Naasz asked the audience at the National Press Club to consider how America will meet a projected 40% increase in demand for electricity by 2030 while also confronting climate change issues. “This question applies to our entire energy portfolio—from electric power to transportation fuels to feedstocks for manufacturing,” said Naasz. “I do believe that America’s response to the intertwined

challenges of climate change and energy policy will bear fateful consequences.” He warned that strategies that arbitrarily cap coal use “could have profound economic consequences for the nation.”

Naasz underlined the need for a careful climate approach, one that does not mandate aggressive CO2 caps that would increase energy costs and drive jobs offshore, as is the case with the “Lieberman-Warner Climate Security Act” (S. 2191), which could come to a vote on the Senate floor as early as next month. Naasz stressed that S. 2191 has no meaningful provisions for mitigating its impact on carbon-intensive industries or the economy as a whole; does not provide the ambitious funding levels that are needed to accelerate the development and deployment of carbon capture and storage technology; and does not synchronize the imposition of controls with the anticipated availability of carbon capture and storage technology. “The result from these deficiencies would almost certainly be costly fuel switching by power plants from coal to natural gas, whose supply is already constrained,” said Naasz.

Pointing to a recent economic impact analysis of the bill completed by CRA International, Naasz said S. 2191 could “cost up to 2.3 million jobs, raise wholesale electricity prices as much as 65% by 2015 and cost the average family of four about $3,500 a year. As more senators focus on its consequences,

the Lieberman-Warner bill’s prospects in the full Senate fade,” Naasz said. “Thankfully, some in Congress are turning to a major policy tenet of NMA—namely, that a technology pathway should be built before we impose mandatory carbon controls,” said Naasz.

“Specifically, we should remove regulatory impediments to improved power plant efficiency and accelerate funding for the development and deployment of carbon capture and storage technology.”

Naasz said a range of experts, including researchers at the Massachusetts Institute of Technology and leading industry research institutions, believe the US should be investing far more in carbon capture and storage technology, saying at least $2 billion annually is needed over the next 15 years above what the federal government is currently spending. “This funding would be for basic R&D on carbon capture but also for the large-scale demonstration projects needed for new and existing power plants,” he said.

Naasz said incentives are needed that can ease the cost of installing advanced clean coal technologies such as coal gasification and ultra-supercritical pulverised coal. “These technologies can enhance the efficiency of coal plants, so that less carbon is emitted for every BTU of energy produced,” saying that each efficiency gain of 2% yields a 5% reduction in CO2. “A new power plant built today emits 90% fewer pollutants than the plant it typically replaces,” said Naasz, adding “I’m confident that a sufficient commitment of dollars and ingenuity would have equal success in reducing GHG emissions.” He pointed to the continuing success of clean coal technology in reducing emissions of conventional pollutants, which have dropped by 40% since 1970, as clear evidence of how a technology-based climate change strategy can slash CO2 emissions.

“We have already taken an important step in this direction with the official announcement last month that the Future-Gen site has been awarded to Illinois,” Naasz said. “This billion-dollar-plus coal-based plant will generate electricity with virtually no emissions and store the CO2 underground.”

“NMA believes it is critically important that policymakers not put the cart of mandatory controls before the technology horse,” said Naasz, adding that legislation advancing a technology-centered solution for climate change is set to be introduced shortly. “Such a technology roadmap can lead to a more socially responsible use of our country’s unrivalled coal reserves while providing Americans with economic prosperity and security in an increasingly unsettled world.”

The NMA and a coalition of industry and labour allies recently called on the Bush Administration to provide at least $900 million in the fiscal year 2009 budget to support the US Department of Energy’s (DOE) research, development, demonstration and FutureGen programs. A January 9 letter to Office of Management and Budget Director Jim Nussle emphasised that these programs “are critical to this country’s economy and environmental well being.” Joining NMA in signing the letter were the American Public Power Association, Coal Utilization Research Council, Edison Electric Institute, National Rural Electric Cooperative Association and the United Mine Workers of America.

“The potential for coal to help meet our nation’s future energy needs is almost unlimited,” the letter said. The letter emphasised the need to develop cost effective ways to use coal in a manner that meets “environmental and climate goals, preserves our national energy security and continues to provide low cost power and products for the American consumer.” In order to meet these goals, the letter said technological advances will be the “solution to ensuring coal continues to provide the same benefits to the environment and the consumer, but only through strong government support of a focused DOE Clean Coal program.”

The letter pointed to carbon capture and storage technologies (CCS) as being key in future efforts to significantly reduce carbon dioxide emissions, while “also allowing coal to meet the world’s pressing energy needs.” To ensure the development of CCS technology, a partnership between government and industry “to jointly develop viable CCS technologies has never been more important,” the letter said. “This task will require a monumental effort on behalf of both government and industry” in terms of the funding to support such technology development,” NMA and its allies argued.

By 2025 the letter said coal combustion and gasification-based power generation options can be available commercially that are capable of capturing and storing carbon dioxide, but to meet this goal $10 billion in federal funding is needed through 2025 to support an expected industry investment of $7 billion.

“Coal will continue to play a vital role in helping America meet its needs for reliable and affordable energy in a climate constrained world,” said the letter. “We urge you to provide sufficient funding in the FY 2009 budget for the DOE research program, the president’s Clean Coal Power Initiative, and the president’s FutureGen project, all of which are critical to ensure the development of technology solutions to address climate change.”