Coal must change its public image to survive

OREANDA-NEWS. August 12, 2016. The US coal sector must rehabilitate its public image and gain bipartisan support for fossil fuels in Congress if a more favorable regulatory environment is ever to be achieved, industry leaders say.

The industry faces "a problem of public perception which translates into political and regulatory repercussions," H Quest Vanguard chief executive George Skoptsov told participants yesterday at the American Coal Council (ACC) conference in Park City, Utah. "Coal has basically become a four letter word."

This has created an environment ripe for anti-coal regulations.

"The administration's efforts to diminish coal really are bookended by (the US Environmental Protection Agency's) Clean Power Plan on one side, which is blocking coal consumption, and the Interior Department's stream protection rule on the other side, to block coal production," ACC chief executive Betsy Monseu said.

The stream protection rule alone "could shut the industry down," CoalBlue project president and former Alpha Natural Resources executive Jon Wood said. CoalBlue is an initiative focused on encouraging congressional Democrats to support clean coal legislation.

But there is little public outcry against environmental regulations, aside from those concerns raised by the industry itself. Wood said this is because the public does not understand some of the concerns about system reliability and energy price spikes associated with a move towards an electric grid powered entirely by renewable sources.

"The decline in coal's market share contributes to an attitude of ‘Well, we have gone from 50pc to 30pc. Well, maybe we can go to 20pc or 10pc or even to zero,' " Wood said.

Coal interests need to create proactive media strategies to get their message out, Tri-State Generation & Transmission Association senior external affairs advisor Drew Kramer said.

When a federal judge revoked an expansion permit for Tri-State's Colowyo mine in response to a lawsuit filed by an environmental group, the utility was able to gain public support by emphasizing the hundreds of potential job losses the court decision would create. The story became "about jobs and saving the community" rather than climate change, Kramer said, and Tri-State was able to secure bipartisan support from Colorado legislators and business interests.

But improved public relations is not going to solve all of coal's problems. In recent decades, "the environmentalists have gained control of the situation" because they understand how to exploit administrative procedures that make it easier for federal agencies to issue regulations than for US Congress to legislate them, US Chamber of Commerce senior vice president Bill Kovacs argued.

The EPA "issues almost twice as many regulations as the IRS," Kovacs said. In recent years, this has included what he calls "mega regulations" – those projected to cost industries more than \\$1bn.

Federal agencies rely on the fact that even if the rules they issue are ultimately overturned by the courts, industry most likely will have completed irreversible compliance work by the time, Kovacs said. That is what happened with federal mercury standards. Kovacs wants to see automatic stays of new regulations subject to legal challenges because "agencies should not be able to destroy industries until their rules are determined valid."

According to Wood, the way to save the coal industry is not to ignore the public's concerns about climate change, but rather "to create greater bipartisan support for a coal-inclusive, clean energy agenda."

Industry leaders pushing the CoalBlue agenda have gotten Democrats to sign on to legislation supporting clean coal technology by convincing them that "there is no realistic path forward on climate without low carbon coal" and that a 100pc renewables grid would make electricity prohibitively expensive, Wood said.

Kovacs noted that industry advocates were able to get legislation streamlining permitting through Congress by recruiting Democrats. He warned against relying on Republican presidential nominee Donald Trump's promises to have federal agencies immediately review all regulations and possibly repeal them.

"We are a country of laws," Kovacs said, and agencies "cannot just come in and suspend" rules a new administration does not like. Moreover, agencies are already required to review their regulations every seven years.

They key is working through Congress, Kovacs said.

But the coal industry has been slow to support bipartisan initiatives. Wood noted that his former employer, Alpha, never supported CoalBlue. But with the industry's current partisan strategy, "we are not winning many battles in the policy arena," he said.

Skoptsov wants to see more federal support for developing technology that will find new uses for coal, such as the creation of synthetic graphite – something that his company is working on. But "there is absolutely no interest at the government level in supporting technologies like this," he said. He noted that last year's Department of Energy budget for technology development for converting coal to liquids was \\$5mn, and this year's requested amount is zero.