election in return for Britton spending so lavishly on his PSC campaign.

All three commissioners have expressed concern that a too-tough stance on Kemper could bankrupt Mississippi Power, an unlikely scenario given past financial support by Southern for its troubled subsidiary. Asked about such a possibility during the earnings call,  Southern's Fanning said he believed that "we will maintain our support for Mississippi Power" and that it's "just not in anybody's interest to consider in any serious way something other than that."

In his remarks to the analysts, Fanning leaned heavily on the argument that low gas prices had suddenly made the coal plant idea economically unsound.  In fact, gas prices were trending far lower than Southern's forecasts when the project was approved by the PSC in 2010,  and opponents argued as far back as 2009 that the plant as proposed was uneconomic given natural gas prices.  

When the PSC held hearings in October 2009 to determine if the state actually needed additional electrical power, the Sierra Club pointed out that Mississippi already had 12 natural gas plants that sat idle 85 percent of the time and could provide up to 7,995 MW of power. Many of these were so-called merchant plants that were for sale for $500 million or less. 

Later, in April 2012, when the PSC reauthorized its approval for Kemper, Louie Miller, director of the Mississippi Sierra Club, complained to a reporter that the project was again being rubberstamped by a compliant PSC, ignoring ultra-low gas prices.

"There is no way they can justify Kemper under current conditions in the energy market," Miller said

 

Industry: 

Coal Lobbyist Jeff Holmstead Disqualified by Federal Judge in Ameren Pollution Lawsuit

  • Posted on: 11 September 2014
  • By: Connor Gibson

Jeff Holmstead, confronted for interfering with climate change solutions, while trying to catch a cab.

Jeff Holmstead, perhaps the nation's prime example of a revolving door lobbyist, was dismissed by a federal judge as an expert witness in a lawsuit brought by the U.S. Environmental Protection Agency against Ameren Missouri, a coal burning utility.

In an ongoing case, the EPA has charged Ameren with violating the Clean Air Act by not installing appropriate pollution controls at one of its coal plants. The Sierra Club has since sued Ameren, "alleging 7,880 air quality violations at three coal-burning power plants since 2009," according to the St. Louis Post-Dispatch.

Judge Rodney Sippel granted U.S. Justice Department's request to remove Holmstead as a witness, confirming that the lobbyist's history at U.S. EPA posed "multiple conflicts of interest." Here's the judge's motion to dismiss Jeffrey Holmstead, citing Holmstead's use of his EPA experience to undermine EPA's pollution enforcement actions (emphases added):

"Mr. Holmstead’s legal opinions are irrelevant, speculative, and inadmissible." [...] "By his own description, Mr. Holmstead’s testimony relies on his recollection of EPA “internal meetings” that he says are relevant to the issues to be tried in this action. Such internal communications are privileged and confidential and Mr. Holmstead may not rely on his recollection of them to testify against EPA. Moreover, Mr. Holmstead received other privileged information concerning the issues about which he now seeks to testify on behalf of Ameren, and participated in power-plants enforcement cases related to this one while at EPA. Before he left EPA, he even personally provided a declaration for EPA that is at issue in this and other related power-plants enforcement cases asserting privilege claims on behalf of EPA over documents that are relevant to the opinions he now seeks to offer. Yet he now seeks to change sides and testify against EPA. Moreover, he was assisted in the preparation of his report by another former EPA attorney who was involved in the early stages of the investigation that ultimately led to the filing of this case. For the reasons discussed in the accompanying Memorandum, Mr. Holmstead should not be allowed to testify in this matter due to his multiple conflicts of interest.

This is a notable blow to Mr. Holmstead's credibility, who touts his time at EPA to obscure his lobbying to protect polluters from public accountability. An anonymous source "familiar" with this case, likely one of Holmstead's colleagues at Bracewell & Guiliani, has been attempting to spin this embarrassing dismissal to reporters at Bloomberg and E&E Publishing. Ameren claims the judge has no proof that Holmstead would use privileged information, ignoring the judge's reference that Holmstead himself said he would use information from "internal meetings" during his time at EPA.

Jeffrey R. Holmstead, a partner at Bracewell & Guiliani who represents coal mining and utility clients like Arch Coal, Duke Energy and Southern Company, spent four years as EPA's assistant administrator for Air and Radiation under President George W. Bush. His career is a dirty legacy of work against the public interest.

Holmstead's tenure at EPA was controversial all the way from his appointment, protested by U.S. Senators for his previous lobbying for coal companies, until his departure. He was caught censoring science within his office and single-handedly derailed a mercury pollution regulation that would have prevented thousands of premature deaths every year. Holmstead's interference blocked mercury pollution controls at U.S. coal plants for eight full years, as Greenpeace has documented, and confronted Holmstead directly for explanation.

While Ameren from his former government employer, Jeff Holmstead has been working to undermine the nation's first ever attempt to limit carbon pollution from U.S. power plants, misleading the public with fears that these rules will increase their utility bills. Holmstead has been repeatedly fact-checked on his conflation of electricity rates with people's bills, ignoring how energy efficiency measures are expected to lower bills over the long term, and also ignoring the immense costs of coal pollution to the public. Holmstead's office runs a front group called the Electric Reliability Coordinating Council (ERCC) to advocate for these polluters against climate and clean air rules, and representing ERCC, he has personally accompanied an Arch Coal lobbyist to the White House to undermine climate regulations.

Again, Greenpeace has directly sought answers from Mr. Holmstead on why he has dedicated his life to protecting companies that not only undermine science, but quite literally kill people as a regular part of their business operations:

It's nice to see a judge finally toss the fox out of the hen house. Jeff Holmstead says what he's paid to, and his clients make that money by polluting for free.

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Industry: 
Company or Organization: 

Meet Ross Bhappu, the money behind coal export proposals on the Columbia River

  • Posted on: 25 February 2014
  • By: joesmyth

The coal industry’s efforts to export huge amounts of taxpayer-owned coal from Montana and Wyoming to Asia has generated unprecedented opposition in the Pacific Northwest - tens of thousands of people have rallied, attended public hearings, and called on their elected officials to oppose coal export terminals that would disrupt and pollute communities and pose one of the biggest threats to the climate of any fossil fuel project in the world.

This controversy, along with the high risk nature of these proposals, has meant that many investors have avoided backing them. A major signal of these investor concerns came in January 2014, when Goldman Sachs dropped its coal export investment, especially since it followed a report from Goldman Sachs’ own analysts titled “The window for thermal coal investment is closing.”

But one key coal export investor apparently hasn’t yet received the memo. Ross Bhappu, a partner at a Denver-based private equity firm called Resource Capital Funds, has been the main source of money for Ambre Energy, the shaky Australian company behind two of the three remaining coal export proposals in Oregon and Washington, the Millennium Bulk Terminal and Morrow Pacific Project proposals on the Columbia River. That’s why ten community and environmental groups wrote a letter to Ross Bhappu last month, calling on him and his firm to drop its investment in Ambre Energy and its controversial and risky coal export proposals.

That’s also why we’ve launched a new website, www.RossBhappu.com. The website details how Ross Bhappu has used a $110 million bet on Ambre Energy - along with the company’s difficulties attracting other outside investment - to take more control of the company at the expense of other shareholders. We want to make sure that elected officials, investors, and communities that would be impacted by coal export projects know who is bankrolling these proposals. So check out the new website, read the details about Ross Bhappu’s bet on coal exports, and help us share the information. We’ll update the site with the latest news, so if you have a tip, let us know.

crossposted from rossbhappu.com

Industry: 
Company or Organization: 

West Virginians impacted by coal chemical spill need water

  • Posted on: 21 January 2014
  • By: JesseColeman

West Virginia Water Crisis: People in Need 10 Days Later

On January 9th, Freedom Industries, a company that stores chemicals for the coal industry, spilled 7,500 gallons of Crude Methylcyclohexanemethanol (MCHM), a little known, little understood compound into the Elk river. The spill occurred one mile upriver from the water intake that supplies tap water for all of West Virginia's capital city of Charleston.

The thick oily chemical was pumped through the water system and into homes and businesses throughout the area, causing vomiting, skin problems, and diarrhea. Now, nearly two weeks since the disaster was discovered, the water has been deemed "safe to drink," though water from the tap still releases a sickly sweet chemical odor, especially when heated.

Pregnant women and children are still advised to drink bottled water, but very few people in the affected area are interested in drinking from the tap, with child or not. The tremendous need for potable water has led to the creation of the West Virginia Clean Water Hub, a community led effort to provide the people of Charleston and the outlying areas with bottled water, a need that government agencies have largely ignored. Sign this petition to demand justice for people whose water has been poisoned

So little is known about 4-MCHM that regulators didn't even know it's boiling point. Now scientists are scrambling to find out how the chemical reacts with the chlorine in the municipal water system, and whether the chemical has leached into water heaters and water pipes in people's homes. Authorities recommend that all pipes that have come in contact with the pollutant be flushed, including water heaters and outdoor faucets. However, West Virginia American Water, the company that owns the water treatment facility contaminated by the coal chemical, is only offering a 10 dollar credit (1000 gallons) to consumers. The cost of flushing homes will therefore fall on already struggling West Virginians, where poverty is rampant and Walmart is the largest single employer.

West Virginians still need fresh water. To donate visit Keeper of the Mountain Foundation.

The affected intake also supplies water to 9 counties surrounding Charleston, which contain multiple rural communities, like the small community of Pratt. Pratt was added to Charleston's municipal water system only two months ago. This was initially celebrated by the residents of Pratt, because it meant relief from the extremely poor quality water from local sources, which have been contaminated by Acid Mine Drainage, coal dust, and other coal industry impacts.

Water contamination from the coal industry is nothing new to West Virginians, who have lived with poisoned wells streams for generations. This spill, the latest and most dramatic in a long history of water contamination, exposes the problems of lax and inadequate regulation coupled with politicians that prioritizes the bottom line of the coal industry over the health and safety of people. The chemical 4-MCHM was exempted from federal laws that require disclosure. The tanks that held the chemical were not required to be inspected regularly, due to a loophole that exempted above ground tanks from inspection.

Crews continue to work on the site of contamination at Freedom Industries.

West Virginian politicians with close ties to the coal industry have continued to defend coal companies from federal and state regulation, even as 300,000 of their constituents went without drinkable water.  Speaking at an event hosted by the coal front group American Coalition for Clean Coal Electricity (ACCCE) last week,  Joe Manchin, West Virginia’s junior senator and former governor continued to defend the coal industry from reglation. “Coal and chemicals inevitably bring risk — but that doesn’t mean they should be shut down,” said Manchin. “Cicero says, ‘To err is human.’ But you’re going to stop living because you’re afraid of making a mistake?” Manchin has significant financial ties to the coal industry.

The current governor of West Virginia, Earl Ray Tomblin, was also quick to defend the coal industry. In a press conference days after the spill, he said "“This was not a coal company.  This was a chemical supplier where the leak occurred.  As far as I know, there are no coal mines within miles of this particular incident.” Governor Tomblin's remarks ignore the fact that many communities affected by this spill are only using municipal water because local sources have already been poisoned by coal extraction and use. Tomblin also ignored the fact that Freedom Industries' product is a necessary part of the coal extraction and burning process.

To donate water to West Virginians, please visit the Keeper of the Mountain Foundation.

To volunteer or request clean water, visit the West Virginia Clean Water Hub.

Wes Virginia coal chemical spill

 

Industry: 

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 more...now 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.

Industry: 

Duke Energy Ties to Gov. McCrory Increase Concerns over SB10 Proposal to Fire NC Utilities Commission

  • Posted on: 13 February 2013
  • By: Connor Gibson

This guess post was written by Sue Sturgis for the Institute for Southern Studies' online magazine, Facing South.

This is a critical moment for North Carolina's energy future, as a packed public hearing held in Raleigh this week showed -- and there are growing concerns that the politician who might get to make key decisions about it has significant conflicts of interest.

On Monday, Feb. 11, about 180 people attended a N.C. Utilities Commission (NCUC) hearing on Duke Energy's plan for meeting its customers' power needs over the next two decades. Dozens of citizens testified against Duke's proposed Integrated Resource Plan, which calls for generating most of its energy from polluting sources: dirty coal plants (24 percent), natural gas plants (29 percent), and risky nuclear plants (29 percent). Efficiency would account for only 4.5 percent of Duke's generation mix, while wind and solar would make up only 2.25 percent. The plan would cost Duke's customers dearly, as the company -- which supplies electricity to over 95 percent of North Carolina customers since its merger with Progress Energy -- would quadruple rates within a decade.

Speaker after speaker called on commissioners to require Duke to increase its generation from renewable sources such as solar and to encourage greater efficiency. Many of those who testified cited the urgency of acting now, pointing to mounting signs that the climate has already been dangerously disrupted by unchecked greenhouse gas pollution.

"What are we waiting for, the next tragic super storm to strike?" asked Avram Friedman, executive director of the Canary Coalition, a nonprofit that advocates for clean air in western North Carolina. "What is it going to take for you to act in the public interest?"

But there are mounting concerns that the public interest will get even less consideration if North Carolina's legislature gets its way and gives Gov. Pat McCrory (R) sole control over the commission's membership.

A controversial bill recently introduced in the General Assembly would sweep out the current members of key state regulatory commissions including the NCUC and replace them with members appointed by the governor and/or the legislature. In the case of the NCUC, Senate Bill 10 specifies that the new appointments would be made by the governor and confirmed by the legislature. It would also downsize the commission from seven members to five. The bill has already passed the Senate and is now advancing through the House, both of which are controlled by veto-proof Republican super-majorities.

State Sen. Bill Rabon (R-New Hanover), one of the bill's primary sponsors along with Sens. Tom Apodaca (R-Buncombe) and Neal Hunt (R-Wake), told the Senate Rules Committee that the bill streamlines state government and allows key boards to be run by appointees who "are more like-minded and willing to carry out the philosophy of the new administration," as The News & Observer reported.

However, some watchdogs are protesting what they call "an unprecedented conflict of interest" created by the legislation because of McCrory's unusually close ties to Duke Energy.

In addition to having received generous campaign contributions from Duke Energy (the company, its political action committee, employees, and their families donated over $240,000 to McCrory's 2008 and 2012 gubernatorial campaigns and to the state Republican Party since he became the party's nominee, according to a recent report by the liberal advocacy group Progress NC), McCrory worked for the company for 28 years, starting out digging ditches and eventually making his way to a position as senior adviser with Duke's Business and Economic Development Group before retiring in 2007 to run for governor.

Because of that employment history, the clean-energy advocacy group NC WARN last month joined with the state AARP to ask the governor to recuse himself from making appointments to the commission and from appointing a new Public Staff director to represent consumers in utility cases because of his longtime association with Duke. This week NC WARN sent a letter to McCrory raising concerns about the commission overhaul proposal.

"If the bill passes, you would be required to appoint all the members of the Utilities Commission," NC WARN Executive Director Jim Warren wrote in the Feb. 11 letter. "The public perception would be inescapable that Duke Energy had captured its regulator, and had done so with the Governor's assistance."

But the governor's financial ties to the utility giant are not merely historic: Though he's no longer employed by Duke Energy, McCrory continues to hold a significant financial stake in the company. His latest statement of economic interest filed with the N.C. Ethics Commission and posted to the Indyweek.com website discloses that he holds stock in Duke valued at a minimum of $10,000. North Carolina ethics rules do not require reporting the exact value of the investment.

Notified of the holdings, Warren said they are "just more evidence that the governor has an unprecedented conflict of interest."

McCrory's history of conflicts

This is not the first time concerns have arisen over potential conflicts of interest related to McCrory's close ties to Duke Energy, as Facing South reported back in 2008.

In 1994, while working for Duke and serving as an at-large city councilman and mayor pro tem in the company's hometown of Charlotte, McCrory chaired a council meeting and voted on a matter that directly affected Duke's finances. City of Charlotte v. Cook involved Charlotte's efforts to condemn private farmland to build an underground water pipe for a project that would enable the city to purchase power from Duke instead of the electric membership corporation that was the authorized provider for that location.

The case eventually ended up in state Supreme Court. Though the court majority ultimately ruled there was no wrongdoing by the city, a dissenting opinion by Justice Beverly Lake Jr., a Republican, pointed to a conflict of interest on McCrory's part:

The record evidences multiple Duke Power internal e-mail messages and memoranda reflecting that Duke Power and the City collaborated to have the City acquire a fee simple title to the property in order that Duke Power could provide the power to the plant. These e-mail messages indicate that the mayor pro tempore of the City, an employee of Duke Power, as well as the project director had contact with Duke Power officials and discussed condemning a fee simple interest for the project. The mayor pro tempore chaired the 12 September 1994 City Council meeting where the subject of condemning a fee simple was discussed, and he voted in favor of a fee simple condemnation.

McCrory filed an affidavit saying he would not have participated in the meeting if he had known Duke was involved. However, the court pointed to evidence that McCrory did in fact know Duke was involved -- though it ruled that "an ethical problem involving the Council has to rise to a much higher level than this one for us to upset a decision by the Council."

In another action that raised conflict of interest concerns, McCrory went to Washington, D.C. in 1997 to testify as Charlotte mayor against federal clean air regulations for the city that would have cost his employer Duke Energy an estimated $600 million. As a local paper reported at the time:

When asked about a possible conflict of interest arising from his appearance on Capitol Hill as Charlotte's mayor to testify about a matter that would directly affect his employer, Duke Power (where he serves as manager of business relations), McCrory replied, "No, in fact it's quite beneficial because I'm very knowledgeable on the subject."

In the letter it sent to McCrory this week about the latest conflict of interest concern, NC WARN asked the governor to oppose the NCUC provision in the commission overhaul bill and to call for it to be removed from the House version of the legislation. It also asked McCrory to state that, should the section pass in spite of his opposition, he would appoint an independent panel to recommend candidates for the NCUC and abide by its recommendations.

If he fails to do so, NC WARN's Warren wrote, McCrory risks further alienating the people from the government that's supposed to serve them:

The Utilities Commission provisions of the bill would set the precedent that whenever legislative leadership and the governor changes party, the seated commissioners would be thrown out and replaced. It would do away with the Commission's institutional legitimacy as well as its knowledge base and continuity gained by handling its highly complex legal, technical, and policy issues. The public, already skeptical that utility regulation is in the public's interest, would see the Commission as just a rubber stamp wielded by politicians and their utility industry backers. Instead of bolstering faith in the integrity and effectiveness of state government, the bill would take cynicism to a new level.

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Coal Miners in Romney TV ads were forced to attend rally

  • Posted on: 25 September 2012
  • By: Aliya Haq

Last week, Greenpeace posted a comparison of Romney’s new “War on Coal” TV ads with coal industry advertising. Our analysis shows that Romney’s ads mirror four decades of coal industry advertising. 

It turns out that the coal industry is not only providing Romney with talking points for his TV ads, but also with human props. The Romney “War on Coal” TV ad features the candidate speaking in front of a crowd of coal miners. Murray Energy Company forced these miners to miss a day of work without pay, and told them that attendance was mandatory at the Romney event. On Tuesday, Progress Ohio filed an FEC complaint over the use of coal miners in the Romney TV ad. "Clearly the [Romney] campaign should have thought better of exploiting the forced support of these workers,” said Brian Rothenberg, Executive Director of ProgressOhio.

The TV ad is running in coal states, including Ohio and West Virginia. In the ad, Romney declares “we have 250 years of coal! Why wouldn’t we use it?” Greenpeace analysis revealed that this estimate is frequently used in coal advertising, even though the National Academy of Sciences shows it to be vastly overestimated.

Romney's "War on Coal" TV ads mirror coal industry advertising

  • Posted on: 21 September 2012
  • By: Aliya Haq

Mitt Romney released new TV ads this week about Obama “ruining” the coal industry, conveniently timed with a sudden House Republican push for the so-called “Stop the War on Coal Act.”  

 

A Greenpeace investigation released last week highlights the recurring themes of Big Coal advertising, with decades of ads from coal mining companies, coal-burning utilities, and industry front groups. The Big Coal industry advertising machine has been working for decades to “keep America stupid,” as Rolling Stone put it.  

This week’s political messaging about a supposed “war on coal” illustrates a troubling trend that the Big Coal public relations machine is co-opting America's elected leaders.

New Romney TV ads on coal mirror the industry’s old and new ads

One of Big Coal’s main advertising themes since the 1970s has been abundance of coal and energy security. Romney's new TV ad highlights this theme, featuring a stump speech clip with Romney declaring “We have 250 years of coal! Why wouldn’t we use it?” 

The 250-year coal supply figure is an extreme overestimate, since US coal reserves can only be confirmed to last about 100 years, according to a National Academy of Sciences report five years ago. So, where did Romney get that number?

Maybe Romney got it from this coal industry front group advertisement, claiming that using less coal will make  dictators smile. Check out the ad up close

Or maybe Romney got the 250-year claim out of this internet ad from ACCCE, the coal industry’s public relations association. 

Coal industry estimates of incredible abundance are notoriously incorrect. At least Romney’s estimate was slightly more accurate compared to this National Coal Association ad from 1977, claiming coal would last 500 years. In 1976, an American Electric Power ad used the 500-year coal supply along with an estimate that America would run out of oil and natural gas by 1988. People say hindsight is always 20/20.

Not only does the coal industry provide talking points for Romney’s stump speeches and TV ads, but it also provides the human props. The Romney TV ad features shots of the candidate speaking with a crowd of coal miners behind him. Murray Energy Company forced these miners to miss a day of work without pay, and told them that attendance was mandatory at the Romney event.

 

Obama also influenced by Big Coal advertising

Unfortunately, the Republican candidate is not the only one susceptible to coal industry public relations. The Obama campaign aired radio ads criticizing Romney for saying a dirty coal plant “kills people” when he was Governor of Massachusetts. Obama has made so-called “clean coal” and CCS technology part of his energy platform. As a way to keep their industry alive, Big Coal invests heavily in “clean coal” advertising, even though the touted CCS technology that captures carbon dioxide is unproven at scale and exorbitantly expensive. Check out this nonchalant Peabody Energy ad from 2009.

 

The clean coal advertising theme existed decades before CCS technology, when simply “washing” coal meant that it was now “clean,” like in this AEP ad from 1979.

Congress is another vehicle for coal industry public relations

The coal industry advertising doesn’t only influence presidential politics. Republicans in the House Friday morning passed the so-called “Stop the War on Coal Act.” The Act is several coal-friendly bills packaged into one big wish list for the coal industry, including stripping EPA authority to regulate greenhouse gases, restricting EPA from regulating coal ash and delaying the EPA mercury rule. The bill package will be dead-on-arrival in the Senate. 

The Act provided Republicans with the opportunity to lambast the EPA for protecting public health from coal pollution. As two Republicans wrote in a Sept 20th op-ed, “President Obama and his extreme EPA have issued new rules and regulations that are crippling the coal industry” and “this ‘Train Wreck’ of new EPA regulations is already…costing jobs in places where unemployment is staggering.” 

Considering that energy experts will tell you that competition from renewable energy and natural gas are actually causing the decline in coal, why are these Republicans so focused on EPA regulations? One could list several political reasons but, coincidentally, blaming the EPA has been a regular theme for Big Coal advertising since Nixon established the EPA in the 1970s.

In this 1974 ad, EPA is blamed for blocking the use of coal which somehow, in a bizarre twist of logic, would result in Middle Eastern oil moguls buying American coal fields from under our noses. 

Another 1974 American Electric Power ad criticized EPA for encouraging the use of pollution scrubbers on coal plants. In comparison, the coal industry now celebrates scrubber technology for making coal “clean" while still attacking the EPA for new clean air rules. This ACCCE internet ad claims the EPA will cost 1.65 million jobs. 

Coal advertising themes like "coal is abundant," "coal is clean," and "EPA kills jobs" are completely integrated now into Presidential and Congressional debates. After decades of Big Coal advertising efforts, some of our elected officials have mutated into Big Coal spokespeople.

Record amounts of ad spending by dirty energy industries, same old deceptions

  • Posted on: 14 September 2012
  • By: JesseColeman


This year, the oil, gas and coal industries combined have spent more than $153 million on ads promoting fossil fuels and attacking renewables, according to the New York Times. That’s almost four times the amount spent on clean energy advertising in the same time frame.

It’s also a third more than was spent by the fossil fuels industries in 2008. 

So what message is worth the record amounts of advertising dollars?

Well, as it turns out, the fossil fuel industries really don’t like regulation, the EPA, or president Obama, and they want the voting public behind them. 

Though the dirty energy industries’ dislike of Obama seems a bit misplaced, (between allowing widespread fracking and his support of drilling offshore and in the arctic, Obama has given the fossil fuel lobby plenty) it does make sense that they would support Mitt Romney.  After all, Romney is not concerned with “healing the planet,” and neither are the oil and coal corporations of America. It’s a natural fit.

However, the majority of the fossil fuel funded commercials are actually repeats of the same messages that the Big Coal and Big Oil have been trumpeting for years.

A recent Greenpeace investigation in to coal advertising over the last 40 years has found that the fear mongering and hysterical accusations made today by coal companies – that regulations kill jobs or coal can be “clean” for instance – are literally decades old.  

The American Coalition for Clean Coal Electricity (ACCCE), a coal front group, has spent $12 million dollars so far this year on ads that, except for being in color and on youtube, could have been straight from 1970.

“The stakes are high,” said Steve Miller, the recently retired president of ACCCE. Well, hopefully Mr. Miller is high if he thinks people will buy the same tired deceptions that the coal industry has been threatening us with for years.

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