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Common Currency: Don't dismiss coal as energy source just yet

Alan Zemek

"Power from Coal Mines by Wire Seen as the Next Big Economy; Conversion of Fuel at the Source Would Mean Cheap Electricity in Every Home and Factory."

When this newspaper headline ran Sept. 30, 1923 the concept of large-scale electric generating stations was still so novel that the vocabulary to describe the technology of power transmission through an energized grid hadn't even been invented yet.

Two decades earlier, visitors to the 1901 Pan American Exposition were dazzled by a night time skyline illuminated by the artificial light of thousands of electric lamp bulbs strung across the pavilions, building and streets of Buffalo New York.

The generating turbines at Niagara Falls, 25 miles away, comprised the world's first large scale electric power plant. Nikola Tesla, a Serbian immigrant, had perfected the three- phase alternating current standard for safe and efficient distribution of electric power over long distances in the 1890s and it is still in use to this day.

But it was in the 1920s that the potential for large- scale coal burning power plants to radically transform the productive capacity of the economy and raise standards of living captured the imagination of the American public, and it sparked an unprecedented economic boom.

The "Roaring Twenties" were called so for a reason. All through the boom years of the '20s, newspaper headlines breathlessly reported on the explosion in production capacity and the insatiable demand for more power.

New power plants were running at peak capacity as fast as they could be built. Electric companies were the darlings of Wall Street, and a virtual deluge of borrowed money flooded into highly leveraged investment trusts and utility holding companies as speculators poured into the market. (We would call them hedge funds today).

Then, an unfortunate commentary by a Republican Senator kicked the stool out on March 29, 1929. The headline that day read: "Norris Urges Sale of Power by State; Objects to Private Profit," with the subhead, "Nebraskan Declares the People Should Have the Benefit of Electricity at Cost."

The stock market crash of 1929 was still more than six months away, but the die was cast. Populist politicians threatening to nationalize an industry whose growth had been financed by over leveraged investment trusts because it was "too profitable" quickly iced the mood on Wall Street and the sell-off began.

And then the margin calls came in. And then the Federal Reserve cut the money supply and liquidity when it should have expanded both. And what followed that was a dozen years of economic depression and social chaos....

Now fast forward to 2011 for a lesson in cognitive dissonance: Did you know since 1982 per capita consumption of electricity has increased 32 percent? Where is all that power coming from? For the most part, it is still prosperity powered by coal. Government mandates now require power companies to increase their sources of renewable energy, yet the alternatives have their own perils. And nuclear? Forget about it.

Photo voltaic solar panels have long been touted as an environmentally sound alternative to "dirty" coal-fired power plants, but they must become substantially cheaper before they will gain wide consumer acceptance. In 2011 Solyndra, a solar panel manufacturer funded with half a billion dollars of federal loan guarantees, declared bankruptcy because....wait for unexpected 40 percent drop in the price of solar panels. Huh?

Also in the news this year: Despite state and federal permits and approvals, environmentalists in California filed a lawsuit to halt construction of the 392 Megawatt Ivanpah solar thermal project in the Mojave desert because it might impact the habitat of the desert tortoise.

In Washington and Oregon, a region-wide blackout was narrowly averted this summer when gale force winds from a Pacific storm overloaded the grid with more power coming off wind turbines than the system could safely handle.

It is also now known that wind turbines kill bats and song birds and create blind spots on weather radar. But who knew?

And finally, just last Sunday 194 countries at the United Nations climate changes talks in Durban, South Africa agreed to four separate accords that will mandate a global treaty by 2015 to start enforcing reduction in green house gas emissions by 2020.

We've come a long way since generating electricity was described as "power from coal mines by wire." Eventually something better will come along, but don't think too badly about coal. You probably charged your cell phone battery with it.

Alan J. Zemek is a Park Rapids area developer and author of "Generation Busted: How America Went Broke in the Age of Prosperity." You can follow his blog, or comment on this article on his website, www.genera