NPRA '11: Coal to win any honest debate on US energy policy

29 March 2011 19:11  [Source: ICIS news]

SAN ANTONIO, Texas (ICIS)--A rough economy will force US policy makers to engage in an honest debate about energy policy, pitting coal against renewables, an energy consultant said on Tuesday.

In such a debate, coal would win - even considering carbon dioxide (CO2) emissions - because it is much cheaper than its renewable competitors, said Brian Habacivch, senior vice president of Fellon-McCord, an energy consultancy.

Habacivch was speaking at the Petrochemical Forum at the International Petrochemical Conference (IPC), which was hosted by the National Petrochemical & Refiners Association (NPRA).

Power costs are an important topic among petrochemical producers since they consume so much electricity. A government policy that increases energy costs would threaten margins.

In the past 40 years, the US has adopted several energy policies, most of which were terrible, Habacivch said.

Such policies had promoted renewable sources, which have proved to be expensive and impractical, Habacivch said.

"It has been going on for 40 years, and this is what we have to show for it," he said.

The US produces 4% of its electricity from renewable sources, he said. Within that 4%, about half is wind power and about a quarter is wood derived.

"Renewables cannot fill the gap for future demand-growth for power in the US," Habacivch said.

Ultimately, the US will have to revisit these policies in the light of high unemployment rates, high deficits and consumers adverse to spending, Habacivch said.

Renewables would have to contend with the nation's abundant fossil fuels, Habacivch said.

The US is the second largest coal producer, and it holds the world's largest coal reserves, he said. For other fossil fuels, the US is the third largest crude-oil producer in the world..

The US is the largest natural-gas producer, and conservative estimates give it the world's second largest reserves, he said.

"If you really parse the resources that are available for us, you will find that we are an energy giant," he said.

Any debate centred on carbon emissions would eliminate coal, he said. "Carbonless coal means no coal." However, eliminating coal would cause energy costs to soar, he said.

In a debate pitting coal versus high costs, coal would likely prevail, Habacivch said.

The IPC continues through Tuesday.

By: Al Greenwood
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