Published on March 5th, 2018 | by Steve Hanley0
How Lies, Greed, & Mismanagement Blew Up The “Clean Coal” Myth
March 5th, 2018 by Steve Hanley
Clean coal. It was supposed to be the alchemist’s dream, the real world equivalent of spinning straw into gold. Or making a silk purse from a sow’s ear, if you are a Linda Ronstadt fan. What clean coal is all about is taking lignite, the lowest grade of coal, often called brown coal, and putting it into a pressurized chamber, then heating it to 1800 degrees Fahrenheit under great pressure. The resulting gas is collected and used to make electricity, sequestering most of the carbon emissions from the lignite at the same time.
Carbon Capture Is The Key
If it worked, the clean coal and carbon capture process would not only make electricity, it would do so with the lowest carbon footprint of any fossil fuel, including natural gas. It would be a two-fer, a daily double, and a twin killing all rolled into one. The carbon capture piece of the puzzle is what attracted attention from people around the world, including Saudi Arabia, Japan, and Norway.
According to an article in The Guardian, Jukka Uosukainen, the United Nations director for the Climate Technology Center and Network, toured the site of the proposed plant in Kemper County, Mississippi in 2014 and said, “I’m impressed,” before adding, “Maybe using coal in the future is possible.”
Clean Coal Technology Fails — Big Time
The problem is, the clean coal technology, which was helped along by hundreds of millions of dollars in federal grants and research, doesn’t work. The problems started when the first of two high pressure, high temperature gasifier units arrived. During testing, moisture trapped in the concrete liner turned to steam and exploded, ruining the unit. No one had any realistic idea how to fix the problem.
Later, the 174-foot tall concrete sphere where the coal would be stored began to crack almost as soon as it was completed. Soon, there was a hole in the dome a large as small house. The entire structure had to be torn down and rebuilt. The original budget of around $2.5 billion arrived at a decade ago ballooned over time to more than $7.5 billion before the Southern Company called a halt to the project last year.
Lies And Deception Abound
But that’s not the real story. Not all new technologies are able to make the leap from the laboratory to the real world. What is really at issue here is the lies, double dealing, deliberate misrepresentations, and obfuscations carried out at the highest levels of the Southern Company with the aid of Mississippi officials. In America today, nuns protesting insane immigration policies get arrested and charged with crimes. Officials involved in covering up a massive scandal that bilked stockholders and utility customers out of billions are allowed to retire quietly to their oceanside mansions. The United States has a legal system. What it lacks is any semblance of a justice system.
As the first concrete dome was being torn down and before it was rebuilt, Tom Fanning, CEO of Southern Company, was telling a bald faced lie to investors. During an April 24, 2013 earnings call he told them that “tremendous progress” was being made at the construction site and that “the scheduled in-service date” was feasible. He added that most of the key components for the facility — including the dome — were already “in place.” They were not.
The Mississippi Public Service Commission was part of the problem as well. On March 15, 2012, the Mississippi supreme court ruled in favor of a petition by The Sierra Club to shut the project down. Shortly thereafter, the PSC renewed the company’s permission to build the plant, effectively bypassing the supreme court ruling. But it insisted on an absolutely final, no wiggle room, hard cap on the cost of the project of $2.8 billion. The company was way beyond that limit at the time. The next few years were taken up as much with cooking the books to keep the PSC in the dark as continuing construction on the Kemper plant.
The Guardian reviewed more than 5,000 pages of documents and e-mails in order to put its story together and we encourage you to read its entire exposé if you want all the gory details. They also interviewed several current and former engineers who worked on the Kemper program. The story that unfolds details in exquisite detail the pressure put on those people to fudge the numbers to keep the state authorities from pulling the plug.
Lying From The Start
One of the key components to the clean coal plant — which would feature more than 900,000 feet of piping — was the availability rate, the percentage of the time it could be expected to be up and running versus down for maintenance and repairs. The Kemper facility needed to have an availability rate of 80% in order to be financially successful.
An independent audit requested and paid for by Southern Company just as construction was getting underway found the actual availability rate would be more in the range of 30% to 45% during the first 3 to 5 years of operation with the 80% figure not likely until at least 10 years out — if ever. Later, an internal review came to much the same conclusion. None of that information was shared with federal or state officials or investors. Instead, Southern Company employees were pressured to alter key documents to make it appear as thought things were moving along as planned.
A large part of the Kemper clean coal debacle involved the way utility companies earn their living. In many parts of the country, they are able to attract investors because they are guaranteed a designated rate of return on the investments they make in power generation facilities and infrastructure. Want to make more money? Spend more money. It’s easy. The law guarantees a fixed rate of return whether your investments are wise or not. Great for utility company executives and their generous compensation plans. Not so great for the members of the public who see their rates increase to cover the costs of those expansionist policies.
Mississippi and several of its neighboring states have only themselves to blame. Like giving free money to compulsive gamblers, they passed laws in the early years of this century that allowed utility companies to start earning their financial rewards before projects were even completed. This “I will gladly pay you Tuesday for a hamburger today” philosophy ratcheted up the incentives to spend big by Southern Company and other utilities.
Mississippi may be the poorest state in the nation with the highest infant mortality rate and one of the nation’s lowest literacy rates, but it knows how to reward the wealthy white men with lucrative deals at public expense. There’s a reason why Nina Simone once “honored” the state with the withering lyrics of her infamous song, Mississippi Goddam.
The debacle in Kenper County did more than explode the clean coal myth. It also deprived the residents of Mississippi of the benefits that clean renewable energy could have brought to the region. Imagine if that $7.5 billion wasted on the Kemper plant had been invested in solar power plants instead. How many companies might have been lured to the state by the promise of low cost renewable energy? How many jobs would have been created? How likely is it that Mississippi might have been able to shrug off its plantation era economic model and become a contributor to the national economy instead of continuing to suck harder on the federal teat than most of its sister states?
Hypocrisy In High Places
When Solyndra, a solar panel startup, went bankrupt, wiping out over $500 million in federal loan guarantees, Republicans went insane, lambasting the Obama administration for everything from gross incompetence to mopery on the high seas. But when that many or more federal dollars went down the Kemper County rat hole? Not a peep of protest to be heard anywhere. Oh, well. That’s life in the big city, boys. Move on. Nothing to see here. Move along.
Dumbo Trumpo is so stupid, he thinks you make coal clean by washing it after it comes out of the ground. He made reference to the clean coal “miracle” in his State of the Union speech last month. “We have ended the war on American energy,” he crowed, “and we have ended the war on beautiful clean coal.” Beautiful is one of three adjectives in Trump’s limited vocabulary.
“We told them years ago that this was a façade,” said Louie Miller, director of the Mississippi chapter of the Sierra Club. “I think there’s going to be a big scrap metal sale at some point.”
Goodbye, Clean Coal. Hello, Renewable Energy
If there is any silver lining to this tragedy, it is that clean coal is no longer a viable option for American utility companies. Which means they will have to look elsewhere to meet the needs of their customers in the future. As the price of renewables continues to fall, wind and solar are the options that make the most economic sense going forward. The fact that they are kind to the environment as well is just icing on the cake.