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Lying by emission: Peabody Coal can’t handle the truth about the cost of carbon pollution

REUTERS/Christian Hartmann
Coal power is contributing to climate change, biodiversity loss, deforestation, sea acidification and other devastating impacts with huge economic and human costs.

Peabody Energy, the world’s biggest private-sector coal company, is having a tough time of things. As coal prices have declined over the last year, the inaugural title holder of Newsweek’s least environmentally-friendly company ranking has seen its stock price plummet to under $1 and its credit ratings downgraded to sub-investment grade. Last month, in the week leading up to the finalization of the Environmental Protection Agency’s Clean Power Plan to reduce the United States’ dependence on coal, Peabody posted a quarterly net loss of $1 billion.

Leili Fatehi

Also having a tough time is the whole of the Earth and everything living on it. Coal power is contributing to climate change, biodiversity loss, deforestation, sea acidification and other devastating impacts with huge economic and human costs. In Minnesota alone, fossil fuel power production is costing more than $2.1 billion each year in health and environmental impacts. Pollution from Minnesota Power and Xcel Energy’s coal plants alone are responsible for an estimated 2,000 asthma attacks, 200 heart attacks, and 115 deaths per year. And that’s just in Minnesota, a state recognized as a leader in clean power. The national and global costs in terms of lives, health and environmental losses are unconscionable — estimated to exceed half a trillion dollars and to impact the poorest and most vulnerable among us most severely.

Impacts given too little consideration

Federal and state regulators have historically given these types of health and environmental impacts disproportionately little, if not minimal, consideration in the economic cost-benefit analyses that determine whether and how much to regulate carbon pollution. In recognition of decades of mounting scientific and economic research, President Barack Obama formed an Interagency Working Group (IWG) to estimate the social cost of carbon pollution in the U.S. for use in planning and regulatory decision-making by federal and state agencies. Using three different widely recognized models and five different scenarios for future emissions and economic conditions, the IWG produced four estimates with a midline of $40 per ton. Many scholars argue that this figure is significantly low because it doesn’t account for losses to fisheries, agriculture, forestry and environmental services.

This week the Minnesota Public Utilities Commission (PUC) is set to update its estimated statewide costs of fossil fuel production for anything more than inflation for the first time in 20 years. The PUC uses this estimate for financial planning decisions around the state’s electricity production. As compared to the $2.1 billion per year estimated statewide cost, the PUC is using an outdated estimate of between $58 million and $257 million per year. Updating this estimate to account for environmental and health damages will allow for clearer demonstration that the price of electricity from wind, solar and other renewable sources is economically competitive to that of coal in Minnesota.

Concerned that it may suffer a decline to the 1.5 million tons of coal it sold to Minnesota power plants last year, Peabody has hired its own experts to influence the PUC’s decision. Their testimony, with statements like, “If fully cleansed of real pollutants, the exhaust from fossil fuel combustion only differs from a baby’s breath by having almost no oxygen [in it],” demonstrates that Peabody holds the public’s intelligence in the same high regard as their health and well-being.

Major impacts omitted in testimony

In his testimony, Dr. Robert Mendelsohn, an economist who tries hard to provide Minnesota-specific analysis despite never having done Minnesota-specific research, argues that “Minnesota is currently a net beneficiary of warming” because warmer weather and more carbon dioxide would benefit crops and forests. He conveniently omits the impact of floods, droughts, extreme weather, season length change, and the spread of invasive pests and weeds that also flourish in warmer conditions. Nor does he consider impacts to other Minnesota industries like fisheries, habitat disruptions to native Minnesota plants and wildlife, the statewide spread of ticks that deliver Lyme disease, or the substantially rising insurance rates that Minnesota cities, businesses, and individual property owners are paying because of increasing claims for hail and storm damage due to climate change.

Mendelsohn ultimately reveals the value that Peabody places on human lives and the environment:

“[W]e will find out whether or not there are a trillion dollars of damage per year in 2050 when it becomes 2050. If society finds out that climate change is more harmful than we thought, society will react and do more mitigation.”

Peabody in essence is asking us to wait for more people to get sick or die, for more people to lose their livelihoods, and for more environmental devastation before we risk their quarterly earnings. I encourage Minnesotans to tell the PUC to include the true costs of pollution in its energy decisions at the public hearing on Wednesday, Aug. 26. It’s at 2 p.m. at 121 7th Place E., Suite 350, St. Paul, MN 55101.

Leili Fatehi, J.D., is a recovering academic in the legal, ethical, and policy dimensions of science and technology. As part of her treatment, she is chairing Sierra Club’s Political Committee and learning pottery.

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Comments (8)

  1. Submitted by joe smith on 08/25/2015 - 11:09 am.

    With all the new regulations the air coming out of the coal fired plants is cleaner than ever. The scrubbers being used do a wonderful job of taking pollutants out of the air. The war on coal by this administration has been devastating and the promise of green renewables has not materialized as advertised. It is slanted articles like this that are setting the table for “necessarily higher electric costs” (another Obama whooper) so the folks won’t take to the streets when they get their electric bill.

  2. Submitted by Todd Hintz on 08/25/2015 - 11:53 am.

    Coal Costs

    Conservatives should be all for new coal cost estimates and regulations as it internalizes the real cost of coal’s byproducts. This gets to the heart of one conservative mantra: personal responsibility.

    Another bonus in the conservative playbook: it levels the playing field as everyone covers their full cost of production rather than foist it off on the public realm through increased health care costs, degraded environment, and other costs. Typically those costs are all dumped over the fence into someone else’s back yard.

  3. Submitted by John Blomquist on 08/25/2015 - 06:56 pm.

    Horse Manure

    Just like the methane gas that comes from horses and cows behind, Ms. Fatehi, and her left wing buddies like George Soros keep doing more damage to our country with their hot air than any coal power plant. What’s that? Why do I mention George Soros? Because like his other buddy Al Gore, he has sold a bill of goods to the public and then laughed all the way to the bank. Al with his preaching about the dangers of fossil fuels, then selling his cable TV channel to Al Jazzera for hundreds of millions. Need I mention who owns Al Jazzera and how that money came to be? Possibly oil? Now Ms. Fatehi fails to mention, that last Thursday it was announced George Soros purchased huge chuncks of stock in the largest coal company’s in the U.S. ( one million shares of Peabody alone). This is the same George Soros, the billionare, who poured 1 billion dollars into renewable energy and created the left leaning Climate Policy Initiative who publishes 90% of the pseudo science that has “affirmed” the world is going to end because of global warming, and carbon based fuels are all to blame.

    Fast forward to last Thursday, Georgie is now the proud owner of huge chunks of the coal industry, hmmmmmmmmmm wonder why? Wake up America, your being fleeced by power and corruption of the elite martini sucking liberals as they get richer and richer. They have hijacked the media through politically correct bullying, so that if you disbelieve articles like Ms. Fate hi, your shunned and labeled an idiot.

    • Submitted by Matt Haas on 08/25/2015 - 11:45 pm.

      A test

      Put a coal burning stove in your living room, fire it up, sans chimney. Now multiply the effect it has on your living room by, lets say, a billion. Did George Soros climb up on those mountains out east to perpetrate the “hoax” of acid rain too? I don’t care if the coal industry goes under tomorrow, if nothing else it would force our hand in finding something better than the 19th century’s primary source of energy. I find it humorous that conservatives, always so quick to label “innovation”, ” creative destruction “, and “progress” as the sole means of improving society so immediately and completely turn turtle when such things might put a dent in their pocketbooks.

      • Submitted by John Blomquist on 08/26/2015 - 06:02 pm.

        Turning turtle

        First, I’m not a conservative or liberal, I’m an independent voter with strong federalist and libertarian ideals.

        Secondly your comments about conservatives and how they turn turtle, you right I guess their just jealous of the tremendous success of the renewable energy company’s like these, just from the years 2010-2013!

        2009 to 2010

        Bankrupt, closed, acquired

        Advent Solar (emitter wrap-through Si) acquired by Applied Materials
        Applied Solar (solar roofing) acquired by Quercus Trust
        OptiSolar (a-Si on a grand scale) closed
        Ready Solar (PV installation) acquired by SunEdison
        Solasta (nano-coaxial solar) closed
        SV Solar (low-concentration PV) closed
        Senergen (depositing silane onto free-form metallurgical-grade Si substrates) closed
        Signet Solar (a-Si) bankrupt
        Sunfilm (a-Si) bankrupt
        Wakonda (GaAs) closed


        Bankrupt, closed

        EPV Solar (a-Si) bankrupt
        Evergreen (drawn Si) bankrupt
        Solyndra (CIGS) bankrupt
        SpectraWatt (c-Si) bankrupt
        Stirling Energy Systems (dish engine) bankrupt

        Acquisition, sale

        Ascent Solar (CIGS) acquired by TFG Radiant
        Calyxo (CdTe) acquired by Solar Fields from Q.cells
        HelioVolt (CIGS) acquired by Korea’s SK Innovation
        National Semiconductor Solar Magic (panel optimizers) exited systems business
        NetCrystal (silicon on flexible substrate) acquired by Solar Semiconductor
        Soliant (CPV) acquired by Emcore


        Bankrupt, closed

        Abound Solar (CdTe) bankrupt
        AQT (CIGS) closed
        Ampulse (thin silicon) closed
        Arise Technology (PV modules) bankrupt
        Azuray (microinverters) closed
        BP (c-Si panels) exits solar business
        Centrotherm (PV manufacturing equipment) bankrupt
        CSG (c-Si on glass) closed by Suntech
        Day4 Energy (cell interconnects) delisted from TSX exchange
        ECD (a-Si) bankrupt
        Energy Innovations (CPV) bankrupt
        Flexcell (a-Si roll-roll BIPV) closed
        GlobalWatt (solar) closed
        GreenVolts (CPV) closed
        Global Solar Energy (CIGS) closed
        G24i (DSCs) bankrupt in 2012, re-emerged as G24i Power with new investors
        Hoku (polysilicon) shut down its Idaho polysilicon production facility
        Inventux (a-Si) bankrupt
        Konarka (OSCs) bankrupt
        Odersun (CIGS) bankrupt
        Pramac (a-Si panels built with equipment from Oerlikon) insolvent
        Pairan (Germany inverters) insolvent
        Ralos (developer) bankrupt
        REC Wafer (c-Si) bankrupt
        Satcon (BoS) bankrupt
        Schott (c-Si) exits c-Si business
        Schuco (a-Si) shutting down its a-Si business
        Sencera (a-Si) closed
        Siliken (c-Si modules) closed
        Skyline Solar (LCPV) closed
        Siemens (CSP, inverters, BOS) divestment from solar
        Solar Millennium (developer) insolvent
        Solarhybrid (developer) insolvent
        Sovello (Q.cells, Evergreen, REC JV) bankrupt
        SolarDay (c-Si modules) insolvent
        Solar Power Industries (PV modules) bankrupt
        Soltecture (CIGS BIPV) bankrupt
        Sun Concept (developer) bankrupt

        Acquisition, fire sale, restructuring

        Oelmaier (Germany inverters) insolvent, bought by agricultural supplier Lehner Agrar
        Q.Cells (c-Si) insolvent, acquired by South Korea’s Hanwha
        Sharp (a-Si) backing away from a-Si, retiring 160 of its 320 megawatts in Japan
        Solibro (CIGS) Q-Cells unit acquired by China’s Hanergy
        Solon (c-Si) acquired by UAE’s Microsol
        Scheuten Solar (BIPV) bankrupt, then acquired by Aikosolar
        SolFocus (CPV) layoffs, restructuring for sale
        Sunways (c-Si, inverters) bought by LDK, restructuring to focus on BIPV and storage


        Bankrupt, closed

        Bosch (c-Si PV module) exits module business
        Concentrator Optics (CPV) bankrupt
        Suntech Wuxi (c-Si) bankrupt

        Acquisition, sale, restructuring

        Diehl (Germany inverters) inverter division sold to PE firm mutares AG
        ISET (CIGS) moving into “microsolar”
        MiaSolé (CIGS) acquired by China’s Hanergy
        Nanosolar (CIGS) restructuring for sale
        NuvoSun (CIGS) acquired by Dow
        Twin Creeks (kerfless Si) acquired by GT Advanced Technology
        Wuerth Solar (installer) business turned over to BayWa

        • Submitted by Bill Willy on 08/27/2015 - 12:43 am.

          And your point is?

          Do I need to do a Googlooga “bankrupt automobile or tractor manufacturers in American history,” or are you just saying we should stick with coal until it’s gone?

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