Energy choices complicated, expensive
Minnesotans choking on high energy prices nevertheless follow conventional wisdom that locally abundant coal is a "dirty" fuel that shouldn't be pursued for energy independence.
That's the quandary some business leaders and power company officials discussed May 22 in Park Rapids.
"We need a comprehensive energy discussion," said Mark Hewitt, CEO of Northwoods Bank of Park Rapids. "The country could be covered with solar reflectors and windmills and no one wants those either. Yet we're all screaming and crying about what we're paying the oil countries, so I'm confused."
Minnesotans are dependent on their neighbor to the west for much of their power needs, said Steve Van Dyke, communications director for the Lignite Energy Council and Partners for Affordable Energy, a coalition of people, organizations and businesses working to create low cost electricity.
"Fifty percent of the electricity generated in North Dakota goes to Minnesota," Van Dyke said. "Conversely, 30 percent of the power used in Minnesota comes from North Dakota."
But that doesn't mean North Dakota can and will continue to fulfill our energy needs, he cautioned. "Electricity is a crucial component of modern living," he said. "And three- quarters of all Minnesota homes are heated by natural gas."
Although many power companies are looking into using wood pellets, wood by-products aren't necessarily a cleaner source of power, Van Dyke said. Heating with wood pellets causes particulate emissions into the atmosphere, contributing to the greenhouse gas effect.
And although Minnesotans embrace a diverse group of energy sources such as nuclear power, wind power and power from biomass sources, they overlook the plentiful resource of coal. Sixty-two percent of Minnesota's energy needs come from coal power.
But coal is not currently politically palatable because of its reputation as a sooty, dirty emitter of pollutants.
That's an unfair rap, Van Dyke says. "We have a 250-year supply of coal right now," he said. "There has not been a problem that technology hasn't fixed."
Van Dyke said many energy companies, while it's fashionable, are investing in boutique alternative power sources such as wind and solar power to meet the state's ambitious mandate of using 25 percent renewable fuels by 2025 and 80 percent by 2050.
"But that doesn't meet the state's energy challenge," he said. "Wind in its best places is reliable 40 percent of the time. It has to be backed up with something like natural gas," and Van Dyke believes that's not an affordable solution.
Companies need to invest in baseload transmission and transmission lines. "But no one wants a transmission line in their back yard, either," he admitted. That makes it difficult to balance the transmission grid to match power generation with use, Van Dyke said.
Coal companies are undertaking Herculean efforts to change their image - and their emissions. Utility investments include carbon sequestration programs, coal drying, reuse of the byproduct flyash and new technology to clean emissions. Energy companies have invested millions of dollars in co-firing, using coal with biomass to generate power.
In the past the coal industry has solved acid rain issues, mercury emissions and the problems caused by particulate matter escaping into the atmosphere.
The likelihood is that many power companies will have to go to higher cost fuels to meet the mandates.
Mike Monsrud, CEO of Itasca-Mantrap Co-op Electrical Association, said proposed energy legislation could cost customers additional hundreds of dollars annually for electricity, and that's not a solution consumers may be willing to swallow.
Van Dyke said state mandates were set before their economic impacts were assessed, and before cap and trade solutions accompanied them.
Cap and trade legislation seeks to reduce carbon dioxide emissions cost-effectively. Large-scale emitters would have enforceable limits (caps) on the amount of greenhouse gas pollution they could emit over time.
Because it will be easier for some companies to reduce their greenhouse gas emissions than others, the more efficient companies would be able to trade their extra permits to companies that cannot easily meet the mandates.
"We have this huge supply of coal that's our ace in the hole," Hewitt said. "We ought to be allocating resources to develop it. But coal is the bad guy right now. The politics of this is a mess. It's a transfer of wealth from the United States to developing countries."