Peabody Energy says White House needs to do more to support coal

Peabody Energy (NYSE: BTU), the nation’s largest coal producer, on Jan. 20 called on the Obama Administration to support technology solutions with advanced coal as vital to protecting America’s supply of clean, low-cost electricity.

Peabody Energy Chairman and Chief Executive Officer Gregory H. Boyce said: “It’s unacceptable that we as a nation would allow growing pain at the plug to replace the pain  at the pump that has been recently eased by falling oil prices. If we are really serious about providing clean, low-cost electricity, we should be doing everything we can to support broader use of advanced coal technologies.”

Coal is the nation’s most abundant energy resource, supplying 40% of U.S. electricity at the lowest cost of any major fuel. Maintaining affordable energy access is especially important at a time when more than half of Americans have said as little as a $20 increase in their utility bills would create hardship and nearly one-third of the population, a record 115 million Americans, qualify for low-income assistance with energy bills. Peabody noted.

The Obama Administration should reverse its “ill-advised” power plant proposals, which will force soaring power costs on American families, said Peabody. One recent study concluded that the Administration’s series of power plant regulations would cause nearly $700 in annual power and natural gas increases for the typical household in 2020 compared to 2012. These costs would continue to increase year after year.

The clear path to achieve our economic and environmental goals is continued use of advanced “supercritical” coal-fired generation, which is being broadly deployed and is available off-the-shelf, Peabody said. These highly efficient, commercial technologies are essential to accelerate the transition to low-carbon, high-efficiency energy systems around the world. Each large plant also delivers an equivalent CO2 benefit of removing 1 million cars from the road. Longer term, next generation carbon capture use and storage (CCUS) should be prioritized for commercialization along with development of a clear legal and regulatory path, Peabody added. CCUS should enjoy the same incentives as all energy sources.

The U.S. carbon-based economy also benefits dramatically from coal, which enables modern conveniences that improve health, longevity and quality of life, said Peabody. A study on the “social cost of carbon” concludes that the benefits from fossil fuel energy outweigh the so-called cost of carbon by a magnitude of 50 to 500 times, based on empirical data versus modeled predictions.

President Barack Obama, in his Jan. 20 State of the Union address, made passing references to electric power, saying: “2014 was the planet’s warmest year on record. Now, one year doesn’t make a trend, but this does: 14 of the 15 warmest years on record have all fallen in the first 15 years of this century. I’ve heard some folks try to dodge the evidence by saying they’re not scientists; that we don’t have enough information to act. Well, I’m not a scientist, either. But you know what, I know a lot of really good scientists at NASA, and at NOAA, and at our major universities. And the best scientists in the world are all telling us that our activities are changing the climate, and if we don’t act forcefully, we’ll continue to see rising oceans, longer, hotter heat waves, dangerous droughts and floods, and massive disruptions that can trigger greater migration and conflict and hunger around the globe. The Pentagon says that climate change poses immediate risks to our national security. We should act like it.

“And that’s why, over the past six years, we’ve done more than ever to combat climate change, from the way we produce energy to the way we use it. That’s why we’ve set aside more public lands and waters than any administration in history. And that’s why I will not let this Congress endanger the health of our children by turning back the clock on our efforts. I am determined to make sure that American leadership drives international action.
“In Beijing, we made a historic announcement: The United States will double the pace at which we cut carbon pollution. And China committed, for the first time, to limiting their emissions. And because the world’s two largest economies came together, other nations are now stepping up, and offering hope that this year the world will finally reach an agreement to protect the one planet we’ve got.”

The American Council for Clean Coal Electricity said Jan. 20 that President Obama missed a momentous opportunity to reverse his “dangerous” regulatory regime and restore balance and affordability to the nation’s energy mix. Instead, he used the State of the Union to boast about the purported “successes” of his climate change regulations, the coalition said.

“In his State of the Union address tonight, President Obama failed to offer answers about the calamitous consequences of his environmental regulations. Rather than seek a commonsense energy plan for America, President Obama bypassed Congress and is forging ahead with his climate crusade at the expense of the nation’s economic security,” said Mike Duncan, president and CEO of the coalition. “President Obama demonstrated again tonight just how far he is willing to go to appease deep-pocketed donors, while hard-working Americans are left out in the cold without the means to help make ends meet.”

ACCCE on Jan. 20 launched a new campaign—#ColdInTheDark—to highlight cost and reliability implications stemming from EPA’s full suite of regulations, including the Clean Power Plan proposed last June for existing power plants. Research from NERA Economic Consulting revealed significant negative economic impacts resulting from the Clean Power Plan, including double-digit electricity cost increases for 43 states, compliance costs totaling $366bn or more and less reliable electricity as a result of widespread coal retirements, the coalition said.

“This evening, the president faced a new and energized Congress that has vowed to rein in the EPA and put an end to his administration’s overreaching regulatory agenda. At such an important moment, lawmakers across the country must stand firm in their opposition against regulations that attack the well-being of their constituents and economies,” added Duncan.

About Barry Cassell 20414 Articles
Barry Cassell is Chief Analyst for GenerationHub covering coal and emission controls issues, projects and policy. He has covered the coal and power generation industry for more than 24 years, beginning in November 2011 at GenerationHub and prior to that as editor of SNL Energy’s Coal Report. He was formerly with Coal Outlook for 15 years as the publication’s editor and contributing writer, and prior to that he was editor of Coal & Synfuels Technology and associate editor of The Energy Report. He has a bachelor’s degree from Central Michigan University.