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Utility, coal execs: U.S. needs national energy plan

MORGANTOWN, W.Va. -- America needs a national energy policy that specifically includes the use of fossil fuels and creates a stable regulatory environment that encourages growth and job creation, executives in the coal, natural gas and electricity industries said Monday.

West Virginia University and Republican U.S. Rep. David McKinley, one of two professional engineers in Congress, co-hosted a forum on the nation's evolving energy picture at WVU's National Research Center for Coal and Energy. McKinley and Sen. Joe Manchin, D-W.Va., said they planned to take what they heard back to fellow legislators in Washington.

"I need to see a plan," said McKinley, an advocate of U.S. energy independence. "You can't build anything in America without a plan."

Manchin said he's optimistic about the possibility of developing an "all-in policy," meaning one that includes a role for every source of energy, "not one overbalancing or overshadowing the other."

But Tony Alexander, chief executive officer of Ohio-based FirstEnergy, argued that's the wrong approach. Trying to include everything, he said, will result in a plan with no direction.

Alexander contends any national policy should focus on domestically produced coal, natural gas and electricity. Oil, which is primarily used for transportation and largely produced overseas, has no place in that plan, he said. Nor do subsidies that give one industry an advantage over another.

"The federal government ... should not pick winners and losers in the energy marketplace," Alexander said. "Subsidies and mandates create inefficiencies, lead to higher prices, assume customers can't make decisions on their own and, more importantly, are a tax on the economy and the people."

Paul Koonce, chief executive of Dominion Virginia Power, said regulatory stability is also a critical component. He called the cost of environmental compliance for a typical U.S. power plant "astronomical," and said utilities need stability to function.

There's no point in debating whether fossil fuels will continue to be used, said Brett Harvey, chief executive officer of Pennsylvania-based Consol Energy. Demand for energy is expected to grow 55 percent in the next two decades. Secondary energy sources such as wind, solar and water all require mechanical means to capture and are inherently "less efficient on the front end."

"We didn't get here by accident," he said. "We got here because we were smart."

India and China aren't looking at phasing out any particular source of energy, Harvey argued, and neither should the U.S.

Environmentalists at the forum also acknowledged that fossil fuels would remain part of the picture for the foreseeable future. But Kit Kennedy of the Natural Resources Defense Council said renewables and energy efficiency programs can create jobs, too.

"Building up reliance on wind and solar is not incompatible," she argued, pointing to other countries that have offshore wind farms while the U.S. has none.

"We can do better," she said. However, "it doesn't mean saying goodbye to fossil fuels. That's not how it's going to work."

David Kreutzer of the Heritage Foundation argued against subsidies and legislation that imposes energy efficiency standards. Market prices will drive customers' choices, he said. What saves them money is what they'll embrace.

"When the economics work out, people will switch," he said. "They're greedy."

The panel, which featured nearly two-dozen speakers, also debated whether the sequestration of carbon-based emissions has a role in a national energy plan when it's technologically feasible but not economically viable.

WVU geology professor Tim Carr said storing carbon emissions underground is possible for large, stationary sources such as power plants, but it raises the cost of producing electricity by about 75 percent. No one should expect widespread deployment without investment and support by the federal government, he said.

American Electric Power's Mark McCollough said retrofitting existing power plants would be expensive and would require the diversion of nearly a third of the plant's energy output. Utilities in some countries are reducing their emissions by using pure oxygen in the combustion process, he said, but that's not necessarily cheaper.

"The road map exists" for successful carbon capture, McCollough said. "The funding support for that road map does not."

Gene Trisko, an attorney for United Mine Workers of America, said that could change if Congress passed legislation allowing a small extra fee on customers' electric bills. For about $12 per year per household, he said, revenues of more than $1 billion a year could be generated for large-scale demonstration projects.

Trisko said federal regulations requiring carbon sequestration at new coal-fired power plants may ultimately be overturned in court, "but until that time comes, coal is facing an insurmountable hurdle."

Between that regulation and new mercury emission standards, "we're not in a position to even consider the inclusion of coal within a future national energy policy," Trisko said. "And that, ladies and gentlemen, is a situation that must change."


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