My local Montana
newspaper ran a letter not long ago complaining about the cost of
wind power. The only thing that lets wind power compete with good
old coal-fired electricity, the writer said, was the 1.9 cent per
kilowatt-hour subsidy that a wind producer gets for the first 10
years of production.
If only it were that simple. The
only thing that lets good old coal-fired electricity compete is
that it gets subsidies no one even thinks about. Many subsidies
come through the tax code. If a coal producer, for example, sprays
his coal with diesel oil, the IRS suddenly recognizes that coal as
an “alternative synfuel” eligible for a tax credit that
currently amounts to $3 billion per year.
But the largest
subsidy to black electrons isn’t through the tax code, it
comes from the coal industry’s license to pollute, a subsidy
that is expanding in its ability to impoverish the rest of us.
The biggest part of this subsidy is related to climate
change. Worldwide, coal-fired electricity is the source of 25
percent of carbon dioxide emissions; thus it does much to damage
the polar ice caps and create the unstable weather nearly everyone
around the globe is experiencing. In the 1960s, severe weather
caused $50 billion in damage over a 10-year period. In the 1990s,
the damage from severe storms, flooding and drought was almost $300
billion. Insurance covered less than 30 percent of the losses.
It’s safe to say that the coal industry did not cover the
rest. So that counts as a subsidy.
Hurricanes, typhoons,
the peril of the polar bears and the drowning of low-lying islands
in the Pacific are the most dramatic effects of global climate
change. But here in Montana, and throughout the Rocky Mountain
West, we are seeing more subtle signs of the change. We see our
trees and perennials blooming earlier — weeks earlier, in come
cases — in the spring. We see a decent winter snowpack melting off
weeks earlier than in the past, depriving ranchers, farmers and
gardeners of even mid-summer irrigation. We note that some ski
companies are up in arms about global climate change because
they’re already seeing the damage it is doing — and will do
— to their industry.
But to really measure how big a
subsidy coal-fired electricity gets, look at what it would cost to
create the level playing field that coal-fired power plant
proponents say they want. By level, I mean a field on which coal
would produce the same amount of pollution that wind produces,
which means no emission of mercury and no carbon dioxide, to say
nothing of no nitrogen oxides and no sulfur dioxides.
Coal is already pretty good, though not as good as wind, when it
comes to the oxides of nitrogen and sulfur. But it is very bad when
it comes to mercury. Cleaning up coal’s mercury emissions
would add two-tenths to five-tenths of a cent per kilowatt-hour to
your bill. That means if you paid 10 cents per month before,
you’d pay 10.5 cents afterward.
Then there’s
the big one: carbon dioxide. The leading plan for eliminating
coal’s carbon dioxide emissions is to bury the gas in
exhausted oil and gas fields. Only a few sequestration projects
currently exist. According to a 2007 MIT study, The Future of Coal,
none of those has the capabilities necessary to resolve outstanding
technical issues, at scale. Thus all costs are based on limited
experience. The best estimate is 2 to 5 cents a kilowatt-hour,
according to the Intergovernmental Panel on Climate Change. Tote up
the costs of dealing with mercury and carbon dioxide, and
you’ll find that coal gets a hidden subsidy, so far, of
roughly 2.2 to 5.5 cents per kilowatt-hour. That makes wind’s
federal subsidy of 1.9 cents look pretty puny.
To begin
getting us to a playing field where coal and wind subsidies are
closer to being the same, let’s repeal the subsidy for
treated and blended coal-mine waste and other giveaways in the tax
law. And let’s impose a carbon tax to fund renewable energy
and mercury cleanup, as well as carbon dioxide sequestration. Until
then, it would be nice if backers of old king coal stopped whining
about public-policy support for clean energy. After all,
coal’s advantageous share of public money has gone on for
decades. It’s time to put some dough into a cleaner world.
Russ Doty is a contributor to Writers on the
Range, a service of High Country News in Paonia, Colorado
(hcn.org). He heads New World WindPower LLC and is also executive
director of the Green Electricity Buying Cooperative in Billings,
Montana.
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