The Democrats' Single Least Credible Idea: An 'All of the Above' Energy Plan

The party says it sees a place for coal in our energy future. The Obama administration's climate policies say otherwise.

The party says it sees a future for coal in our energy future. The Obama administration's climate policies say otherwise.  
A carbon capture unit at a West Virginia coal plant. (Reuters)

Ever since his last State of the Union address, President Obama has relied on four short words to describe his administration's energy policy: "all of the above." Should we rely on fossil fuels or renewables? Yes, says the White House.

That sentiment is now enshrined in the Democratic party platform that was officially adopted in Charlotte Monday night. "We can move towards a sustainable energy-independent future if we harness all of America's great natural resources," the document states. "That means an all-of-the-above approach to developing America's many energy resources, including wind, solar, biofuels, geothermal, hydropower, nuclear, oil, clean coal, and natural gas."

It's a nice sounding thought. But in light of the Obama administration's environmental policies, it's sort of nonsense.

The problem is coal, which would have to play at least some role in an all-of-the-above energy strategy. Traditionally, coal produces more than 40 percent our electricity, though that figure has fallen over the past year as power plants have burned higher amounts of inexpensive natural gas. Meanwhile, coal also contributes about a third of the country's greenhouse gas emissions, making it one of the primary culprits behind climate change. For Republicans who aren't particularly concerned about the earth's surface temperature, this isn't much of an issue. Cheap power, they say, is cheap power. But for Democrats who profess to care about global warming, that means old-fashioned, carbon-belching coal plants won't do.

Hence the platform's nod to clean coal. Since the 2005, Congress has handed the Department of Energy $6.9 billion to help develop and promote carbon capture technology, which allows power plants to separate out CO2 from coal emissions and bury it deep underground in rock formations, where it can't escape into the atmosphere. Theoretically, this would be the best of all possible worlds: America could keep using an abundant domestic energy source without heating the planet any further. Obama's stimulus bill chipped in some $3.4 billion towards the endeavor, and the White House has said it hoped to fund between 5 and 10 commercial demonstration plants to prove the concept.

Like so many other cutting-edge green energy ideas, though, what's stopping clean coal from taking off today isn't our technology. It's economics. In a June report, the Congressional Budget Office calculated that it would cost 76 percent more to produce electricity at the first generation of clean coal plants than it would at a normal coal plant. Without significant federal funding, or regulations that put a cost on carbon, there's no reason for a commercial company to invest in the technology.

Which brings us to administration's climate policies. Early on, Obama supported a cap and trade approach to cutting carbon, which would have indeed put a price tag on emissions. In that context, clean coal made some sense, since it might potentially cost more to pay for CO2 than to install carbon capture technology. But thanks to congressional opposition, particularly from conservatives, cap and trade is long dead. Instead, the Environmental Protection Agency has proposed a regulation that would simply put a  limit on the amount of carbon new power plants would be allowed to spew. Electric plants that burn natural gas already meet the standard. Coal generators, on the other hand, would have to cut their greenhouse emissions by 43 percent.

Some believe that would mean the end of new coal plants. Power providers have already been making the switch towards natural gas for about a decade now, based mostly on price. Regulations that would require an expensive carbon-capturing apparatus on coal, and let natural gas plants do business as usual, would be another, extremely large nail in the coffin. As the CBO put it:

"At present...regulatory action to curb CO2 is more likely to shift electricity production from coal to natural gas (without carbon capture and storage) and other low-emission fuels, such as biomass, rather than to carbon capture and storage-capable plants." 

A few of the Obama administration's large demonstration projects, such as a $1.3 billion FutureGen 2.0 development in Illinois, are moving ahead. But others have been canceled as private backers have abandoned ship.

It would be an overstatement to say that clean coal is entirely dead. Some believe that by selling captured carbon to the oil industry, which uses it to pump certain wells, power companies could potentially make the financial math work. But that's still highly speculative. In the meantime, if the EPA's new regulations survive in court, the economic landscape will be titled decisively favor of natural gas.

From an environmental perspective, this might not be a bad thing. There are certainly those who would like to see coal simply dwindle away over time. But it draws into question why the administration is bothering to invest billions into a technology while simultaneously doing its best to make it economically irrelevant. Because as of now, "all of the above" is really on track to mean "everything, except for coal."