Coal industry kicks own goal as Obama calls bluff on CCS

When the United States Environmental Protection Agency (EPA) announced on Saturday (Australian time) that any new coal fired power station must be fitted with Carbon Capture and Storage (CCS) technology, you would have thought the coal industry would have been ecstatic.

After all, for years the coal industry has been the biggest cheerleader for CCS, a technology for extracting carbon dioxide from coal-fired power station emissions and dumping it underground. When critics of CCS such as Greenpeace argued that the technology was unproven and mega-expensive, the coal industry disagreed.

But now Big Coal just can’t seem to get its story straight about whether it loves or hates CCS.  Instead of celebrating the US EPA’s announcement, the US coal industry is outraged. Peabody Energy, which has mines in both Australia and the US, thundered that CCS “is simply not commercially available”. The National Mining Association complained of “potential high cost” for such “theoretical“ systems.

“Carbon capture is a pipe dream”, said FreedomWorks, the influential right wing think tank that is credited with forming the Tea Party and is one of Big Coal’s noisiest backers.

“Never before has the federal government forced an industry to do something that is technologically impossible,” said Democrat Senator Joe Manchin, who represents the coal state West Virginia in Washington and is its former governor.

Industry threats of legal challenges are flying thick and fast.

The impact of the new rule is likely to be minimal as most of the over 230 new coal plants proposed in the US over the last decade have been defeated by community pressure or withered from financial pressures.

While the electricity market has largely moved on from building new coal plants, the EPA announcement is a bold marker that it is likely to be all downhill for the US coal industry from here. With the accelerating retirement of old coal plants in response to legal challenges and high costs and strong opposition to new coal export ports, the US coal industry is besieged.

The US coal industry opposition to the new EPA rule puts the Australian coal industry in an impossible position.

When in 2009 the Australian Coal Association (ACA) was opposing the emissions trading scheme proposed by Kevin Rudd, it blitzed Australia with advertisements proclaiming that CCS was a “practical solution” which “can make a real difference.”

In March 2012 Megan Davison, the executive director of the Victorian division of the Minerals Council of Australia (MCA), went so far as to claim that ‘clean coal’ technologies could happen “in the blink of an eye.” The ACA and MCA both represent companies such as Peabody Energy, Rio Tinto and BHP Billiton which – either directly or via their industry associations – are now ridiculing CCS in the US.

If CCS is the expensive fantasy the US mining insists it is then the Australian coal industry’s PR cover for coal exports has been blown. The message is clear: CCS will do nothing anytime soon to curb the global warming contribution from Australia’s growing coal exports. And for Treasurer Joe Hockey it just became a whole lot easier to end taxpayer handouts for further R&D work on CCS.

Bob Burton is co-author with Guy Pearse and David McKnight of Big Coal: Australia’s dirtiest habit (NewSouth Books, August 2013). He is also a Contributing Editor of CoalSwarm, a coal wiki and a director of The Sunrise Project, an Australian group promoting a renewable energy economy).