As the national debate over global warming continues to heat up, companies looking to build coal-fired plants in the United States are finding it tougher to move ahead with their plans.
The latest roadblock came Monday, when a judge in Georgia ruled that a $2 billion coal-burning power plant project couldn't move forward unless its developers, LS Power and Dynegy (NYSE: DYN), limit the plants' carbon-dioxide emissions. The developers received an air-pollution permit from the state earlier this year.
The decision by state Judge Thelma Wyatt Cummings Moore marks the first time a recent U.S. Supreme Court decision connected carbon dioxide to an air-pollution permit.
In April 2007, the Supreme Court ruled that carbon dioxide is a pollutant that can be regulated under the federal Clean Air Act.
Moore’s decision also put on hold what would have been Georgia's first new coal-fired plant in more than two years. The plant would have belched out 9 million tons of carbon dioxide annually and, according to the Sierra Club, had no restrictions on the amount of CO2 it could emit.
The Sierra Club sees the ruling as a tool for stopping similar projects from getting regulatory approval elsewhere in the country. But that may not happen, given that the federal government doesn’t regulate carbon-dioxide emissions.
The White House has thwarted efforts by the U.S. Environmental Protection Agency to publish a roadmap for regulating carbon dioxide and other greenhouse-gas emissions, reported The Wall Street Journal on Monday.
Without a federal standard in place, lawyers representing the Georgia plant's developers have suggested that the state's ruling could "short-circuit" federal efforts to develop rules for regulating carbon dioxide and other greenhouse gasses, according to The Wall Street Journal.
Controversy over traditional coal-fired plants has continued to grow. New York Attorney General Andrew Cuomo in September subpoenaed five energy companies to determine whether plans to build coal-fired plants would result in previously undisclosed financial risks from greenhouse-gas emissions. New Jersey filed an appeal in federal court seeking a review of an Environmental Protection Agency decision allowing a coal-fired plant right across its border in neighboring Pennsylvania.
Due to coal's polluting reputation, investors haven't been keen on backing coal plants. A prime example is the $45 billion buyout of Texan power company TXU that closed in October.
Private-equity firms Kohlberg Kravis Roberts & Co. and TPG bought TXU but had to promise its investors that they would cut plans to build eight of TXU’s 11 proposed coal-fired plants
Still, as energy demand continues to rise, coal remains an attractive source of energy. The U.S. Department of Energy expects world coal consumption to increase by 74 percent from 2004 to 2030, reaching 199 quadrillion British Thermal Units annually.
But even that hasn't gone very smoothly. A heavily federally-funded research project aimed at building a "near zero-emission" coal-fired power plant called FutureGen imploded earlier this year when project became too costly for the government (see Clean Coal Firms Not Worried About FutureGen Setback and Picking a Fight with the DOE).
The DOE is now looking to put that money elsewhere. Last week, it announced it would invest $1.3 billion in clean-coal projects.