Date: Sun, 23 Sep 2007 00:52:20 -0400 (EDT)
Subject: Regarding Joe Nocera's column 9/22/07

September 23, 2007

Dear Mr. Nocera:

I write in response to your column "This Climate Is Surely Full of Hot Air",
which appeared in Saturday's NY Times.  While I do not know enough about the
climate change petition to have an opinion on it, I want to point out that
there are some significant misunderstandings in your analysis.

You take the position that it is "corporations have every right to hold [the
view that some gizmo will come along to solve the problem of global
warming], and to act on it in making investments for the future".
Accordingly, you advocate the right of power companies not to disclose the
risks that climate change or change in regulations regarding carbon
emissions will pose for their investors.  You point out that in the past
"air pollution problems have been far cheaper to fix... than anyone thought
at first."

While it is always possible that some unforseen technological fix can solve
any problem we face, it is not the case that the global warming effect is
new science and that no one has been thinking about it.  The science is
unequivocal at this point: we must substantially reduce CO2 emissions in
order to stabilize the climate.  Action must be taken in the next few years
and decades, well within the lifetime of any power plants or other
infrastructure we're building today.  There is already more than two decades
of work in the scientific and policy literature on climate change, and
management of corporations to base their decisions on the position that "we
just don't know enough" is misguided.

Specifically with respect to investors in utilities, you overlook the
fundamental difference between the past forms of pollution and CO2 emission,
which causes global warming.  For example, the cause of acid rain is the
emission of sulfur.  But sulfur is only between 0.5 and 2% of the total
weight of coal, depending on the type[1], and it is incidental to the
process of electricity generation.  Removing it (or using low-sulphur coal)
presents no fundamental challenge to the coal plant.

Mercury in coal has a similar story.

In comparison, the whole purpose of a coal-fired power plant is to burn
carbon, for that is the source of the energy that it sells.  There's no
secret to getting the CO2 from the plant - it's nearly everything going up
the stack.  There is no "gizmo" needed to clean up the emissions; if we are
to prevent global warming what has to be done is either not burn the coal or
sequester the emitted gases, presumably underground[2].

The US is planning the 275-megawatt FutureGen power plant as a demonstration
of CO2 sequestration; it is still in the siting phase, and is expected to
come online in 2012[3].

However, CO2 sequestration cannot be done just anywhere - it depends on the
geology of the area surrounding the plant.

Accordingly, given that power plants last many decades, any reasonable
investor in a coal plant would want to know whether (a) it will be possible
to retrofit the plant do sequester CO2 and (b) if it is possible, how much
it will cost.  It is a virtual certainty that at some point in the fairly
near future it will cost money to buy permits to emit CO2, and the owner of
a power plant that is unable to sequester CO2 will likely find the plant
bearing additional costs, to the point that it may become unprofitable.
It's indefensible to take the position that "we just don't know enough" to
make the utilities do this elemental calculation and reveal its results to
investors.

While the management of a company has the right to believe whatever it
wants, utility investors have a right to know if the company's management is
staking its future on the invention of a speculative "gizmo".

Mitchell Golden

[1] http://www.eia.doe.gov/cneaf/electricity/epa/epat4p6.html
[2] Sequestration in the ocean has also been suggested, but is more
speculative.  If it does work it doesn't change the thrust of the point
being raised here.
[3] http://www.fossil.energy.gov/programs/powersystems/futuregen/