Good news for coal: resolving the climate debate gives coal a path forward.(Frontlines)(Conference notes)

I met Congressman Rick Boucher (D-VA.) in November. He was speaking to attendees at EEI's Finance Conference in Phoenix, and after his speech many people remarked that they wished other members of Congress were even half as well versed about the utility industry's issues as Boucher seems to be.

Boucher has his finger on the pulse of the U.S. utility industry for good reason. He represents southwestern Virginia, the heart of the Appalachian Basin coal fields, where the economy lives and dies on the fortunes of the U.S. coal-burning power industry. As such, Boucher has advocated coal's interests in virtually every major piece of energy legislation arising before the House of Representatives during his 26-year term.

As chairman of the House Energy & Air Quality Subcommittee, Boucher is leading the charge on two pieces of legislation that might prove vital to the future of coal-fired power in this country. First, H.R. 6258, the Carbon Capture and Storage [CCS] Early Deployment Act, would levy a retail electricity surcharge to finance research, development and demonstration of CCS technology (see "Debating the Boucher Bill," p. 10). Second, together with Rep. John Dingell (D-Mich.), outgoing Chairman of the Energy & Commerce Committee, Boucher is advancing cap-and-trade legislation aimed at reducing U.S. greenhouse gas emissions 80 percent below 2005 levels by 2050.

Despite today's all-consuming economic worries, these pieces of legislation stand a good chance of being enacted in the new Congress. At the EEI conference, Boucher said climate legislation would be among Congress's top priorities in 2009--an observation that seems especially believable now with environmental advocate Rep. Henry Waxman (D-Calif.) taking the gavel in the House Energy & Commerce Committee. Further, President-elect Barack Obama confirmed recently that climate change would be among the top priorities of his administration--second only to economic recovery.

On the surface, carbon regulation might seem like bad news for the coal-fired power industry--and bad medicine for a suffering economy. But protracted uncertainty about greenhouse-gas regulation has paralyzed many types of infrastructure investments--more so, in fact, than any politically and economically viable legislation likely would. Ironically, by clearing the logjam of regulatory uncertainty, enacting climate legislation now will get coal moving forward sooner.

"Carbon constraints are coming very quickly," Boucher said. "We've designed a bill that can be economically digestible and will not dislocate any sector."

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