Saturday, July 15, 2006


Very good interview with "Big Coal" author

We need to get over this idea that we need to find ways of generating more power so we can keep consuming more.

[Excerpts from a great interview, snips marked thus: . . .]

. . .

*DR:* Coal boosters say we have 250 years worth of coal to burn in this country. You argue that's misleading. Why do you think that figure is inflated?

*JG:* It is based on old studies that haven't been updated since the '70s. Those studies themselves were based on studies from the '20s and '30s.

It's not mysterious where coal is. It doesn't pool underground; it doesn't move around. It's a sedimentary rock. We pretty much know where the coal is. The problem with that number -- 250 years, or 270 billion tons -- is that it doesn't take into account where it is and what it will take in environmental and economic terms to get it out of the ground. Vast coal reserves are buried under towns, under state parks, under forests. We've been mining coal for 150 years. We start with the easy stuff, and it gets harder and harder to get out. The coal they're going after now, even in the Powder River Basin [in Montana and Wyoming] where there's lots and lots of coal, is getting deeper and deeper. It's more deeply buried in Appalachia, requires more destructive technologies, like mountaintop-removal mining. Underground mines are going into coal that was considered off-limits before because it was too difficult or dangerous to get at.

*. . .

*DR:* You mention Americans' ignorance about where electricity comes from.

*JG:* Everyone I talk to can tell me the price of a gallon of gas to the tenth of a cent, but I've not found a person -- except for one guy at a reading last night who had a solar panel -- who could tell me what they pay for a kilowatt of electricity. We're completely divorced from the price.

If you look at electric power bills, you will see they often make it very difficult to know exactly what you're paying.

*. . .

* JG:* . . .It's interesting to think about what would have happened in Morgan's vision: We would have had decentralized electricity generation. We would be generating electric power like we generate heat now, with little furnaces in our basements. It would be a whole different paradigm for the industry.

*DR:* It's a paradigm that has come back into vogue now with environmentalists.

*JG:* Totally. There's no reason that couldn't have worked. With all these technological forks in the road, there's all kinds of unanswered questions, but it was a close fight at that time. It's certainly fun to think about how the world would have been different if Morgan had won the argument. . . .

*DR:* Do you think decentralized electricity generation could work today?

*JG:* Oh yeah. The age of the giant power plant is essentially over. There are people who have ideas about mega mega huge nuclear plants and things like that, but ... I grew up in Silicon Valley -- I'm a big believer in the micro model. That's where the future is, because it scales up much more quickly, allows diversity of generation, allows people in the sunny places to have solar, people in windy places to have wind. That paradigm plays in with the whole evolution of a smart transmission grid, net metering, back and forth.

The centralized paradigm of electric power is a legacy of the monopolistic robber baron era. And Samuel Insull and Thomas Edison. We're seeing a fight by Big Coal and Big Nuclear to keep that paradigm alive. I could be just as wrong as anyone about this, but I think that era is over.

*DR:* There's such a legacy of money and political connections.

*JG:* It's not gonna change overnight. But it's hard to see how it gets bigger. We already lose ... transmission is so inefficient. To build power plants any bigger is so expensive, and there are so many siting problems, it's a kind of nightmare. This is not something that's going to play out in five years, but over the long term. Again, maybe it's just my Silicon Valley bias, but that seems to be where the creativity and the energy is right now.

*DR:* The regulatory scheme that was born alongside coal generation created a natural monopoly.

*JG:* The electric power industry model we have now, the architecture, was designed by Samuel Insull, the apprentice to Thomas Edison and later Chicago power magnate. He understood that the best way to preserve a monopoly was to submit to regulation and set up this quasi-regulatory model of public service commissions and things like that.

He knew it would make barriers to entry very high, and being a Chicagoan understood that the regulators could be pretty easily bought off. So it was essentially no regulation at all. And that paradigm has continued. There's been a whole movement toward electricity restructuring, trying to open markets up, but very powerful players don't want that to happen. The last thing they want is competition.

This ancient transmission and regulatory infrastructure has become incredibly complex now, even for someone like me who spent three years trying to understand things like participant funding. How do you allow someone else to hook up to the grid? Who has the first right of transmission through particular lines? The big electric utilities, like American Electric Power and Southern Company, who control some of these grids, do everything they can to make
it difficult for smaller generators to set up. I've heard many stories about this. I know a guy who had this incredibly great proposal for a wind farm in Tennessee. Everything was set, except he couldn't get the Southern Company to allow him to hook up to the grid. They invent 20
million reasons why this won't work or that won't work. The project died. As long as you have these entities for whom competition is not a good thing, as long as they're essentially controlling the wires, it's very difficult.

The average person on the street has no idea where electric power comes from, much less the details and intricacies of this incredibly complex regulatory network. It's all in the hands of three or four public service commissioners in most states.

*. . .

*DR:* If those commissioners wanted to allow rates that change at peak hours, could they do that now? How much control do they have?

*JG:* They're handcuffed by a mandate to provide lowest-cost power. The problem is, how do you define cost? It's always a problem when you talk about coal, because they'll say, coal is only three cents a kilowatt and gas is six. But of course coal costs much more if you factor in what's
going in Appalachia, and global warming, and air pollution, and that kind of stuff. So revising this obligation to low-cost service, changing that definition, is really important. It's a difficult thing to do, but there are a lot of people who are targeting public service commissions now to try to educate and reform and change them, to get these commissioners to understand that there's more to price than pennies per kilowatt.

*. . .

*DR:* Public perception has it that air quality has improved in terms of soot, in terms of particulate pollution. It's held up as one of the environmental victories. But you ask some pointed questions about that view.

*JG:* The coal industry rightly points out that since 1970, emissions from coal plants are down 35 percent, the air in many places in the country is cleaner, and things like acid rain have -- there's some debate about this -- been solved. There's been a lot of progress. But the industry fought every one of these changes tooth and nail, predicted the end of the economy, said they couldn't do it, it'll cost everybody billions of dollars ... and they got it done.

According to the American Lung Association, 24,000 people a year still die prematurely from pollution from coal-fired power plants. Clearly there's still a big problem. I visit places like Masontown, Penn., where you've still got these big old coal burners just dumping the stuff out.
That's what the new-source review fight's about: there's still these big filthy coal plants that should have had pollution controls on them years ago, still pumping it out. In those communities, there's still profound health effects.

This whole idea of the air getting cleaner is only true from a 1970s point of view. You look at the things that have been regulated -- sulfur dioxide and nitrogen oxide, the two main components of smog -- and those are what have gone down. But the things we're concerned about now ...
mercury, that's not going down. Most importantly, carbon dioxide: since 1990, in the U.S., carbon dioxide emissions are up 17 percent. From coal plants, 27 percent.

*. . .

*DR:* Most people would pin the campaign of misinformation around global warming on the oil industry. But coal's had a role to play as well.

*JG:* Coal has fought against it from the very beginning. The Greening Earth Society is a classic example an astroturf campaign set up to make us think that global warming is good, that it will make the earth more bountiful and the beaches warmer and nicer and everybody'll have a better suntan. I've often wondered how cynical it really is.

It's clear that the coal industry has always viewed global warming as a game ender. They know -- or at least they've always believed this, I don't think it's true -- that if we take global warming seriously, they're in deep trouble. Mercury, clean air stuff, they can deal with all that. They don't want to -- it's just a question of money, a question of time. They have long viewed global warming as: they're out of business. It's partly a product of their paranoia, partly a product of the fact that they feel beaten up by the environmentalists, and partly ignorance.

When I was in Gillette, Wyo., in 2004 I sat down with the CEO of one of the biggest coal companies in America. We were talking about global warming. I asked him if he talks to his kids about global warming. He said, yeah, I do, I make sure they wear hats when they're out in the
sun. I'm like, what do you mean? And he said, well, the hole in the ozone, I don't want them to get skin cancer. This is what you're concerned about?

There's a profound and willful ignorance on the industry's part. It's hurt them. I don't think global warming is necessarily a game ender for coal, but the fact that they've dragged their feet on it so much just makes the challenge all the harder for them.

*DR:* If you really think it's a game ender for your industry, is that not impetus to go find out what it is, and whether there's validity to it? It's hard to understand how you could grasp the problem and still work to prevent concerted action.

*JG:* This is a cultural problem. This is an industry that has always been resistant to change. The entrepreneurial era in the electric power and coal industry ended around 1925. It's been on automatic pilot for about 75 years.

The other thing is, it's not really their job. This is a political failure, not a business failure. They're responsible to their shareholders to make as much money as they can within the law. It's odd to say this, but I feel some sympathy. They're fighting for what they think is survival.

If we crack down, finally, on carbon dioxide emissions, they will adapt or die. They will do it.

*. . .

*DR:* Do you have thoughts on the nuclear debate?

*JG:* My problem with nuclear is not so much the waste thing. We need to get over this idea that we need to find ways of generating more power so we can keep consuming more. Nuclear plays into that idea that we can just switch out coal and build nuclear -- that we don't have to think about it anymore.

*DR:* The same role ethanol plays with gasoline.

*JG:* Right. And the same role /coal/ plays with gasoline, the idea that we can liquefy coal to replace Middle Eastern oil. It's a switch-the-box kind of solution.

It also keeps the big corporate powers in play; it keeps this essential structure in the electric power distribution intact -- it's about the big hubs and all that.

*DR:* And incredibly high barriers to entry.

*JG:* Right. It keeps it out of your hands; it's Big Daddy's answer to our problems. That's the problem with it. But I also agree with Al Gore: I don't think it's going to scale. The cost is so huge, the financial risks are so huge ... I think we'll see a handful of them built. But to scale them up to really deal with the problems, I just cannot imagine happening.

*DR:* What are the motivations behind the Asia-Pacific pact?

*JG:* To look like you're doing something. There's nothing behind that. It's all this vague idea of technology transfer. There's no real money involved. There's nothing more than a bunch of people sitting around talking. It's a completely transparent attempt to look like something's
happening, when nothing is happening. I see no evidence of anything serious.

GE's just going to give them the technology for gasification? I went to China three times for this book, and the plane's always loaded with coal people going over there. They love selling their second-rate scrubbers to China -- they want to transfer a lot of technology, especially the
old shit they can't sell here. They want to dump it on the Chinese. If you are a company that sells scrubbers to coal plants, and you see what's going on in China, it's like a wet dream. You've got zillions of coal plants going up over there. You want to transfer your technology as
quickly as you can. Cleaner air in China is important, and they should all have scrubbers, but that's not the real issue.

*. . .

*DR:* I've heard that about China before, that they're really clear-eyed. But on the other hand, if they really do build the hundreds of dirty coal plants they're planning, the game's up -- there's no way to avoid catastrophic climatic consequences. You don't want to consign them to poverty, but you don't want to consign the rest of the world to catastrophe ...

*JG:* I have an 8-year-old daughter. She understands very clearly that if she messes up her room, she needs to clean it up. We, the West, are the ones who have dumped all this shit into the atmosphere that's causing the problems now. We are the richest nations in the world. The
environmental movement shies away from the morality of this. I have friends in the movement who say, "we can't talk about morality. We can't tell people what to do." But I get a little bit tired when people ask me, as they always do: if we're not going to burn coal, what are we
going to do? What are we going replace it with? Is it nuclear? Is it solar? Is it wind?

When I was working on this book as I spent some time looking at slavery debate. During the slavery debate there was all this stuff: oh, you can't abolish slavery, the farms will collapse, what are you going to replace this labor with, we don't have people, who's going to pick our cotton, everything's going to fall apart. The great thing Lincoln said is, that's not the issue. The issue is, is it right or is it wrong? You make that decision first and /then/ you decide how to do it. Global
warming is reaching that moment.

There's an incredible literature of southerners, smart southerners, well-intentioned southerners, saying /we won't be able to pick anything/. How many people will we have to import? How many northerners will we have to hire to replace ex-slaves? The same kind of
one-box-for-the-other you have with coal and wind now.

*DR:* Once you get in those technical arguments, it's hard to say: have faith that human beings are smart, they're clever, they're adaptable. We'll figure something out.

*JG:* One of the things the industry is good at is perpetuating this myth of economic peril. They've done that since the moment the Clean Air Act landed on the desk of Richard Nixon in 1970.

*DR:* If you had to predict, do you think that in 50 years, 100 years, we'll still be burning coal?

*JG:* . . . But in the long run, it's obvious to me, and to everyone, that coal is a very inefficient way of getting energy, even in the best-case scenario. Best-case scenario, it is a bridge to some other breakthrough, some cleaner, greener technology. Solar is the holy grail, and there's a lot of money flowing into that now. Because what is coal but solar power? Just 300 million-year-old solar power.

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