The Campaign Spot

Lack of Energy Policy Kills Two Plant Proposals

Jobs saved, or created, or canceled.

News out of Wyoming:

Work on the High Plains Gasification-Advanced Technology Center, a much-anticipated $100 million research facility planned for Cheyenne, will be halted for at least a year and a half, University of Wyoming officials said Friday.

GE Energy, which has been working jointly with UW on the coal-gasification research center, delayed the project because of uncertainty about the future of U.S. energy policy, according to a UW media release.

GE has already delayed the project since the fall of 2010 because of a lack of a clear U.S. policy on climate and energy.

The facility, which would study advanced coal gasification technology for the Powder River Basin — a key economic driver to Wyoming’s economy — was scheduled to be completed by the end of 2012

Wyoming’s Republican Gov. Matt Mead puts the blame square on Washington: “Capital from the private sector only flows to large and ambitious projects when there is reasonable regulatory, legal and financial certainty. This is a real world example of the local impact of the federal government’s failure to provide a policy path forward for energy use in America. An energy policy must include the responsible use of our coal resources. Without a clear policy, investors and developers do not have certainty and cannot plan for risk, which is critical in making decisions to build modern, efficient plants… “America and Wyoming have the leadership capacity, the technology prowess and the private capital availability to wisely put our energy resources to productive use but we are strangled by uncertainty created by the energy policy vacuum in Washington.”

This comes after American Electric Power “shelved plans for a commercial-scale carbon capture and sequestration (CCS) project that was a centerpiece of the federal government’s so-called Clean Coal Initiative” in West Virginia.

The company says Congress’ inability to act on climate policy and a weak economy were left little incentive to go forward with the $668 million project.

AEP and French partner Alstom are already operating a pilot-scale CSS project at the Mountaineer coal plant in West Virginia. With $334 million in federal funding, they planned to expand the project in four phases to eventually capture the emissions from about 220 MW of the plant’s 1,300 MW capacity and store it deep underground…

So far, no commercial-scale CCS plants are in operation in the US, and the technology is beginning to look more and more economically unfeasible (like nuclear power).

The Department of Energy still has $612 million in Recovery Act funding designated for CCS projects in Louisiana, Texas and Illinois. And Southern Company is reportedly building CCS at a 582 MW gasified coal plant in Mississippi that will capture 65% of the emissions.

The American Electric Power plan got scrapped in mid-July and the Wyoming proposal’s delay was announced at the end of July. What possibly could have made these coal plant companies so nervous about what’s coming out of Washington?

Oh, that.

Power plant operators are nervously awaiting a new Environmental Protection Agency regulation, finalized last week, which requires more than 1,000 facilities, including more than 500 coal-fired plants, to meet stricter emissions standards so as not to pollute neighboring states. 

The regulation, called the Cross-State Air Pollution Rule, calls for plants to install scrubbers to lower particulate emissions in states that are downwind…

The rule, one of a slew of EPA regulations directed at smokestack industries in the coming months, will impose huge costs on power plant operators, say industry representatives. 

“There are five or six other regulations coming down the pike that will have a huge impact on industry and on consumers and businesses, especially in parts of the country where we still have industrial manufacturing jobs,” said Jeffrey Holmstead , an expert in environmental strategies at the law firm of Bracewell and Giuliani.

The stimulus giveth the taxpayer money to create jobs; the regulations taketh away the financial feasibility.

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