Business In Gear

Why coal companies want to be seen as clean-energy players even amid new support for fossil fuels

Though Donald Trump has vowed to raise the production of fossil fuels, the coal industry believes it needs more than a friendly administration to survive.

Coal miners wave signs as Republican presidential candidate Donald Trump speaks during a rally in Charleston, W.Va., on May 5, 2016.
Steve Helber/AP/File
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As a presidential candidate, Donald Trump vowed to "bring back coal" as part of a larger program to encourage greater production of fossil fuels.

But the coal industry believes it needs more than an ostensibly friendly administration in Washington to survive.

With coal production down and electric utilities continuing to switch to lower-cost natural gas and renewable sources, the industry feels it needs a boost in its public perception.

It plans to get that upgrade by covering images of black soot and billowing smoke with a coat of green paint.

Coal companies hope to portray themselves as clean-energy players to get the same government incentives as renewable energy, reports The New York Times (subscription required).

They want substantial incentives for carbon capture and sequestration technology, which has been touted for many years by advocates of "clean coal."

At its heart, the technology simply captures the carbon-dioxide emissions created by burning coal, preventing that greenhouse gas from being released into the atmosphere.

Three coal producers—Cloud Peak Energy, Peabody Energy, and Arch Coal—are lobbying for a tax bill to extend government subsidies, while courting the environmental groups that routinely criticize them in hopes of gaining support for their efforts.

"We have to accept that there are reasonable concerns about carbon dioxide and climate," said Richard Reavy, vice president for government and public affairs at Cloud Peak Energy, "and something has to be done about it."

That statement can be counted as progress in and of itself, given the fossil-fuel industry's history of denial of climate science.

Besides the reality of climate change, coal executives have also had to accept the reality of lost business. Last year, U.S. coal production was 18 percent lower than in 2015, putting it at its lowest level since 1978.

Many coal companies went bankrupt, including Peabody, the single largest U.S. coal producer when it went under.

Gains by renewable energy and low-cost natural gas extracted through the controversial process of hydraulic fracturing—also known as fracking—have significantly cut coal demand.

Now that it has emerged from bankruptcy, Peabody says it is taking a fresh approach that includes acknowledgment of coal's contribution to climate change.

But given the industry's current situation, the sudden interest in carbon emissions may also be motivated by the desire to return coal to competitiveness.

The legislation supported by the coal industry would increase the federal tax credit for carbon capture and sequestration from $20 per ton of CO2 to $50.

It would also increase by more than a third the available credits for "permanent storage," which involves forcing stored CO2 into oil fields to increase yield.

This creates a new revenue stream for utilities operating carbon-capturing power plants, but may lead to the extraction of still more crude oil that will eventually be burned and create more carbon emissions.

A plant with this system recently began operation in Texas, and a second carbon-capture plant in Mississippi was expected to open this year.

That plant uses a coal-gasification process rather than simply burning it as fuel, which is expected to make carbon capture easier.

Thus far, all carbon-capture systems at coal plants have been subject to significant delays and cost overruns.

This story originally appeared on GreenCarReports.

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