Monitor follow-up: New Mexico coal plant set back

In a Feb. 22 article, the Monitor reported on the proposed Desert Rock coal-fired power plant in the northwestern corner of New Mexico. Sited on Navajo Nation land and supported by the elected Navajo government, the project had encountered stiff resistance from members of the Navajo community and other nearby groups worried about pollution and, in the grander scheme, carbon-dioxide emissions.

In March, a New Mexico House committee voted 7 to 6 not to grant an $85 million state tax credit to Sithe Global Power LLC and the Diné Power Authority, partners in the power-plant project. Although this isn't a deathblow for the $2.5 billion development, the vote, which came at the close of this year's 60-day legislative session, is a setback, says Sithe Global spokesman Frank Maisano.

"Anything that makes the project less competitive is not helpful," he says.

The vote to "table" the bill – put it aside until the relevant committee meets next year – offers a glimpse into how the evolving national debate over greenhouse gases, the burning of fossil fuels, and the next generation of coal-fired plants may play out on a local level.

"We were able to send a very strong signal that the state of New Mexico is not interested in subsidizing old-fashioned coal technology," says Peter Wirth, a New Mexico state representative from Santa Fe who opposed the project from the outset.

The legislative session took place amid intense lobbying from all sides. Supporters continuously reminded lawmakers that the project would bring revenue to New Mexico and jobs to an underdeveloped region. But a variety of factors may have tipped the scales against Desert Rock. On several occasions, Navajo protesters loaded into vans and made the nearly 250-mile drive from their territory to the state capital in Santa Fe to demonstrate against the project. And the national discussion about fossil-fuel emissions and their role in climate change continually framed a project that will emit an estimated 10,500 tons of CO2 into the atmosphere each year.

Proponents, including the elected Navajo Nation president, Joe Shirley Jr., and the majority of Tribal Council members, maintain that Desert Rock will bring much-needed jobs and economic development to an area of chronic unemployment. "When built, it'll be the largest construction project anywhere in native America," says George Hardeen, spokesman for president Joe Shirley. "The good far outweighs the bad."

Opponents, including Navajos living near the proposed 1,500-megawatt plant site and a coalition of religious and environmental groups, say enough is enough. The area already hosts three such power plants. The New Mexico Department of Game and Fish recommends not eating fish caught in area waterways because of high mercury content. Coal-fired power plants are the primary source of airborne mercury. "We're all for economic development," says Elouise Brown, president of Doodá Desert Rock, an organization against the plant. "Just please do it right – without killing us."

For reasons no one can quite explain, during the past year "global warming" has become a catchphrase and "carbon emissions" a badge of shame. Almost immediately after the Democrats took control of Congress last year, there has been talk of carbon regulation.

Some 150 new coal-fired power plants are planned in the US, according to the Department of Energy, the vast majority utilizing pulverized rather than gasified coal technology. This is a point of contention in the proposed Desert Rock project. Gasified coal plants can capture CO2 and other pollutants much more efficiently, making them a favorite of those pushing for cleaner coal-fired plants. But Desert Rock will not use coal gasification; it will instead employ an advanced version of pulverized coal technology.

A recent Massachusetts Institute of Technology study suggested that gasified coal plants, which are some 20 percent more expensive up front, only become economical once carbon capture becomes part of the equation. And this is the problem, says Mr. Maisano: Environmentalists expect companies to proceed as if carbon-capping legislation was already in place. But firms looking to do business now cannot be governed by nonexistent legislation, which, if ever enacted, may take years to wrangle out.

"My assessment is that our project was a victim of a larger discussion right now," says Maisano. "The whole debate has taken on a life of its own, an irrational exuberance, and nobody is thinking how difficult it is to do the hard work of passing carbon regulation."

Changes seem to be near. Senators Jeff Bingaman (D) of New Mexico and Barbara Boxer (D) of California have warned utilities that are building power plants with older technology not to expect to be "grandfathered in" when new carbon regulations hit. In February, two private equity firms seeking to buy the Texas utility company TXU Corp. conferred with environmental groups before finalizing the $45 billion deal. Afterward, the firms agreed not to build eight of TXU's 11 planned coal-fired plants. And in April, the US Supreme Court ruled that the Environmental Protection Agency had to regulate CO2. As a pollutant, it said, carbon dioxide fell under the purview of the Clean Air Act.