Big Coal's Dirty Move

A dozen or so gasification plants are in the works around the nation, and the technology is championed by a number of industry heavyweights, including Bechtel, Siemens, Shell and GE. But Wilder dismisses this new technology as "a gleam in someone's eye." Instead, TXU touts the possibility of one day being able to capture carbon dioxide from conventional plants — an idea that, at the moment, is decades away from being ready for commercial deployment. It's a common rhetorical trick in the industry: Ignore technology that is here today — and keep churning out pollution — while touting solutions that may never exist.

The irony is, TXU's plan to build more coal plants may not only wreck the environment — it could also wreck the company. Although the plants would be obscenely profitable if they were up and running today, Wall Street analysts point out that TXU's business model includes a number of risky financial assumptions about future power demand and plant construction costs. But the biggest gamble may be the company's view that it will be able to dump carbon dioxide from the plants into the atmosphere for the next fifty years without paying any significant penalty. But what if, instead of being exempted from future regulations, the plants are forced to pay for all 78 million tons of pollution they generate each year? And what if the rapid advance of global warming drives up the price of carbon dioxide far beyond the projected range of five dollars to twenty dollars a ton? No wonder venture capitalists like Vinod Khosla, a Silicon Valley pioneer who is now investing in biofuels and solar thermal technology, see conventional coal plants like the ones TXU is building as an unwise financial risk. "You've got to be crazy to build a traditional coal-fired power plant these days," Khosla says.

So far, though, TXU executives don't seem worried. They expect to get approval for its eleven new plants this summer and begin construction soon after. And they're already talking about expanding beyond Texas with another fleet of new coal plants in other states. By pushing ahead so heedlessly, they are essentially betting the company on the belief that most Texans — and most Americans — would prefer to risk epic storms, droughts, crop failures and polluted air rather than fight to save the planet. It's a deeply cynical move, and one that exposes the need for new federal laws and institutions to keep politically influential corporations like TXU from strip-mining the future for their own short-term gain.

A few weeks ago, Jim Marston, the director of state climate initiatives for Environmental Defense, met with Mike McCall, the senior executive in charge of the coal-plant expansion for TXU. Marston hoped to find some common ground with McCall, some acknowledgment that TXU is willing to address the growing public concerns about the new coal plants. It never came. "He basically patted me on the head and said, 'We have this all figured out,' " Marston recalls.

Afterward, Marston realized that he had encountered such breathtaking arrogance in a power-company executive only once before. It took him a while to remember who it was: the former CEO of Enron, Jeff Skilling, now serving twenty-four years in federal prison.

[From Issue 1018 — January 25, 2007]