LOUISA, Ky. — For generations, coal has been king in this Appalachian town. It provided heat, light and jobs for the hundreds of people who worked in the nearby coal mines and the smoke-coughing Big Sandy power plant that burned their black bounty.
But now, coal is in a corner. Across the United States, the industry is under siege, threatened by new regulations from Washington, environmentalists fortified bymoney from Michael R. Bloomberg, the billionaire mayor of New York City, and natural gas companies intent on capturing much of the nation’s energy market.
So when the operator of the Big Sandy plant announced last year that it would be switching from coal to cleaner, cheaper natural gas, people here took it as the worst betrayal imaginable.
“Have you lost your mind?” State Representative Rocky Adkins, a Democrat and one of Kentucky’s most powerful politicians, thundered at Michael G. Morris, the chairman of the plant’s operator, American Electric Power, during an encounter last summer. “You cannot wave the white flag and let the environmentalists and regulators declare victory here in the heart of coal country.”
Coal and electric utilities, long allied, are beginning to split. More than 100 of the 500 or so coal-burning power plants in the United States are expected to be shut down in the next few years. While coal still provides about a third of the nation’s power, just four years ago it was providing nearly half.
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The decline is largely because new pollution rules have made coal plants more costly, while a surge in production of natural gas through the process of hydraulic fracturing, known as fracking, has sent gas prices plummeting. Together, the economics of coal have been transformed after a century of dominance in Washington, state capitals and the board rooms of electric utilities.
“The math screams at you to do gas,” said Mr. Morris, whose company is the nation’s largest consumer of coal.
Environmental groups, after years of targeting coal plants as leading sources of air pollution, have moved in for the kill. “We never thought we would get to a place where coal plants are falling so fast,” said Bruce Nilles, the director of the Sierra Club’s Beyond Coal initiative. It has been aided by $50 million from Mr. Bloomberg, who views the campaign as part of a public health effort, and $26 million from an odd bedfellow: the top official of a natural gas company.
The environmentalists figure that if they can shut down a third of the nation’s coal burning plants by 2020, emissions of greenhouse gases in the United States could be cut at least as much as they would have under a landmark 2009 climate bill that died in Congress.
But the coal industry is mustering all the weapons it can: lobbying, legislation, litigation and a multimillion-dollar advertising campaign trumpeting the benefits of “clean coal.” The fight has even become an issue in the presidential campaign, with the industry blaming President Obama and the Environmental Protection Agency for the onslaught, and Mitt Romney, the presumptive Republican nominee, hinting that he would roll back some of the rules.
Here in Kentucky, the intervention by Mr. Adkins and other coal industry advocates has saved coal at Big Sandy, at least temporarily. American Electric Power, which is based in Columbus, Ohio, is proposing a $1 billion retrofit to allow the plant to continue burning coal and has asked Kentucky regulators to approve a 30 percent increase in electricity rates to pay for the work.
But that request, which will come up for a vote by the state’s utility commission within the next week, has inspired resistance from some residents, large industrial companies that consume much of Kentucky’s electricity and even the state attorney general’s office.
Pressured on the domestic front, some giant American coal producers, like Arch Coal and Peabody Energy, are shifting their attention to markets overseas, where coal-fired power plants are being built faster than they are being abandoned in the United States.
Even if Big Sandy continues to eat up 90 rail cars of coal a day, the industry’s decline is evident here. Sales to Midwestern power plants have slumped, as has the market price of coal, dropping so suddenly that many local mines are cutting back hours or closing. A warm winter, decreasing demand, only made matters worse.
“I call it the imperfect storm,” Mr. Adkins said. “And it is breaking the back of our local economy.”
A Coordinated Effort
The anger toward Washington is palpable in this impoverished corner of Eastern Kentucky, where miners display bumper stickers or license plates on their pickup trucks with slogans like “Coal Keeps the Lights On” or “If Obama Is the Answer, How Stupid Was the Question?”
It is hard to find anyone here who does not feel affected by the fate of Big Sandy. Just as the smokestack at the plant towers over the countryside, Big Sandy dominates much of life here.
Danny Sartin, 61, a barrel-chested heavy equipment operator at the plant, said his father, grandfathers and uncles all worked in local mines that feed Big Sandy. “Coal and the coal mining industry, it’s all we have ever known,” Mr. Sartin said.
Some of that coal comes from the Licking River mine, about 50 miles south of Big Sandy, where miners rip apart hillsides to reach vast seams just below the surface.
Chris Lacy, 41, an executive at Licking River Resources Inc., said layoffs among his 350 miners — in Magoffin County, where unemployment is already 17.5 percent — are inevitable if the coal furnaces at Big Sandy go cold. Even the garden supply company that Mr. Lacy’s father-in-law owns and where his two sons work indirectly relies on Big Sandy, because mines are required to plant grass over the scarred earth they leave behind. “It is the ripple effect that comes right through us,” Mr. Lacy said.
Channeling the animosity toward Washington and fears about their livelihoods, coal producers, union leaders, landowners and railroads came together to pressure American Electric Power to back down on its plan to close the coal furnaces at Big Sandy. They have leaned on county judges, state legislators and other politicians to attempt to silence public criticism of the 30 percent electricity rate increase and to pressure the Kentucky Public Service Commission to approve the retrofit project.
Saving coal, they argued, justified the rate increase, which would cost the average residential customer about $472 a year in addition to the typical $1,580 annual bill today.
“I will grant you it is going to cost a lot of money to retrofit that plant,” said Nick Carter, the president of a company that represents landowners whose properties hold billions of tons of coal reserves. “But how many teachers will be laid off and how many churches will have to close if Big Sandy stops burning coal?”
At Dee’s Drive Inn Restaurant, a fixture on Main Street in Louisa, the patrons are split.
Fred Klinebriel, 58, a disabled former steelworker, said his father was a mine worker and his brother a trucker who moved coal. But if keeping coal means an even bigger electric bill, he is not sure it is worth it. “I am up against the wall right now as it is,” he said. “I guess you are damned if you do and damned if you don’t — or at least we are here in coal country.”
Environmental Issues
What went largely unspoken in the dozens of pages of e-mails, letters and other pitches these players have churned out in the fight to keep the plant open were the perils of coal, which extend far beyond mine accidents and black lung disease.
The Big Sandy plant spews tens of thousands of tons of pollutants each year into the region’s air, including sulfur dioxide and smaller amounts of mercury, which can cause health problems like respiratory illnesses and possibly developmental disabilities among children. Many of these pollutants would be significantly reduced with the retrofit, but the plant would continue to be a major source of carbon dioxide, which is blamed for global warming.
Big Sandy also maintains a sprawling coal ash pit near the plant, created to store waste ash after the coal is burned, that the E.P.A. recently listed as one of 45 “high hazard” pits nationwide. That means it “will probably cause loss of human life,” the E.P.A. says, if a serious accident occurs. In Tennessee in 2008, a billion gallons of slurry from a coal ash pit washed out area homes and streams, though no deaths resulted.
Meanwhile, federal regulators have accused the owners of Licking River of dumping debris, known as spoil, from another nearby mine into a local valley, harming wildlife and an intermittent local stream.
Mr. Lacy, the Licking River executive, says such concerns are overblown. Instead, he talks of a conspiracy by environmentalists and the Obama administration to destroy the way of life here in Kentucky.
“I at least have to give them some credit,” he said. “It has been well played on their part, very methodical, step by step.”
Some of the regulations the industry finds objectionable, though, had their origins in a Republican administration. In 1990, President George Bush proposed and Congress approved sweeping revisions to the Clean Air Act, authorizing the E.P.A. to regulate emissions of mercury, arsenic and other toxic airborne chemicals. The agency determined in 2000 that it had the power to limit such emissions from power plants, but a weak rule issued under the second Bush administration was successfully challenged in court by environmental advocates.
The Obama administration, acting under court order, issued new standards in December that would require more emissions reductions by all but the top-performing plants. Gina McCarthy, the director of the Office of Air and Radiation at the E.P.A., said that accusations of collusion between the agency and environmental advocates were unfounded.
“Coal will continue to be a large part of electric generation in this country for a long time,” Ms. McCarthy said in an interview. “I just hope it is cleaner.”
Mr. Lacy is hardly convinced. As he drove through the Licking River mine during a shift change one recent afternoon, his face reddened.
“If they keep this up, the people who live here are going to have to move somewhere else, like during the Depression,” he said. “This place is suffering in a bad way.”
Unlikely Allies
Tacked up on the wall in a cramped office in Columbus, Ohio, that serves as the Midwest headquarters for the Sierra Club is a map of the United States with the headline “Coal Plants Under Target.” Dozens of color-coded pins form a giant U shape — from Minnesota, south to Missouri, east to Kentucky and then up to Ohio — with each marking a plant that the Sierra Club is determined to shut down.
For years, the group filed lawsuits to try to force utilities or federal regulators to comply with pollution-control laws and organized public opinion campaigns to try to block the construction of plants. But the change in the energy marketplace has given the environmentalists an extraordinary new weapon: the pocketbooks of consumers.
“The coal industry used to be able to get away with murder, here in Ohio and throughout Appalachia,” said Nachy Kanfer, 27, a Sierra Club organizer. “Not anymore.”
In late April, Mr. Kanfer and other Sierra Club staff members traveled to Kentucky to testify before the Kentucky Public Service Commission. They argued that American Electric Power should not be allowed to retrofit Big Sandy — an argument they are making in many states — because there are less expensive alternatives to deliver power.
Elsewhere, the Sierra Club and other environmental groups are also pressing local officials in metropolitan areas to help shut down coal-burning power plants. In Chicago, for example, Mayor Rahm Emanuel recently announced that the city’s last two coal-fired plants would close in 2014, four years earlier than expected.
One of the most important early allies in this fight was Aubrey K. McClendon, the chief executive of Chesapeake Energy, who donated $26 million starting in 2007 to help the Sierra Club with its campaign.
The company also donated millions of dollars more to the American Lung Association, which used the money, in part, to run “Fighting for Air” television commercials. Some of the most recent ads in the campaign feature a baby coughing, wheezing and then crying while sitting outside a coal-fired power plant.
The Sierra Club came under attack from other environmental activists for accepting money from Mr. McClendon, whose company has a financial interest in killing off its competition but burns a fossil fuel itself. Mr. Nilles, the director of Beyond Coal, now views it as a mistake. “We would not do it again,” he said.
Other deep-pocketed donors have stepped in, including Mr. Bloomberg, whose intervention has infuriated Kentucky officials like Mr. Adkins, the legislator.
“Mayor Bloomberg should stay in that high-rise condo or his mansions,” Mr. Adkins said, “and eat his caviar while we keep his lights on in New York City.”
Big Coal has hardly conceded defeat in this multifront war.
The industry has increased political campaign contributions in the last four years to historic levels, with 80 percent of those donations going to Republicans, according to the Center for Responsive Politics. Companies like Arch Coal, which used to spend only about $100,000 a year on lobbyists in Washington, invested $5.7 million to push its case during the first three years of the Obama administration.
And even as American Electric Power plans to close 5 of its 21 coal-burning plants and rely much more on natural gas, it still intends to retrofit 12 plants. That means it will be burning coal for years to come. A rise in natural gas prices could also slow the decline of coal as a power source. So the company has joined with old allies in Washington to try to delay the new rules and block any future ones.
The industry and its supporters have also gone to court, filing lawsuits challenging E.P.A. rules that limit pollution from coal-burning plants from crossing state lines and the mountaintop mining rules that are holding up new permits in Kentucky and West Virginia — legal fights that the industry has had some success with so far.
But the regional agency that coordinates electric power delivery in the mid-Atlantic and the Midwest cannot wait for the battles to be resolved. This month, it auctioned off the rights for utility companies to supply electricity that will be needed to make up for what is lost through coal plant retirements. Most of the new power is fueled by natural gas.
“It’s an unprecedented transition,” said Michael J. Kormos, senior vice president for operations at PJM Interconnection, the regional group that coordinates power delivery for 60 million people in 13 states. “But whatever happens, we have to make sure we keep the lights on.”
By ERIC LIPTON
Published: May 29, 2012 The New York Times
Photo Credit: http://feww.wordpress.com/2008/08/27/amazing-images-of-the-day-mountain-top-removal/
