Is Coal Golden?

(3 of 5)

But McCall, as TXU's head of wholesale operations, says he needs a low-cost, reliable supply of electricity fast. Plans for nuclear facilities will take nearly a decade to develop. Coal is quicker. Using the company's new "lean academy" philosophy (based on Toyota's manufacturing system), TXU can build all 11 coal-fired plants, cookie-cutter style, with the first online in 2009. Coal gasification simply isn't in TXU's plans, primarily because of problems with the high moisture content of the cheaper Texas and Wyoming coal it buys. Waiting until the next decade, when new technologies are proved, would be "devastating" for supply, warns McCall.

In Dallas, Mayor Laura Miller, a feisty former journalist, isn't buying that argument. The goal of the coalition she helped form with major muscle from Houston--Texas Citizens for Climate Protection--is not to stop the plants, she says, but to make TXU adopt cleaner technologies like gasification. Tampa, she points out with irritation, buys its clean-coal-compatible coke in Houston, after all. So far, she has won over 17 cities and hopes to raise nearly $500,000 to hire the best air-modeling experts and lawyers for the battle. She has no other choice than to fight. The city is already a "non-attainment zone" for smog.

If you go to TXU's granddaddy of coal plants, Big Brown, built in the early 1970s in the rolling hills of east Texas, the sky is a pristine blue above two big smokestacks. That's illusory, since the plant pumps out a steady stream of can't-see-'em pollutants like nitrogen oxide, sulfur dioxide and mercury. Inside, giant HEPA filters (which look just like a nest of vacuum bags) grab most of the solids from the coal fire. You wouldn't want to eat off the floor, but the place is clean. Even the open-pit-mining operation nearby--which has scoured 15,000 acres of Texas for lignite coal over the decades--is a reclamation model, boasting ponds with bass and new woods with baby deer. "The coal plants of today are clearly not like the coal plant of yesteryear," boasts McCall.

Miller, of course, went on a Big Brown tour too and promptly popped open a canister of coal, she says, to shrieks of "No, it's filthy!" from the TXU staff. "They don't see the irony," she says. "'Why would you want to touch the coal?' they asked. My response? 'Why would I want to breathe it?'" TXU estimates the plant emits 82,000 tons of sulfur dioxide, 6,700 tons of nitrogen oxide and 1,180 lbs. of mercury a year--not to mention 10 million tons of unregulated carbon dioxide. Now it wants to add a third smokestack.

McCall is unapologetic about TXU's plans--and so far, the regulators are on his side. McCall wonders how anybody could oppose a plan to build 11 new plants--and retrofit old ones--while lowering overall emissions 20% (that's right, 20% below their current level). TXU would also beat by five years emissions-cap guidelines for the second phase of a federal program to reduce nitrogen oxide by 2010. "I'm worried I'm not being an effective communicator here," he says in frustration during an interview at the company's Dallas headquarters. Although it's the state's biggest buyer of renewable capacity, TXU is now heavily reliant on natural gas, which is subject to wide price swings. A cheaper coal supply would bring down the price of electricity, McCall says, eventually saving customers $1.7 billion a year.