Dick Cheney Gets Coal-Fired

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There's gold in them thar smokestacks

You could call it by its twenty-dollar title, or you could just call it the Fossil Fuel Club. Either way, it meets most Wednesday mornings in the Vice President's ornate Ceremonial Room. Around the conference table sits a group that includes Dick Cheney and Commerce Secretary Don Evans, both oilmen; Treasury Secretary Paul O'Neill, who chaired the electricity-guzzling aluminum maker Alcoa; and Energy Secretary Spencer Abraham, the former Michigan Senator who attracted wads of campaign cash from energy companies in a losing re-election effort.

Welcome to the the National Energy Policy Development Group, formed earlier this year by President George W. Bush to plot an energy future that is less reliant on foreign oil and less vulnerable to natural-gas price spikes and shortages. "If these were easy issues, the Clinton Administration would have taken care of them," Vice President Cheney told TIME. His group meets in secret — much to the chagrin of Democrats, who were attacked by the opposition when Hillary Clinton's infamous health-care task force operated behind closed doors. Hillary tried in vain to sort the winners from the losers in health care. In the Fossil Fuel Club, everyone's a winner.

The big prize in Cheney's energy sweepstakes will go to a resource of which America has a 250-year supply and a nasty history: coal. Last week Cheney aides summoned its champions to a White House auditorium to give them the good news. There were West Virginia coal baron James (Buck) Harless, who raised at least $100,000 as a Bush "Pioneer"; Stephen Addington, president of Kentucky-based AEI Resources, whose executives gave more than $600,000 to Republicans last election; and lobbyists for Peabody Energy, the biggest digger in the country, whose chairman gave the Republican Party more than $250,000 last year. Money to burn, perhaps. "We were told coal is an important part of the Administration's energy strategy," says Bill Raney, president of the West Virginia Coal Association, who came to Washington with scores of other carbon enthusiasts.

Certainly coal has some positives. It is plentiful, accessible and cheaper to transport than gas or oil. Despite those benefits, coal was orphaned by the Clinton Administration as a sooty legacy of the Industrial Revolution, responsible for everything from acid rain to increasing incidence of asthma. And because of the high costs of pollution controls on coal-fired plants, utilities have turned to cleaner-burning natural gas for 90% of new plants. But by Cheney's estimate, the country will need at least 1,300 new electric-power plants over the next 20 years. And coal, which already generates more than half of U.S. capacity, is a logical choice to power many of them.

Cheney insists that "good politics is a sound energy policy." But coal has political energy that other fuels can't match. It's plentiful in the political-battleground states of the Midwest and Southeast. West Virginia, the capital of coal, provided Bush his margin of victory in electoral votes and marked a G.O.P. breakthrough. Sources tell TIME that White House political director Ken Mehlman cited Bush's victory in that Democratic presidential stronghold as a reason why he should renounce a campaign pledge to regulate carbon dioxide, a major coal pollutant. "The current political climate is the best we've seen in many years," says a major coal-company lobbyist.

Task-force sources say coal-fired electric utilities are likely to get an easing of environmental rules for modified plants, a change that would be worth a fortune in new coal consumption. The industry has already reaped benefits from the Bush team, with executives named to key jobs at Commerce, Interior and other departments. Coal representatives helped man Bush transition teams, putting them in position to lobby against CO2 controls from the inside. Just before the President flip-flopped on the greenhouse gas in March, he visited West Virginia and pledged that he would "convince many in the country who don't believe we can have a clean-air policy and burn coal at the same time."

Among those who need convincing are environmentalists. They view the Administration plans to spend $2 billion on "clean coal technology" as a wasteful subsidy to an industry that has long dodged pollution controls. Harmful emissions have been reduced 70% since 1970, but critics argue there has been no cut in CO2 emissions, a major culprit in global warming.

The coal industry is busily helping the Administration make its case. The National Mining Association brought in as its president Jack Gerard, a well-known Republican lobbyist and former Senate aide with easy access to the new White House. A coalition of mining companies, coal transporters and electricity producers known as Americans for Balanced Energy Choices is funding a $10 million ad blitz to improve coal's image. Another group, called the Coalition for Affordable and Reliable Energy, or CARE, is focused on Washington policymakers, plastering pro-coal posters on the capital's subway system.

Coal isn't the only winner. The Cheney task force is nearing approval of other proposals that have the energy industry humming:

—Nukes are suddenly on the table again, even though the industry has not ordered a domestic generator since the Three Mile Island disaster 22 years ago. And the panel is considering new money for research into disposing of nuclear waste, the most toxic garbage ever created.

—For oil and gas, the task force will recommend exploration on sacrosanct federal lands — including the controversial Alaska National Wildlife Refuge — and possibly offshore tracts.

—Plans to encourage new electricity grids — our power lines are shot — and gas pipelines stand to be recommended.

—Development of renewable fuels such as solar, geothermal and wind will get tax credits.

Bush has held three working sessions with the task force, which is scheduled to send its report to the printer's this week. The President is planning a high-profile rollout in mid-May, including three days of travel to sell his proposals. If that doesn't heat up America's energy debate, blackouts in California and elsewhere this summer should do the job. Democrats in Congress, which must approve many of the panel's ideas, are relishing the opportunity to brand Bush as an environmental rogue. Beyond that, there's the nimby problem. California might be going dark, but would Republicans living in Santa Barbara approve a new coal-burning or nuclear plant in their backyard? Would anyone?