VIRGINIA QUESTIONS NUCLEAR WASTE FUND PAYMENTS TO FEDS
SEPTEMBER 15, 1995
Technology exists to sequester carbon-but will utilities ever buy in?
The vision: A nation filled with new, coal-fired power plants that provide inexpensive, secure power for Americans, while emitting few pollutants and sequestering the carbon dioxide produced. In other words, a power plant that not only industry and environmentalists can agree on, but one that utilities can finance and operate profitably.
The current reality: A nation filled with a rapidly aging coal-fired fleet that runs inexpensively but emits large amounts of pollutants and has no capability to sequester carbon dioxide. In other words, power plants that not only place industry and environmentalists constantly at odds, but which shareholders and investors are increasingly concerned about.
The question: What will it take to get us from today's reality to tomorrow's vision? And are we willing to do it?
There's little doubt that the problem of carbon-increasing levels of greenhouse gases, especially carbon dioxide-must be addressed. President Bush's science advisor, Dr. John Marburger, acknowledges that greenhouse gas levels have risen substantially since the beginning of the Industrial Revolution, and that the bulk of that increase in carbon dioxide levels is due to human activity. 1 A rise in carbon dioxide levels also is expected to cause, if it hasn't already, global warming.
And as Secretary of Energy Spencer Abraham remarked last fall, the only way projections are going for energy demand and resulting carbon emissions is up. Only if one assumes all nations of the world-developed and developing-undertake a massive overhaul of their energy infrastructures in a relatively quick time frame, he says, would those projections decrease.
"I'm not here to offer a detailed assessment of the practicability of those assumptions, but I'm inclined to think the odds are strongly against them," he said. 2
Natural gas is generally touted for its lower emission levels, and burning it in power plants certainly produces much less carbon dioxide than coal-fired generation. Yet gas supplies-and prices-are becoming increasingly problematic, making reliance on natural gas to solve the carbon problem questionable. Domestic gas reserves are projected to last, optimistically, for 60 years at current usage rates. But natural gas usage is expected to increase, while production levels in the lower 48 states have not increased in more than a decade in spite of a quadrupling of exploration.
Coal, on the other hand, has projected reserves to last the next 250 years-without paying OPEC to get it. Unless the United States wants to increase its dependence on foreign oil and gas, there's little choice but to figure out what to do about coal's less attractive features-the emissions of pollutants like NO X, SO 2, mercury, and particulate matter, and of course, the production of carbon dioxide.
At the same time, the utility industry faces tough questions about just how to meet increasing energy demands over the next two decades, and beyond. The price levels for gas are making some investors nervous about new gas-fired generation. But new generation of some type is crucial. In just over 10 years, a third of the current coal fleet-nearly one-sixth of