Green New Deal Appeasement Leads Nowhere
It is frustrating to watch people who should know better, including politicians, state regulators, and even leaders of traditional energy companies, play along with the green energy transition. Any day now, I expect a modern-day Neville Chamberlain to say that in the war on carbon, it is peace for our time.
The rationale offered is that cooperating with the Net Zero agenda will buy some time for traditional energy producers. I understand that there is pressure concerning quarterly financial disclosures, but appeasement will only end one way. The time is coming when your upcoming quarterly financial reports will be your last. Efforts to go along to get along will not be enough.
The sad story of North Dakota’s largest coal-fired power plant, Coal Creek Station, should be an important lesson for anyone involved in carbon-based energy. The prior owner of Coal Creek was Minnesota-based Great River Energy, which has come under growing pressure from the Minnesota Public Utilities Commission to rethink its coal dependency and was looking at its options, including mothballing the dependable plant that was producing reliable and affordable electricity for 1.7 million consumers in Minnesota and Wisconsin.
In 2021, Rainbow Energy, based in North Dakota, agreed to buy the plant. The sale closed in mid-2022. Rainbow Energy’s plan to save Coal Creek Station included a large-scale carbon capture and storage project. That plan should have been music to the ears of Green New Dealers.
Rainbow Energy’s carbon sequestration plan had several significant technical hurdles and it was also going to be expensive. The company’s initial estimate was that pumping the CO2 back underground would take 30 percent of the power produced by Coal Creek, and that estimate will be low if the plan is fully implemented.
The plan got another boost when the (ahem) Inflation Reduction Act was passed by Congress, which included a boost in the 45Q tax credits from $50/ton to $85/ton. The carbon capture and storage plan not only checked the 45Q tax credit boxes, but it made the electricity produced green enough that Great River Energy agreed to buy the electricity (at least the output left over after capturing and storing the CO2) for 10 years. Great River Energy CEO David Saggau said, "Purchasing energy and capacity from Rainbow was not in our original plan, but it will serve as a reliable steppingstone in our power supply transition.”
It looked like a win for coal and a win for appeasement, but there was a catch. There is always a catch.
Earlier this year, the Environmental Protection Agency (EPA) gave notice to Coal Creek Station, now named Rainbow Energy Center, that it is considering the denial of a permit for its coal ash disposal system. The comment period for this proposal closed on April 15, 2023, and if EPA follows through, the power plant will be shut down for three years.
The impact on the electric grid will be significant. According to reports, Rainbow Energy Center generates nearly half of the electricity in North Dakota and 40 percent of the power exported to other states.
North Dakota governor Doug Burgum said the EPA “is moving the goalposts after the game started.” He is right, but the larger lesson is not getting through to the coal, oil, and natural gas sectors. Appeasing those who want you gone is a fool’s errand.
Rainbow Energy Center is the poster child in the multi-front war on carbon, but the signs are everywhere. In April, EPA announced aggressive plans to crack down on power-plant emissions. For anyone who believes in karma, these rules also target natural gas-powered plants. Early on, the natural gas sector quietly, and not so quietly, applauded the attacks on coal. A short-lived tactic, as it turns out. Also, last month, EPA announced three settlements with natural gas plants for air pollution violations.
Then last week, in an example of the ever-shortening time lapse between conspiracy theory and fact, New York lawmakers and Gov. Kathy Hochul agreed to ban natural gas hookups in new construction.
At the federal level, the three-letter agencies continue to make laws as actual lawmakers navel gaze. The U.S. Supreme Court announced it will finally take up a case aimed at the agency authority under the Chevron Doctrine next term. So, maybe a year from now, the out-of-control federal agencies may lose a bit of their power.
The future looks increasingly dark for the coal, oil, and natural gas sectors. So, what can consumers expect from embracing the “all of the above” energy policies backed by Democrats and Republicans across the nation? Expensive and unreliable energy.
Wind generation cost consumers in Ontario in April more than $2,000 per MWh. In Pennsylvania, environmentalists forced a company to drop plans for a $1 billion gas-fired plant. And, because the green boondoggles in the Inflation Reduction Act did not go nearly far enough, Democrats in Congress are back with Green New Deal 2.0.
But none of this is a surprise. Countering the green agenda with facts is a no-win game. It will take a different approach. We are at a fork in the road, to the left, continued appeasement. This path is so short we don’t need to pack a lunch. To the right, confrontation, pushing back on the comfort of go along to get along.
If I owned a coal-fired power plant, I would consider a 60 to 90 day planned maintenance outage starting July 1. It is time that people begin to understand what their future holds. Appeasement does not end well. Atlas, it’s time to shrug.
Bette Grande (email@example.com) is a senior fellow for energy and environmental policy at The Heartland Institute.
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