Not surprisingly, TXU’s plan has kicked up a shit storm in recent months — and not just with environmental activists. More than thirty cities and towns representing nearly 7 million people in President Bush’s home state have joined forces to fight the new coal plants. There have been prayer vigils and hunger strikes. TXU shareholders, disturbed by the financial risks of the project, have raised concerns about the rapid coal expansion. Big investment banks like CitiGroup and Morgan Stanley have been warned by environmental groups of the “reputational risks” of financing the project. It has even split Texas’ clubby business establishment: Albert Huddleston, a Dallas oil baron and a major Republican donor, has filed a lawsuit to stop the plants.
“If TXU hadn’t been so audacious, nobody would have paid much attention to their plans,” says Laura Miller, the mayor of Dallas. “But the way they’ve pushed these plants is so brazen, so in-your-face, that it made people realize they’ve got to do something.”
Pissing off Miller was not a smart move. A former investigative journalist who got elected mayor by campaigning against her city’s billionaire boys club, she is now taking aim at Big Coal. Miller, a mother of three, spends many of her evenings and weekends traveling to small towns in rural Texas near the sites of the proposed plants, urging residents to join the Texas Clean Air Cities Coalition, which she formed to make sure that citizens have a voice in the permit process. She has also raised more than $500,000 to study how the new plants would affect the state’s already miserable air quality. Dallas is currently the eighth-most-polluted city in the nation, and Houston is fourth. And because many power companies in the state burn low-grade Texas coal, the state ranks first in the nation in mercury emissions from power plants. Mercury, a potent neurotoxin, can damage the brains and nervous systems of fetuses and small children.
TXU tries to greenwash these concerns away. They ferry toxicologists to city council meetings, where they claim that mercury isn’t really so dangerous. They talk about the hundreds of millions of dollars they are investing in “clean coal” research. They make vague proclamations about voluntarily cutting smog-causing emissions by twenty percent across the board in Texas, but fail to mention that federal law will soon require those cuts anyway. When pressed, TXU executives respond that much of the criticism levied against them is unfair or ill-informed. “I think a lot of the negative reaction to our plan is from people who don’t fully understand the issues, or simply have a knee-jerk reaction against coal,” says Morgan, the TXU spokeswoman.
More infuriating to Miller and others is the fact that the company plans to use old technology in its new plants, rather than embrace the newer and cleaner method known as coal gasification. “If they’re going to burn coal, at least they could do it right,” says Tom Smith, who heads the Texas office of the consumer advocacy group Public Citizen. Although gasification is slightly more expensive — about ten percent — the advantages are many: better efficiency, water consumption, less air pollution. And because the process removes pollutants before the coal is burned, it’s much simpler to capture and store carbon dioxide before it reaches the atmosphere.
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 bio-fuels 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.