Senate Democrats Put Climate Bill on Back Burner

A recent Politico.com story reports that Senate Democrats have “pulled the plug on climate legislation ... pushing the issue off into an uncertain future ahead of midterm elections where President Barack Obama’s party is girding for a drubbing.”

Rather than pursue a larger bill containing carbon caps or renewable electricity standards, Senate Democrats are reported to be preparing a bill calculated to gain bi-partisan support – one that would contain “low-hanging-fruit provisions dealing with the oil spill, Home Star energy efficiency upgrades, incentives for the conversion of trucking fleet to natural gas and the Land and Water Conservation Fund.”

A complete copy of the story is available at: Politico.com.

U.S. Rare Earths Gaining Bipartisan Support in House, Senate

Rep. Bart Gordon (D-Tenn.), chairman of the House Science and Technology Committee, said last week he will consider legislation this month to ensure sufficient supplies of rare earth minerals or their substitutes are available from domestic production.

In related action, yesterday Sens. Lisa Murkowski (R-Alaska), ranking member of the Energy and Natural Resources Committee, and Evan Bayh (D-Ind.) wrote a letter signed by 20 senators urging Energy Secretary Steven Chu to consider using the department’s loan guarantee program to “accelerate the redevelopment of these critical manufacturing capabilities” and to make certain the nation’s economy and national security are not “jeopardized by a rare earth supply shortage.”

Rare earth metals – a group of 17 elements essential for wind turbines, energy efficient light bulbs, catalytic converters and other technologies – are primarily sourced from China, which last week announced it would cut its rare earth exports by 72 percent for the balance of the year. China accounts for 97 percent of global rare earth production and has cornered the world market on processing and supplying these metals.

Rep. Gordon recently urged EU leaders to engage in joint research into strengthening the supply chain for rare earth metals. Earlier this year, Gordon highlighted the importance of these metals and urged Congress to address the issue as China signaled its growing domestic need of the supply it formerly exported. “We want to look into ways that ... these minerals – particularly here in our country – can be both discovered as well as mined and processed more efficiently,” said Gordon.

There is growing bipartisan congressional interest in securing supplies of rare earth metals. This spring, Rep. Mike Coffman (R-Colo.) introduced legislation that would authorize new assessments and programs to establish a domestic rare earth supply chain. Under his bill, H.R. 4866, a federal working group would be formed to study strategic needs, create a national rare earth stockpile, evaluate international trade practices and facilitate loan guarantees for U.S. suppliers.

NMA supports congressional efforts that focus on developing U.S. rare earth supplies from its ample reserves of these metals, especially as changing trade patterns raise questions about the availability of imports sufficient to meet the nation’s growing needs for these metals. NMA has used the growing interest in rare earths to advocate for a more comprehensive policy favoring domestic mineral mining.

A complete copy of the Murkowski-Bayh letter is available at: Murkowski-Bayh letter.

NMA Applauds Bipartisan Measure to Accelerate Development
and Early Deployment of CCS Technology

National Mining Association (NMA) President and CEO Hal Quinn released the following statement in support of the “Carbon Capture and Sequestration Act of 2010” introduced today by Sens. Jay Rockefeller (D-W.Va.) and George Voinovich (R-Ohio). The measure would help the private sector accelerate development and early deployment of carbon capture and storage (CCS) technology in the United States by providing a wires charge-funded $20 billion over 10 years, expanding the Department of Energy’s loan program and establishing a regulatory framework to monitor and govern geological storage of CO₂.

“With the world’s largest reserves of secure domestic coal meeting half the nation’s electricity needs, the U.S. has a strategic interest in developing advanced clean coal technology. Carbon capture and storage (CCS) technology will enable U.S. power plants to not only neutralize carbon emissions from coal combustion but also to continue providing American households and industries with affordable electric power and high-wage employment from coal production.

“Sens. Rockefeller and Voinovich have taken an important leadership role in providing the necessary financial incentives and a much-needed regulatory framework to facilitate the development and early deployment of this vital technology. The bill not only provides a pathway for continued energy independence in meeting our electricity needs, it also will create much-needed jobs across America.

“The National Mining Association looks forward to working with Sens. Rockefeller and Voinovich on this important legislation.”

Sen. Rockefeller Set to Propose Two-Year Delay
on EPA Carbon Controls

Sen. Jay Rockefeller (D-W.Va.) last week said he had approval from the Senate leadership to call for a vote before the mid-term elections on his bill to bar the Environmental Protection Agency (EPA) from regulating greenhouse gases (GHGs) for two years. Rockefeller said he will have “guaranteed time” to act on his measure, S. 3072, that forbids the agency from implementing any GHG permitting requirements for stationary sources, including New Source Performance standards under Section 111 of the Clean Air Act. The measure explicitly allows EPA to continue regulating mobile sources and to require reports of emissions to its GHG registry program.

Rockefeller’s bill is less strict than Sen. Lisa Murkowski’s (R-Alaska) measure that would have invalidated EPA’s endangerment finding altogether. On June 10, the Senate defeated her bill on a procedural vote 53-47. Rockefeller was prompted to stay EPA’s regulatory authority after the agency proposed its tailoring rule that requires stationary sources to meet GHG limits for the first time in clean air permits starting next year.

The timing of the vote on Rockefeller’s measure may be awkward for Democrats, who will be asked to oppose a climate control measure just weeks before the November elections. Environmental groups are fearful that, absent legislation mandating emission reductions – a distant prospect at this point – Rockefeller’s two-year stay of EPA regulatory authority would effectively end the last opportunity for controlling GHG emissions for the foreseeable future.

Senate Gains New Member from West Virginia

West Virginia Governor Joe Manchin last week named long-time aide and former general counsel Carte Goodwin to occupy the seat held by the late Sen. Robert Byrd, assuring the White House the decisive vote for extended jobless benefits but depriving them of a vote favoring climate change legislation.

Goodwin told reporters that pending climate change legislation featuring cap and trade provisions is “simply not right for West Virginia.” Sen. Goodwin, who has pledged to serve only until a special election to fill the seat is held this fall, said he will “not support any piece of legislation that threatens any West Virginia job.”

Although Sen. Byrd was viewed to be ambivalent about supporting climate change legislation, Goodwin’s emphatic opposition is in keeping with his state’s broad-based opposition to carbon capture programs that would threaten coal production. Gov. Manchin, who announced yesterday he will run for the Senate seat in November, has been a critic of cap and trade measures to control greenhouse gas emissions from coal-based power generation. The state legislature has opposed such measures.

NMA Sues Federal Agencies over Coal Permit Guidelines

NMA filed suit against the Environmental Protection Agency (EPA) and the U.S. Army Corps of Engineers (Corps) for unlawfully obstructing permitting of coal mining operations in the Central Appalachian coal region and beyond, jeopardizing thousands of jobs and a vital supply of fuel to meet the nation’s electric power needs. The suit, filed in the Federal District Court for the District of Columbia, contends EPA and the Corps have circumvented clear requirements for public notice and comment in a host of federal statutes and ignored calls for peer-reviewed science as part of a deliberate policy to substitute agency “guidance” for formal rulemaking.

“NMA members’ efforts to navigate this unlawful process and obtain reasonable and predictable permit terms have been unsuccessful, leaving us no choice but to challenge the EPA and the Corps policy in court,” said NMA President and CEO Hal Quinn. “Detailed guidance is not a valid substitute for lawful rulemaking based on public notice and comment,” Quinn explained in a press statement to the news media. “The agencies’ continued abuse of the law to impose arbitrary standards on mining operations, state agencies and other federal regulatory bodies threatens the entire region with further economic misery and stagnant employment.”

NMA says the policy to hold up permits for enhanced review is based on faulty science and constitutes a de facto moratorium on new mining operations. The result, according to a May 21 study prepared by the Senate Environment and Public Works Committee Minority staff, could put nearly 18,000 coal-supported jobs at risk and destroy more than 80 small businesses in the Appalachian region alone.

Before filing the lawsuit, NMA briefed key reporters and alerted members, state coal associations and grassroots allies.

A complete copy of the NMA’s complaint in the lawsuit is available at: NMA complaint.

A complete copy of the NMA’s press release is available at: NMA press release on lawsuit.

China Surpasses U.S. as World’s Top Energy User

China officially passed the U.S. as the world’s biggest energy user, according to a report released this week by the International Energy Agency (IEA). The Paris-based organization said last year China consumed 2.25 million tons of oil equivalent, or about 4 percent more than the U.S, even though the U.S. economy is nearly three times that of China’s. This metric includes all forms of energy, including coal, renewable fuels and nuclear power. The U.S. had been the biggest energy consuming nation for more than 100 years. Yesterday, China’s energy ministry denied the IEA claim, insisting the U.S. was still the largest energy consumer.

China is already the world’s largest coal consumer and officially surpassed the U.S. as the world’s largest emitter of greenhouse gases in 2007. IEA officials remarked on the extraordinary acceleration in China’s energy consumption, noting that just 10 years ago, the country’s total energy use was only half of the size of the U.S.’s. In the next 15 years, IEA projects China will build 1,000 GW of new power generation capacity – roughly the current U.S. total. China’s new position “symbolizes the start of a new age in the history of energy,” said IEA’s chief economist, Fatih Birol.

The U.S. per capital consumption is still five times greater than China’s, but increasing improvement in U.S. energy efficiency (or declining energy intensity) has persuaded investors to view China’s energy market as more attractive. Until the recession, IEA believed China would require five more years to overtake the U.S. in total energy consumption. But Birol said falling oil and electric power demand from a slowing U.S. economy accelerated the projected schedule for China’s ascendance.

Chinese Companies Buying Mining Assets

A recent story in The Wall Street Journal reports that companies based in Hong Kong and China “participated in $13 billion of outbound mining acquisitions and investments last year – 100 times the level in 2005,” and that they are on a similar pace for 2010.

A complete copy of the story is available at: The Wall Street Journal story (behind paywall).

GAO Report on CCS Technology Spurs Critics
of Cap and Trade Controls for Coal Plants

A report by the Government Accountability Office (GAO) last week stirred new doubts about the impacts that carbon capture and storage (CCS) technology may have on the cost and availability of coal-based electricity generation. GAO’s survey of utility executives, technologists and other electricity generation stakeholders concluded that current CCS technology would raise electricity costs by between 30 to 80 percent, reduce output by up to a third and increase water use at power plants.

The survey found “significant challenges” stand in the way of commercial deployment of CCS over the next 10 to 15 years. In the meantime, said GAO, current opportunities for efficiency gains and lower emissions in electric power generation are blocked by legal barriers. For example, the survey concluded that ultra-supercritical pulverized coal technology, opposed by environmental groups, can generate power with a third fewer emissions than the average coal plant.

The report, requested by Sens. James Inhofe (R-Okla.), ranking member of the Environment and Public Works Committee, and his committee colleague, Sen. George Voinovich (R-Ohio), renewed calls for a cautious approach for addressing climate change with cap-and-trade legislation. “Attempts to force CCS into existence through a massive cap-and-trade tax ... [is] simply irresponsible public policy that will burden consumers with higher electricity costs and threaten America’s energy security,” said Inhofe. “Simply put,” said Sen. Voinovich, “the technology doesn’t exist to meet these mandates while maintaining an affordable and reliable base of electric power.”

Among other findings virtually all stakeholders cited the lack of a legal framework as a strong impediment to CCS commercial deployment; most stakeholders warned of higher electricity costs to consumers and the high costs today of installing CCS technology; parasitic load demands from CCS technology will give utilities less power to sell and raise operating costs, and most stakeholders cited New Source Review requirements of the Clean Air Act as a significant obstacle to achieving interim efficiency improvements at power plants.

GAO recommended that the Department of Energy (DOE) develop a standard set of benchmarks to gauge the maturity of key technologies and report to Congress on their findings. DOE agreed.

A complete copy of the GAO report is available at: GAO Report.

New Report Calculates Costs of Converting Power Generation
from Coal-Fired to Natural Gas-Fired Plants

According to a recent story on Power-Gen Worldwide’s web site, the Aspen Environmental Group prepared a new report, entitled “Implications of Greater Reliance on Natural Gas for Electricity Generation,” for the American Public Power Association. According to the story, the report considered the theoretical possibility of converting the electricity-generating industry to natural gas either by retrofitting existing coal-fired plants or by replacing them with new gas-fired plants.

According to the story, the cost of converting or replacing 335,000 MW of coal-derived electricity would be in the range of $335 billion. They also pointed out that no coal-fired plants had ever actually been retrofitted as gas-fired plants, with all prior “conversions” actually being economic replacements. The report also considered the effect of conversion to gas-fired plants on the overall U.S. supply and demand for natural gas, as well as gas pipeline and storage infrastructure.

A complete copy of the story is available at: Power-Gen Worldwide.com story.

A complete copy of the APPA report is available at: American Public Power Association Report.

Friends of Coal Car Show Last Week in Beckley, W.Va.

Last week Friends of Coal hosted their 7th Annual Friends of Coal Auto Fair in Beckley, W.Va. All proceeds from the event, held at the Paul Cline Memorial Soccer Complex, benefit youth programs at the Beckley-Raleigh County YMCA. The event featured a performance by country music star Charlie Daniels, carnival rides and hundreds of classic cars, motorcycles and trucks. The National Mining Association showcased its “Mine the Vote” voter registration and education program at the event, which generally draws more than 50,000 attendees.