Colorado Coal and Natural Gas Showdown to Herald National Fight?

Colorado Coal and Natural Gas Showdown to Herald National Fight?

Image CC licensed by Flickr user iagoarchangel

A bill that would require Colorado's largest utility to switch coal-fired power plants to cleaner fuels such as natural gas is heading to the state Senate in the next week.

The legislation is pitting the coal and natural gas industries against one another in what some are calling a potential dress rehearsal of a fight that could play out on the national stage as Congress grapples with climate change legislation.

Here's the background: Lawmakers, Colorado Gov. Bill Ritter and Xcel Energy agreed on the foundation of the Clean Air-Clean Jobs Act, which would require Xcel to retire or retrofit coal-fired power plants located along Colorado's Front Range by late 2017, while replacing the facilities with ones powered with cleaner fuels.

The utility would submit its plans for reducing nitrogen oxide emissions by up to 80 percent to the state Public Utilities Commissions by Aug. 15.

The move is intended to improve air quality and reduce regional haze ahead of the any directives from the U.S. Environmental Protection Agency, which gave the state until this year to comply with haze requirements. If not, it would impose its own plans.

The natural gas industry and environmentalists support the Colorado bill but the coal industry opposes it, arguing it will drive up electricity costs and cost jobs in the state's mining sector, although the vast majority of its coal is exported. According to Business Week, the American Coalition for Clean Coal Electricity is spending nearly $2 million on an advertising blitz focusing on how coal is cheaper than natural gas.

Although the bill is aimed at improving air quality, switching from coal to natural gas as a combustion fuel also has positive implications for addressing climate change since natural gas is less carbon intensive than coal. Many tout natural gas as a fuel source that could lower emissions in the short term until the economy can more fully shift to a low-carbon infrastructure.

A report released last week by the Brattle Group, however, said it is unlikely natural gas will displace coal generation unless the price of carbon dioxide reaches high levels under a greenhouse gas cap-and-trade program.

But climate bills currently under consideration in Congress likely won't push the cost of carbon that high, while free carbon permits promised to the coal industry "may keep coal plants operating longer and more frequently than they otherwise would, again limiting gas demand growth." Energy efficiency efforts and a push toward other renewable energy generation will also reduce natural gas demand.

The natural gas industry has long felt the powerful coal lobby received a disproportionate amount of protections in the Waxman-Markey climate change bill passed by the U.S. House of Representatives last summer. Last week, BP's chief executive called for lawmakers to reconsider their stance on natural gas.

"We've got to find a better way to create jobs than preserving coal jobs," Tony Hayward said during a speech at the Peterson Institute for International Economics, GreenWire reported

Image CC licensed by Flickr user iagoarchangel.