Energy


As one who has followed the sad saga of the experimental coal fired power plant project in Healy, Alaska since 1990, some of the editorials advocating for continued investment in it have been missing some critical points.

Usibelli Coal and GVEA championed a $105 million federal grant to build the plant, though neither incurred much risk. Usibelli wanted to market unsalable quality coal to the plant and GVEA wanted a free functional power plant. Their combined efforts got the State of Alaska to take ownership through the Alaska Industrial Development and Export Authority (AIDEA), with an added $25 million direct Legislative appropriation in 1990. The federal Clean Coal Technology program, initially set up to find ways to reduce acid rain from coal plants, ended up providing $105 million to find out if the two technologies tested worked. They got what they needed, leaving AIDEA with cost overruns and legal bills that now exceed about $200 million more for a total of over $350 million.

AIDEA wants to off‐load the plant to GVEA for $50 million as is. GVEA is in a bind as they allowed the plant not only to be constructed on GVEA property, but to be attached to GVEA’s existing 25 mw Healy plant, through which both plants share infrastructure. GVEA and AIDEA, after nearly a decade of suing each other, have signed a purchase agreement which is very hard for GVEA to back out of, barring 3rd party litigation or failing to get their air quality permit approved.

GVEA estimates $45 million to modify the experimental plant to be acceptable for GVEA to own and operate, for a total of $95 million debt for GVEA. One current milestone is receiving an air quality permit from the State of Alaska with concurrence from the E.P.A. , responsible for reviewing such permits. This plant was constructed next to Denali National Park and the original permit was issued in 1994 with added requirements to not impact the airshed of one of Alaska’s and the country’s natural treasures.

While new elements in permitting power plants are not yet regulated (mercury, CO2), newer technology is now available than from 18 years ago when the air quality permits were last issued. This best available current technology would add $20‐$40 million more to the $45 million retrofit price tag, for a total to GVEA members of $125‐$145 million. I don’t see where this increased cost is built into GVEA’s touted savings of 10% on fuel cost (5% of rate‐payers bills).

I recently reminded the GVEA board recently that members just removed a restriction on outstanding debt no more than $450 million ($350 million was outstanding debt) with public promises from the board that they would be cautious in not over‐borrowing. However, in the past few months, GVEA has announced borrowing for $93 million for Eva Creek Wind Project, over $100 million for trucking natural gas to the North Pole generator, and now over $100 million for buying and retrofitting the experimental coal plant in Healy. These loans mean that in less than a year, GVEA will have doubled the debt to the cooperative. Debt service, interest, and depreciation are the major components of rate‐payers’ utility charge. The board will be incurring 20 years of debt for a promise of short term savings, which are likely to be overshadowed by other economic means of cost reduction, such as natural gas, hydro, conservation.

Some argue that coal as a fuel source makes sense because it is cheap. The only reason it is cheap is because the full external cost to the environment is not included. The EPA was already instructed by the Supreme Court to start regulating CO2. Some Congressmen says that’s Congress’ job, but they oppose doing so. Mercury and coal ash are likely to be factors in the near future. There is a reason that the Rural Utility Service doesn’t loan on coal plants any more. GVEA’s purchase of this plant is a 20 year commitment. It is estimated to take 18 months to get on line, within months of when trucked natural gas is scheduled to begin.

Complicated history, but figure this plant, if restarted, will likely have sucked down nearly half a BILLION dollars if allowed to proceed. I understand rate‐payers want relief from high energy prices, but I believe that re‐starting the experimental coal fired power plant in Healy won’t save us in the long term and will remain the boondoggle that everyone agrees it has become.

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I’ve often noted the oxymoronic expression “Clean Coal”. It’s why I refer to the DOE/State of Alaska funded “experimental coal fired power plant in Healy” instead of the “clean coal technology” power plant. It may just be less dirty than its neighbor plant. By the time GVEA gets done with the rehab though, I’m not sure if it will still be true.

A commercial now airing on some cable channels also takes on this topic, by the Coen Brothers.
http://www.huffingtonpost.com/2009/02/26/coen-brothers-direct-new_n_170196.html

Rep. Les Gara sent a press release along with his requested report investigating the high price of gas, compared to the price of crude oil. Not surprisingly, it shows that refineries are recovering roughly twice what they were as recent as July 2008 and as they had historically. When the Flint Hills North Pole refinery owners say they aren’t investing in keeping up the refinery and wanting to sell it to the State of Alaska, caveat emptor. What I hear from employees even before the excessive profit taking is that they weren’t losing money, just not making as much as they would like.
Here’s the legislative report for your prurient curiosity.

Interesting that Alaska gasoline, with no state gas tax, is higher than Hawaii gas, when we extract and refine our gasoline in state and Hawaii imports everything many thousands of ocean miles. Something is in imbalance up here and odd that folks aren’t in an uprising, considering how volatile Alaskans can be.

Suzy Fenner, a Fairbanks resident, has taken up the mission to put together a grassroots effort to encourage sustainability. You can read about the nascent efforts at scanfairbanks.wordpress.com. I’d been encouraging the development of a clearinghouse of efforts locally and statewide so that we all can communicate and coordinate better. One good source for that has been the Northern Alaska Environmental Center page on global warming, which has a number of good links.

I see that some haven’t given up casting seeds of doubt on working for mitigation of climate change causes and consequences. Resource Development Council board member Paula Easley’s “Sky is not Falling” editorial is a case in point. She grabs at discredited or irrelevant straws to argue that global warming isn’t any fault of ours and, anyway, we will benefit from warmer weather, so get ready. One might think her “facts” sound reasonable unless you know her sources are industry sponsored and/or cherry-picked, and her snide comments about various respected folks that disagree with her. In the same 11/17/07 Newsminer was an article on how the IPCC, a pretty broad group of internationally renown scientists, just released their 4th report on climate change www.ipcc.ch , even more convinced of the need to take action to both mitigate and adapt.

The Resource Development Council has a partisan agenda, representing the legacy extraction industries which look for the short term buck. Alaska, with all our resources, are a part of their world view. Ms. Easley lambastes those for grassroots lobbying for action to address climate change, but not the resource industries who have spent billions lobbying to have it their way. Exxon Valdez settlement delays, millions in feel-good TV, radio, print, and mail out ads? Legislator/congressional payoffs anyone? While some industries may be starting to see the light of preserving our environment for the future, apparently the RDC through Ms. Easley, has yet to get the word.

Reading the Nov. 10, 2007 ADN, MEA (Matanuska Electric Association) announced it is canceling efforts to build a large coal plant in Matsu. They do have issues with not having any of their own generation, but this idea seemed ill advised.

It was reported that MEA will stop pushing this coal plant idea due to poor economics. This seems like face saving. What should be apparent is that, forward looking, there will be less economic incentive to burning coal with CO2 emissions factored in. A wise decision, for whatever the stated rationale.

If those proponents for coal are so gung-ho, why haven’t they worked to buy power from the AIDEA-GVEA-Usibelli experimental coal plant in Healy that cost the state and feds nearly $400 million? Of course, that’s only a 50 mw plant.

Long term decisions need to be made with carbon footprint considerations. We’re all on the same planet (some more than others) and share a common future with climate change mitigation and adaptation. Coal might be plentiful, but about the most destructive form of non-renewable energy in terms of CO2 and toxic emissions.

Seems like a natural gas bridging solution for just in-state use would allow us about 500 years of stability. What’s the big push to export?

That being said, I hope someday MEA will get be able to be less political and confrontational in its approach to getting things done. They may feel besieged, but maybe there is a reason.

I don’t know everyone can walk and chew gum at the same time, but we are in the position of having to change our culture toward the resources we consume or waste. At the same time, we need to start taking obvious and radical actions to reduce our carbon footprint.

Weighty, heavy task. We are continuing to be told the consequences of failing to act. Besides the IPCC, who co-won the Nobel Prize for Peace along with Al Gore, every day we see new impacts of climate change. I heard today that the climate change models were too safe in estimating the CO2 carrying capacity of the warming
oceans. The data shows that in earlier times, similar ocean warming caused mass extinctions. We have an early entry with the polar bear.

I was talking with Alaska Lt. Governor Sean Parnell yesterday evening following a presentation he gave, exhorting UAF students to get active in helping impacted communities like Shishmareff (ocean storms eating away the town) or Hooper Bay (burgeoning landfill). I pointed out that his examples are all attributable to our failure to account for the after-cost of using resources, without those costs being built into the original purchase. What to do with the leftovers after one is finished consuming the part we are interested in? Leftover from burning fossil fuel for heat – CO2 and more. Leftover from that package of Dove bars – plastic and paper. He saw the point, but then said – boy, those are big problems. How are we going to deal with that?

Hello? If we can’t our government leaders willing to take the longer view toward species/biome/habitat stabilization/survival, it’s pretty hard for the ordinary citizen. A fundamental shift in how we value goods and services is required. Non-egoist economic behavior usually manifests itself after a disaster, such as Katrina, or the recent wildfires in southern California. The longer we wait, the more disasters, the more cost to societies.

One of the comments of the Nobel Committee in awarding the Peace Prize to those who were urging climate change mitigation is that, to stabilize the climate would preserve peace, as opposed to war and conflict over diminishing resources.

We’ve known many of the things we need to do to be more intelligent and efficient about the resources we use, what is available to us in the form of non-carbon emitting resources for the energy we do use. We’ve known for decades. And to be fair, we are making some changes, but the time grows shorter as we discuss the more fundamental changes. Even with newer technologies, the old legacy constituencies still keep us from actively recognizing and taking radical actions to change our behavior.

This brings me back to my first point – changing the culture. My view is that, in general, culture can only change from perceived risks and costs. The U.S. is more self-centered, thus more resistant to change. We don’t have a culture of commune-ism, such as Europe has. And we certainly don’t value self-sacrifice. As the leading resource consumer and carbon contributor, we have so much we can do.

Politicians don’t yet feel strongly they have the mandate for that fundamental restructuring of resource economics to cover our kids’ butts. We are still tinkering with mini-projects, suggesting “clean” alternatives such as nuclear (oops, Mommy, I left the plutonium in the oven). Some of the states are starting to get it. Alaska, who holds a fortune in resources, still is pretty tentative, preferring to be powerless in the face of change, just willing to adapt, seeing little opportunity or showing the will thus far to mount the bully pulpit as those like Amory Lovins, Al Gore, Bill McKibben, and James Hansen have been doing for decades.

If action only happens after a whack to the head, then please let me help. Whack, whack, whack?

Oh, and for those who don’t believe climate change is causing all these extreme weather changes? By denying it, you are saying we have no control over it, thus can’t change it and we’ll just have to bear the high cost to our societies to adapt.

And if you don’t believe that man can change the climate, there are still obvious and rational economic reasons to not consume non-renewable fossil fuels so inefficiently. As I told Sen. Stevens some years ago when I asked him to get behind an increase in CAFE standards, let’s get the biggest bang for the gallon we can. There isn’t a need to madly export every last drop out of the North Slope of oil or gas as fast as possible? How about giving it the full value? It makes alternative non-polluting energy so much more attractive.

A fundamental change in how we value our resources is needed. Lots of good ideas are out there. Action is what is needed, as fast as we can. As it is, we’ve done a good job of committing our societies to increased costs of weather damages. Any idea how much it will cost to move southern Florida?

I hesitate to be too cynical with so many positive opportunities for changing that culture and our actions, but climate change inaction just impacted the Doomsday Clock. We were the generation that was going to save the world. Now I have to tell MY kids, “you’ve got a big job, sorry for the mess.”

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