Can Anyone Spell Cartel?

Washington, DC -- Big Coal has always been nasty and mean. But with its back to the wall, it gets nastier. For years now, natural gas producers have been pointing out the truth that among the fossil fuels, gas is uniquely clean. That's basic chemistry -- a molecule of gas has four hydrogen atoms and only one carbon, whereas oil and coal get progressively more dependent on heavier carbon atoms for their energy content, which is why oil is a liquid, and coal a solid -- and neither a gas.

Yes, you can produce gas in dirty ways or in the wrong places -- but the fuel itself is vastly better than coal or oil, if not as good as efficiency or renewables. And there's nothing new about gas producers pointing this out -- you could find ads for "clean gas" decades ago.

But as coal's carbon intensity gets more and more attention with global concern about global warming, coal is suddenly sending not-so-subtle messages to gas producers that if they keep reminding the public of their product's advantages, they can expect some vicious responses. For example, the American Clean Skies Foundation, supported by natural gas producers, ran an ad recently going after our dependence on foreign oil, and touting natural gas as a cleaner fuel for vehicles. They also ran an ad discussing the recent decision by the Department of Energy to cancel a hugely expensive experimental effort to test technology for sequestering carbon dioxide from coal-fired power plants, the inaptly dubbed "Future Gen" Project. Denise Bode, of American Clean Skies, said "the Department of Energy deserves a round of applause for its well-founded decision to back out of the original agreement for the $1.8 billion FutureGen project. Among the reasons given by DOE officials for 'folding the bet' on the project to develop 'clean' coal-fired generation was that there had been huge cost overruns -- it had started with a projected price tag of $800 million."

So who cried foul? ExxonMobil, whose product was really trashed? Nope. The oil industry's not really worried -- yet. But coal is. So the National Mining Association, on behalf of its coal mining members, fired off a not even vaguely veiled threat. In a letter to Bode, NMA's CEO, Kraig Naasz, claims that the ads are off base. "Your advertorial is seriously misleading. Whatever reasons may have prompted the Department of Energy to renege on its commitment to the FutureGen project, rising costs is not a compelling one. Escalating costs of manpower and materials that have affected virtually every power project over this period were easily foreseen..."

Since dozens of public utilities have been canceling power plants because they said their rising costs had NOT been foreseen, and have assured their shareholders that these impacts COULD NOT have been foreseen, one wonders just where NMA stores its crystal ball. I imagine we would all like a look at it. And if cost overruns were not DOE's real reason for canceling Future Gen, what did motivate them? Was it that they concluded the technology wouldn't work, period? Or are we expected to believe that Dick Cheney has suddenly joined the Sierra Club in a secret conspiracy to deprive America of its God-given right to burn coal?

More importantly, NMA rattles their sabers -- and, in doing so, reveals an ugly truth that almost everyone in Washington knows but which it is not politically correct to mention in polite company. NMA accuses Bode and Clean Skies of breaking the unwritten cartel agreement among energy producers:

"As a diatribe against coal utilization and research, it marks a disturbing departure from the understanding we tacitly share in the energy sector to avoid denigrating competing fuels. Doing so enrages policymakers, distracts attention from our common goal of increasing supplies of every fuel to meet America's growing energy needs and invites public rebuttals from competing fuel producers. The interests of natural gas producers will not be enhanced in such an environment..."

Here NMA is telling part of the truth. Historically, the American energy market has been a narrowly controlled cartel in which producers might try to grab contracts from each other by underbidding on price, but when it came to public policy, they all ganged up on the public interest. And now natural gas is breaking away and finding its own voice, and Big Coal is very, very -- well, enraged is the word that comes to mind.

This is not the first time the coal industry has threatened that if natural gas producers keep pointing out that they have a better product for the environment, then coal will use its political connections to take retribution. I've heard these stories on the Hill for the past six months. But now they are putting it in writing, yet another sign of their desperation.

Adam Smith would not be surprised. He always said that competition, real competition, was not something that businesses mostly really liked. But it's good news for all of us that the fuel cartel is breaking apart, and that a new constellation of energy sources and approaches that can contribute to solving global warming -- each in its own way -- is beginning to emerge.

But everybody better watch their back. DC is full of dark alleys.

Comments

[PROUD TREE HUGGER]

gas is fairly cheap as well.

[Chris Dudley]

A freind passed on an email from you about John McCain's record on environmental votes. He got a zero from the League of Conservation Voters because he skipped every vote ranked. You note that his missing vote was crucial last week and it was crucial earlier as well for retaining RPS in the Senate version of the energy bill, so the LCV score card contains at least one crucial missed vote as well, one where his single vote would have made the difference.

By contrast, Clinton and Obama missed 4 out of 13 votes on the score card, all the same votes and differed only on water resources planning with Obama drawing a negative score on this issue. None of the four missed votes appeared to be crucial. Obama has a higher score than Clinton in the previous congress.

I think that what we are seeing with McCain is definitely a pattern. He is generally hit or miss on the environment but I would think that he has allowed his run for president to make him avoid votes that might be used against him in the primaries or cause him trouble in his fund raising. On the crucial two votes, he is undermining his state's interests since Arizona will surely be above RPS owing to its great solar resource and could thus benefit from supplying renewable energy to other states. Thus, the pattern is troubling not just because it looks like a pander, but because it seems to show an unwillingness to serve the people who elected him to office.

This is getting to an interesting race. Kraig Naasz appears to be sponsoring the debates and questions about the environment are very few. McCain goes to a solar factory to get Schwarzenegger's endorsement but misses crucial votes. He also seems now to be able to raise much more money than he is allowed to spend. Where will Naasz spend all of his money now? Surely not just on writing mean letters to people. I'm sure you saw the one he wrote to James Hansen.

In any case, thanks for paying attention to McCain and his record.

[Mary Sweeney]

We read above: "Yes, you can produce gas in dirty ways or in the wrong places -- but the fuel itself is vastly better than coal or oil, if not as good as efficiency or renewables."

What, exactly, makes natural gas "vastly better than coal or oil?" Are we interested only in how the natural gas burns? Is that the sole criterion? Shouldn't we, as environmentalists, be just as interested in the "dirty ways" in which the fuel is produced? Shouldn't we be interested not just in the carbon footprint of burning the gas, but also in the carbon footprint of producing the gas? And shouldn't we also be interested in all forms of pollution and environmental degradation associated with gas extraction? Isn't looking at the big picture the whole point of environmentalism? Isn't it our failure to look at the big picture that plunged us into the global warming crisis in the first place?

I am one of the millions of people who live above the Marcellus Shale, an "unconventional" gas source that lies beneath much of PA, NY, W. VA., and Ohio. Gas extraction from the Marcellus Shale has already begun and is expected to accelerate greatly in the coming decades. Shale gas extraction is an incredibly dirty, dangerous, industrial process involving the burning of a large amount of diesel fuel and the use of large amounts of toxic chemicals. The gas industry enjoys exemptions to many environmental laws, including the Clean Air Act, the Clean Water Act, and the Safe Drinking Water Act. In order to extract significant amounts of gas from the Marcellus Shale, something like 50,000 to 100,000 gas wells will be needed. These wells will be located in our communities, next to our residences and schools; they will be located on our farmland and in our forests; and they will be located next to our streams and lakes and rivers and water wells.

I cringe whenever I hear the word "clean" uttered in the same breath as the words "natural gas." What a disappointment, Mr. Pope. Surely, you--and the Sierra Club--can do better than this.