by Dan Watkiss, Bracewell & Giuliani
Much has been written commending energy policy to the incoming Obama administration. Joining the chorus, I encourage the new administration to make reducing worldwide emissions of climate-changing gases a guiding principle of every aspect of its domestic energy policy. Even if the United States succeeds in reducing proportionately its own greenhouse gas (GHG) emissions to sustainable levels, averting potentially catastrophic climate change will still require worldwide implementation of innovative technologies such as the capture and sequestration of carbon dioxide (CO2) to be developed in connection with the coal-fired FutureGen project. These technologies can then be exported from the U.S. and other industrialized countries to China, India, South Africa and the other converging economies of the developing world.
Emphasis on worldwide should not suggest agreement with the 1997 Byrd-Hagel Resolution opposing any climate-change protocol that does not include the same or comparable binding targets and timetables for the world’s developing and industrialized nations. And neither is it an endorsement of the Bush administration’s opposition to U.S. ratification of the Kyoto Protocol because of the initial exemption from emission reductions granted to China (now the world’s largest gross emitter of CO2) and other developing nations.
Atmospheric GHGs wherever emitted in the world equally cause climate change. Industries from developed countries emitted the lion’s share of those gases during the past hundred-plus years; per capita they continue to. These facts dictate different paths for developing and industrialized countries in the common cause of stabilizing and then reducing atmospheric GHGs.
Different treatment fairly acknowledges different historical contributions to the problem—what China and India have accurately described as a -common but differentiated responsibility. For this reason, both of these developing giants have resisted committing to reductions below a historical baseline, such as Kyoto imposed on industrialized nations. Instead, they insist on reductions below the increased emissions that would otherwise attend their industrial convergence with developed nations.
Contrary to assumptions underlying Byrd-Hagel and the Bush administration opposition to Kyoto ratification, different treatment need not economically disadvantage the United States. Developed countries’ leadership in reducing their GHG emissions is both fair and replete with opportunities for the U.S. in particular among industrialized nations. In relation to the largest developing emission sources—China and India—these opportunities appear to be greatest in the development of cleaner-coal technologies, such as FutureGen, since coal is the most readily available conventional energy resource in these developing countries as well as the U.S. (Following the lead of John Holdren, co-chairman of the National Commission on Energy Policy, I do not use the euphemism -clean coal because -there is no such thing as clean coal but only technologies that can make its use -cleaner.)
President Obama has committed to implement a national cap on GHG emissions that will return the U.S. to 1990 emissions by 2020 and 80 percent below 1990 emissions by 2050. These objectives are in line with the reductions that peer-reviewed climate science indicates are necessary for the U.S. and the world to stabilize global warming and avert exceeding a temperature tipping point. But U.S. reductions, particularly in the next 20 to 25 years—the period deemed most critical to arresting climate change—could be more than erased by emission increases from the converging economies, like China, or so-called European economies in transition (EIT), like Poland, whose economic convergence will continue to be fired in the near term by abundant and accessible coal reserves.
The case of China unambiguously illustrates that no nation is an island when it comes to anthropogenic GHGs and climate change. Burning coal meets approximately 70 percent of China’s electric power needs (in comparison with approximately 50 percent for the U.S). In 2006, China surpassed U.S. CO2 emissions (6,200 million tons vs. 5,800 million tons). Yet China’s huge population per capita emits only 25 percent as much CO2 as the U.S. Economic convergence could entail a tripling or quadrupling of China’s CO2 emissions under a business-as-usual scenario in which China would power its industrial development just as the U.S. and Europe did before it. Comparable trajectories confront other developing economies such as India, Mexico, South Africa and Indonesia, among others. By 2020, more than 60 percent of anthropogenic GHG emissions are expected to come from developing countries.
For China and other developing economies (and likely for the U.S. and other industrialized nations), abandoning coal in the near term is not viable. That is why the U.S. and the industrialized world must expedite research, development and implementation of cleaner-coal technologies. The U.S., perhaps more than any industrialized nation, is uniquely suited to lead this effort. Cleaner coal and FutureGen involve capturing CO2, transporting it (probably by pipeline) and storing it (probably geologically). The public-private 275 MW FutureGen project (until recently scuttled for apparently political and not technical or economic reasons) was the most advanced cleaner-coal project in the world. It would have combined at one location coal gasification, emissions controls, hydrogen production, electricity generation and carbon capture and storage. Equally important, FutureGen is poised to build on a long U.S. technical and legal history of carbon capture in the food-processing and oil-production industries, as well as transportation and geologic injection and storage in connection with enhanced oil recovery.
There was no progress in this regard from the lame duck Bush administration, which only in February 2008 cancelled $1.2 billion in federal funding for FutureGen. The Bush administration’s obstructionist delegates (by the time this column is published) will have represented the U.S. for the last time in the climate negotiations in Poznan, Poland, which are to lay the groundwork for the post-Kyoto international framework. But a commitment to cleaner-coal technology, including FutureGen, and its export to the converging and EIT economies of the world should be a central plank of the Obama administration when it takes over climate negotiations for the first time next December in Copenhagen.
Dan Watkiss is a partner with Bracewell & Giuliani in Washington, D.C., representing power companies, exploration and production and mid-market companies, natural gas pipelines, power and liquefied natural gas project developers and lenders, as well as government agencies and regulators. You may reach him at Dan.Watkiss@bgllp.com.
EL&P was notified by Dominion about inaccuracies in its EIA-906 reports filed for 2007. Because this report data was used to compile tables printed in EL&P’s November/December 2008 article -2007 Operating Performance Rankings, Table 3: Top 20 Coal Generators Ranked by Heat Rate (2007) was incorrect.
Eight Dominion coal-fired generating stations were listed among the U.S. top 20. According to Dominion, it is likely that no Dominion unit would qualify for the top 20 had accurate data been reported to the U.S. Department of Energy (DOE).
Dominion is working with the DOE to correct by March its 2007 reports in the DOE database.
Dominion and EL&P regret that qualified units at other utilities were not given deserved recognition because of this error.