Energy

Enviros Warn Propping Up Struggling Clean Coal Plants Could Cost Billions

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Chris White Tech Reporter
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Subsidizing failing clean coal could cost billions of taxpayer dollars over the next four decades, according to a report by a Washington, D.C.-based environmentalist group.

The report, titled “Coal Tax Subsidies: A Boon For Kemper,” argues that taxpayers will be on the hook for more than $4.5 billion if the lame duck Congress decides to dump more cash on Southern Company’s Kemper coal plant in De Kalb, Miss. The beleaguered project is already billions of dollars underwater and years behind schedule.

“This disaster is billions of dollars over budget and years behind schedule,” Lukas Ross, a climate campaigner at Friends of the Earth, said in a Tuesday press statement. Kemper is a stark reminder of why carbon capture and sequestration is a waste of our tax dollars and a false solution to the climate crisis.”

Environmentalists are not alone in their condemnation of the subsidies.

“Squandering more tax dollars on carbon capture for coal plants like Kemper is just throwing good money after bad,” Autumn Hanna, senior program director of Taxpayers for Common Sense, which co-authored the report with Friends of the Earth, said in the press release.

Hanna added: “Extending or expanding these tax breaks makes no sense and will cost taxpayers dearly.”

Democratic Sens. Heidi Heitkamp of North Dakota and Sheldon Whitehouse of Rhode Island introduced a bill in July to dramatically increase subsidies for coal plants using so-called clean coal sequestration (CCS).

The bill would “more than double the tax breaks, to $50 per metric ton of permanently stored CO2 and $35 per metric ton of carbon dioxide captured for use in enhanced oil recovery and other newly authorized activities,” Politico reported at the time.

The credit was initially part of the Wall Street bailout in 2008 and created one of the biggest tax breaks for CCS.

The subsidy was never meant to be permanent and was timed to expire after 75 million credits – as of September, companies have claimed credits for nearly 45 million tons of captured carbon. The U.S. Department of the Treasury estimates the current subsidy will expire by 2019.

The North Dakota Democrat wants more subsidies for CCS coal plants because her state is dependent on coal for 75 percent of its energy. The Environmental Protection Agency’s (EPA) global warming regulations will likely force more coal plants to close down unless they use CCS.

EPA’s so-called Clean Power Plan requires North Dakota reduce carbon dioxide emissions from power plants by nearly 45 percent, and EPA effectively banned building new coal plants unless they use CCS.

Kemper was slated to cost $2.4 billion and come online in 2014, but that was nearly $5 billion ago – the coal plant’s price tag now stands at $6.9 billion. Now the plant is not expected to start pumping coal until early next year.

The Mississippi plant is not the only clean coal taxpayer bleeding entity.

The Department of Energy (DOE) announced in 2015 it was pulling out of a major CCS project in central Illinois, called FutureGen 2.0, after awarding it $1.1 billion.

DOE spokesman Bill Gibbons said FutureGen 2.0 turned into too much of a boondoggle to keep open using taxpayer dollars.

“In order to best protect taxpayer interests, the Department of Energy has initiated a structured closeout of federal support for the project that will help maximize the value of investments to date while minimizing ongoing risks and further costs.”

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