Positive Environment News

Coal Industry To Obama: Friend Or foe?

Date: 12-Feb-09
Country: US
Author: Steve James - Analysis

NEW YORK - President Obama appears committed to developing clean coal technology and his administration might not be as opposed to the fossil fuel as the industry feared, analysts and mining experts say.

Coal producers, blamed by environmentalists for causing global warming through carbon emissions, were wary of a new administration pledging to advance alternative energy sources.

The miners watched as Nobel laureate Steven Chu, the new head of the Energy Department, called coal -- that generates half America's electricity -- "my worst nightmare."

And Carole Browner, who will coordinate White House policy on energy, climate and environmental issues, and who headed the Environmental Protection Agency under Bill Clinton, is an advocate of the Kyoto Protocol to combat climate change.

Even Interior Secretary Ken Salazar, who is responsible for drilling and mining leases on federal land, was a former environmental lawyer and architect of Colorado's land conservation program, who forced mining and oil operations to protect the environment.

But under Obama, those positions may not be so hard and fast and the coal industry could benefit in the long-term, the observers believe.

"A fair amount of investors have the notion that ... Obama is anti-coal," said Jeremy Sussman, an analyst with Natixis Bleichroeder. "We believe that those investors are misguided."

The appointment of Salazar signals that Obama "is serious about creating a widespread carbon capture and storage program, where coal would continue to be a major part of the U.S.' future energy equation."

"I think it would be scarier having an Al Gore or a (Senator) Barbara Boxer in Obama's position," Sussman later told Reuters. "They would have a one-track view. Obama is mindful of environmental issues, but also the economy and the importance of coal to labor."

President Bush was more polarizing, Sussman said, since he often did not consider environmental arguments.

"Ironically, Bush's pro-business position set back coal and made it harder for coal plants to get built," he said.

The National Mining Association, an industry group of mine companies, was also impressed with Obama's view of coal.

"We are encouraged by the approach he is taking and resisting the temptation to satisfy the anti-coal Jihadists," said NMA spokesman Luke Popovich.


Obama has walked a fine line with U.S. power-generating needs in the face of global warming. He has called for investment in solar and wind, but has also stressed how much coal mining contributes to the economies of several states, including his own, Illinois.

The $800 billion economic stimulus package pending in Congress includes tax breaks and incentives to boost renewable energy. But it also includes funds -- $2.4 billion in the House version and $4.6 billion in the Senate version -- for carbon capture and sequestration technology to reduce emissions from coal-fired power plants, the NMA's Popovich noted.

"That signals an interest in keeping clean coal funding and to get on with ... solving global warming in a rational way," Popovich added.

He said that might also mean the administration could restore funding for the $1.8 billion FutureGen clean-coal plant planned for Illinois that was yanked last year.

Jim Thompson, editor of the industry newsletter Coal & Energy Price Report, said Obama was being tugged in two directions by the environmentalists and the coal advocates.

"There are indications that Obama himself is more favorably disposed to coal than his appointments suggest," Thompson said.

"Some in the past have been virulently anti-coal, but consider the state of the economy. Can we afford to change a fundamental industry and destroy jobs in areas where there are no other jobs?"

He said of Obama's appointments: "Salazar is viewed a little more favorably."

During his confirmation hearing, Salazar was asked about coal.

"The fact of the matter is it powers much of America and there are lots of jobs it creates," he said.

"The challenge is how we create clean coal. I believe that we will move forward with the funding of some of those demonstration projects so we can find ways to burn coal that don't contribute to climate change."

Most coal producers declined to comment on Salazar, but Steve Leer, chairman and chief executive of Arch Coal Inc said in a statement: "We have a great deal of respect for Secretary Salazar's balanced approach.

"We often worked with him on natural resource issues when he was in the Senate and we are confident that the Secretary will provide strong and effective leadership in this important new role."

(Editing by Andre Grenon)

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