Fine Print - June 2011

Duke Energy’s coal, coal heart
By G.D. Gearino

I don’t know how much I’ll like having Duke Energy Corp. as my power company. I’ve been a customer of Raleigh-based Progress Energy Inc., which Duke is proposing to swallow, for so long that I remember when it was called Carolina Power & Light. We’ve grown accustomed to each other. But I’ll say one thing for Charlotte-based Duke: It sure knows how to electrify any conversation about the environment.

It starts at the top. Duke CEO Jim Rogers (cover story, May 2010) is a guy with an odd, and seemingly contradictory, reputation: He’s environmentally concerned and aware, as well as being a notable spewer of mammoth amounts of carbon into the atmosphere. (Rogers personally doesn’t do the spewing, of course; I’m talking about his company, whose coal-fired power plants make it one of the most prolific emitters of carbon in the country.) A writer for The New York Times Magazine sought to get to the bottom of this contradiction three years ago, albeit without much success. After pointing out that Rogers hobnobs with environmental activists and generally supports their concerns about climate change, the writer noted that even after eight months of studying and interviewing Rogers, he never once heard the Duke CEO refer to his “polar-bear moment — the instant when [he] realized the earth is imperiled.” Rogers’ environmentalism isn’t passionate, apparently; if anything, it’s strangely wonky.

Then there’s the ongoing saga of the new coal-fired power plant at Duke’s Cliffside Steam Station, scheduled to come on line in 2012. Environmentalists hate it, largely because it’s a $2 billion-plus investment in coal power at a time when climate change is the cause du jour. For its part, Duke Energy points out that the new plant will use the most efficient technologies to curb emissions and will replace older generating units that are less climate-friendly. If it turns out that carbon emissions from Cliffside decrease in the long run, activists have in effect been protesting on behalf of the carbon-spewing status quo — and against improvement.

All this brings us to the present. In the interest of not contributing any further to the ravaging of West Virginia’s landscape, Duke Energy has expressed its desire to stop using “mountaintop coal,” despite its relative cheapness. But it turns out it can’t — because regulators like cheap coal more than they like the environment. See what I mean? Duke has a true gift for making things interesting, if not outright bizarre.

Perhaps you’ve read about the mining of mountaintop coal. It happens mostly in West Virginia, a place that can be reasonably described as a giant lump of coal with a thin veneer of soil covering it. Traditional mining — drilling holes deep into a mountainside and hauling coal out — is labor-intensive, dangerous and costly. Mountaintop mining is easier, cheaper and requires fewer people. Basically, you cut down all the trees, blast the top off the mountain and haul away the exposed coal. What’s not to like about that? Well, water pollution, for one, as the piles of rubble leach nasty stuff into streams every time it rains. Then there’s the fact that you’re left with a bunch of decapitated mountains, which doesn’t exactly help with tourism and such.

Those problems were enough for Duke to ask its coal suppliers if it was possible to forgo mountaintop coal without prices going up. The answer according to The Charlotte Observer (and I’m paraphrasing here) was: “Not a chance.” The best suppliers could do was to guarantee that 10% of the coal wouldn’t come from blasted mountaintops. Above that, the price goes up. North Carolina regulators drove that point home, reminding the Observer that state law requires public utilities to supply power at the lowest possible price — meaning it’s actually illegal for Duke Energy to help the environment by paying a little extra for nonmountaintop coal.

I’m always entertained when the law of unintended consequences asserts itself. Who doesn’t appreciate the irony of a government that employs thousands of people to prevent environmental degradation in North Carolina also employing a separate group to ensure environmental degradation in West Virginia? Adding to the entertainment was the Sierra Club’s reaction. Its state director opined that Duke “needs to move beyond” coal and suggested that wind power could fill the gap. A few statistics, harvested from a recent Atlantic magazine article about the energy industry, are in order. At the moment, coal-burning power plants provide 46% of the nation’s electricity. The next three sources combined — nuclear, natural gas and hydroelectric — account for 50%. The remaining 4% of electricity is provided by various technologies that can be lumped together in a category called ”other.” Sure, wind power has grown dramatically in the past decade. But it’s still an “other.” The magazine notes that a single mine in Kentucky produces enough coal in a day to generate “three-quarters as much electricity ... as all the solar and wind facilities in the United States combined.”

In short, our need for electricity — which can only be met through the burning of coal — simply can’t be reconciled with our desire to keep carbon out of the air. And that’s perhaps the most valuable service Duke Energy provides: With all its talk about the environment, it lays bare that undeniable reality.