A Free-Market Energy Blog

Long Live Old King Coal?

By Robert Bradley Jr. -- February 4, 2009

As a fuel source, coal is a different product from what it was in past decades. Specifically, it is much cleaner. Yet, as always, it is much cheaper and more reliable than renewables such as wind and solar. In the generation of electricity, its real competition is natural gas.

In short, coal looks to remain a mainstay in the domestic energy mix and bodes to help defeat the Malthusian anti-energy crusade.

In a recent edition of EnergyBiz Magazine, Lee Buchsbaum reports on a 1,600 megawatt plant now being built in Illinois by Peabody Energy, the world’s largest publicly traded coal-mining company. When completed in 2012, the project will satisfy the power needs of as many as 2.4 million homes in nine or more states. The giant greenfield plant is a real stimulus plan that helps consumers and injects taxes rather than uses taxes. Reports Buchsbaum:

The site, now more than 10 percent complete, provides work for more than 1,200 manual laborers engaged in round-the-clock construction and sees constant earth-moving for the adjacent mine…. Over time, the project will inject some $2.8 billion into the Illinois economy, mostly downstate. It will create 2,300 to 2,500 temporary construction jobs and perhaps 500 permanent positions among the power plant, coal mine and other assets.

And on the environmental front:

PSE will be one of, if not the “cleanest advanced pulverized coal plant in the U.S. fleet,” said [project CEO Peter] DeQuattro. “We’ll feature state-of-the-art pollution controls, wet and dry electrostatic precipitators, nitrogen oxide scrubbers and limestone scrubbers for SO2 removal and for mercury.”

With its enhanced thermodynamics, PSE actually will be emitting 80 percent less than most existing power plants and will be 15 percent more CO2 efficient than any other similar existing power plant. “When you take into consideration our adjacent fuel source, total emissions from the plant will be virtually cut in half,” said DeQuattro.

At the end of the day, “Prairie State’s environmental profile prevailed in the courts of law and public opinion,” said Rick A. Bowen, Peabody senior vice president of Btu conversion and strategic planning, largely because “each environmental review brought stronger affirmation of Prairie State’s advanced environmental controls. . . .”

“We believe that what we are doing could be an example for future power projects, be they coal fired, nuclear or green,” says [board chairman Raj G.] Rao. . . . “Once we do this, we will have the confidence that you can go bigger.”

And Obama … How about coal politics in the new administration? As reported in the Wall Street Journal a while back, in the article, “Coal Industry Digs Itself Out of a Hole in the Capitol [sic],” energy realism is creeping into President Obama’s energy and climate strategies.

The take in the story is expressed in the article’s subtitle: “Support From EPA, Energy Nominees Signals Obama Team Headed Toward Center on Matter of Fossil Fuels and Carbon Emissions.” The article states:

Despite a well-funded ad campaign by environmentalists attacking the industry, and a huge coal-ash spill in Tennessee that has led to calls for more regulation, the [coal] industry has received positive assurances this week from President-elect Barack Obama’s nominees that the new administration is committed to keeping coal a big part of the nation’s energy source.

On Wednesday, Mr. Obama’s choice to lead the U.S. Environmental Protection Agency, Lisa Jackson, described coal to a Senate panel as “a vital resource” for the country. A day earlier, Mr. Obama’s nominee to run the Energy Department, physicist Steven Chu, referred to coal as a “great natural resource.” Two years ago, he called the expansion of coal-fired power plants his “worst nightmare.”

Coal has a future, a really big future.


Note: Lee Buchsbaum’s article is in EnergyBiz Insider, published three days a week by Energy Central. For more information about Energy Central, or to subscribe to EnergyBiz Insider, other e-newsletters and EnergyBiz magazine, please go to http://www.energycentral.com/.


  1. Donkatsu  

    If you replace an older plant using coal with a new, supercritical, unit (PSE), then this is, on balance, good for the environment, no?

    Less of all the things that you do not want – CO, CO2, NOX, SOX, ash – per kWh of output. But uncertainty about carbon legislation has stalled most new coal plants and the financial crisis has probably killed many of the survivor candidate plants.

    So we will go into the future dirtier and with less technical experience at just the sorts of things we need to make the best use of our vast coal reserves. Somehow, this does not seem like a recipe to free us from our foreign oil bondage, a la the political class’s promises. It does not even result in a cleaner environment, since we will keep a lot of older coal plants in service beyond the “use by” date. Just a couple of regional blackouts and the Feds will decide that just maybe we need to keep the current coal plants operating since nothing else on offer can replace the electricity output.


  2. TokyoTom  

    Rob, are the John Badens, Terry Andersons, Bruce Yandles, Elinor Ostroms and others who want to find ways to manage our commons better – by improving ownership, incentives and pricing signals – also part of a “Malthusian crusade”?

    I just wanna make sure I know who to hate.

    As for that big fly ash breach/spill in Tennessee, I’m glad that you didn’t point out how this was a result of government ownership of TVA, with the added benefit that costs will be borne not only by direct and indirect victims, but by taxpayers as well. No sense in pointing out how government is so often in the way, particularly if it detracts from our “we hate enviros!” message. Last thing we ever want to do is to reach a shared understanding with enviros of the institutional underpinnings of problems, since that means our funders might lose some of their fairly purchased, government-given special privileges.


  3. Ed Reid  

    “…, since we will keep a lot of older coal plants in service beyond the “use by” date.”

    Worse than that, there are changes which could be made at those old plants to improve efficiency and reduce emissions. However, those changes can trigger NSPS, requiring the old plant not only to be better than it was previously, but to be either BACT or LAER. In that political environment, it is far less risky and potentially far less expensive, to maintain and repair rather than upgrade.


  4. Ed Reid  

    “United States Files Clean Air Lawsuit Against Westar Energy
    The United States has filed a complaint against Westar Energy alleging that the company violated the Clean Air Act by making major modifications to the Jeffrey Energy Center, a coal-fired power plant in St. Marys, Kan., without also installing and operating modern pollution control equipment, the Justice Department and U.S. Environmental Protection Agency (EPA) announced today.”
    WASHINGTON, Feb 04, 2009 /PRNewswire-USNewswire


  5. rbradley  


    I have several thousand pages in the public domain on free market theory and history applied to energy, including criticisms of political capitalism.

    The ball is in your court to buy and read any of my six energy books–and to visit my website http://www.politicalcapitalism.org. Particularly focus on Enron on this website.

    Capitalism at Work (2009) is the latest book that I invite you to read and review.


  6. TokyoTom  

    Rob, does this mean that you are a “free-marketer” in principle, but can’t be bothered to show it in your public policy discussions?


  7. rbradley  


    It means that you have to do your homework. I take on opposing views as a matter of course in my books and essays–I hope you understand that I do not have time to regurgitate my arguments in a personal debate with you.

    But if you are really a “libertarian,” you need to get more critical toward climate alarmism and the history of Malthusianism–and more realistic towards government failure versus market failure.

    I am signing off with you but look foward to your review of Capitalism at Work–a multi-disciplinary treatise on heroic capitalism that as a libertarian you should study.


  8. TokyoTom  

    Rob, Roy Cordato (linked at my name) said this:

    “The starting point for all Austrian welfare economics is the goal seeking individual and the ability of actors to formulate and execute plans within the context of their goals. … [S]ocial welfare or efficiency problems arise because of interpersonal conflict. [C] that similarly cannot be resolved by the market process, gives rise to catallactic inefficiency by preventing useful information from being captured by prices.”

    “Environmental problems are brought to light as striking at the heart of the efficiency problem as typically seen by Austrians, that is, they generate human conflict and disrupt inter- and intra-personal plan formulation and execution.”

    “The focus of the Austrian approach to environmental economics is conflict resolution. The purpose of focusing on issues related to property rights is to describe the source of the conflict and to identify possible ways of resolving it.”

    “If a pollution problem exists then its solution must be found in either a clearer definition of property rights to the relevant resources or in the stricter enforcement of rights that already exist. This has been the approach taken to environmental problems by nearly all Austrians who have addressed these kinds of issues (see Mises 1998; Rothbard 1982; Lewin 1982; Cordato 1997). This shifts the perspective on pollution from one of “market failure” where the free market is seen as failing to generate an efficient outcome, to legal failure where the market process is prevented from proceeding efficiently because the necessary institutional framework, clearly defined and enforced property rights, is not in place.”

    Do you agree?

    My focus in reviewing your comments and those of other posters is whether you are contributing in good faith to conflict RESOLUTION – conflict over readily understandable references – or to “winning” the struggle over government for the benefit of your clients.

    I think that`s perfectly fair.

    So far, I don`t see much of an effort at good faith engagement.
    Here`s to hoping that you demonstrate here that you are a free-marketer, and not a rent-seeker.


  9. TokyoTom  

    Oops: “readily understandable references” should be “readily understandable preferences”


  10. Stan  

    How is Bradley rent seeking? It is rent seeking to point out that coal is much cleaner than in the past? Why would Terry Anderson, et. al. disagree with that statement?


  11. TokyoTom  

    Stan, great question, and I’m hoping that Rob will help clear this up.

    I haven’t concluded here that Rob’s a rent-seeker; more evidence would be needed, but it’s fair to inquire and to wonder.

    However, Austrians are problem solvers, not trying to win government favor for a particular industry or bashing those with different views for the benefit of clients. It doesn’t looking like Rob is trying very hard to be even-handed.

    I think it’s fair to question what precisely are the objectives and who is funding Rob, “Master Resources”, the Institute for Energy Research, the American Energy Alliance and affiliated institutions/personages. My understanding is that fossil fuel firms are the principal funders, and it looks like the finding is rather generous.


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