Coal Controversy

March 8, 2009

Coal Controversy
Glenn Puit 3/9/09

When people in the Rogers City area first heard of plans to build a new coal-fired power plant on the shoreline of Lake Huron, most thought it was great news.
After all, the town badly needs new jobs.
But the residents of this once-booming port city probably did not imagine that, almost three years later, the proposed plant would be part of a raging controversy over Michigan’s energy future. Nor could they have thought that the plant’s fate might hinge on the bold, new, green-energy policies that Governor Jennifer Granholm announced during her 2009 State of the State address as a cure for Michigan’s economic hard times.
Those hard times have long weighed on Rogers City. Until the 1960s, the place enjoyed good times, thanks largely to “The World’s Largest Limestone Quarry” just beyond the city limits. Add to that a fleet of freighters that called the town home port, carrying the quarry’s ore to the American steel industry’s smelters.
But when the steel industry moved overseas, it hit the town’s quarrymen, longshoremen, and sailors hard. Rogers City has never recovered; while it remains a remarkably attractive place, the blank windows of empty storefronts reflect years of double-digit unemployment.

THE NEWCOMER
So Wolverine Power Supply Cooperative’s proposal for a 600
MW coal-fired power plant in the
quarry—a proposal it calls the “Clean Energy Venture”—drew big cheers in Rogers City when it was unveiled in May of 2006.
“The most often-asked question I get is, ‘When is it going to get here?’” said Rogers City Mayor Beach Hall. “It makes extremely good sense. It is a good utilization of land and utilization of our transportation resources... it’s well away from the community, and relatively inconspicuous.”
Not everyone in Rogers City agreed, however. Some residents told county planning commissioners, state hearing officers, and neighbors that the plant would harm their health, environment, and quality of life; sharply increase their electricity rates; and pose a huge financial risk for ratepayers and local governments—all for a small number of jobs.
Meanwhile, another, much larger issue emerged that spread opposition to the plant across the state: During the 18 months after Wolverine unveiled its plan, coal plant proposals surfaced in seven other communities, creating a veritable Michigan coal rush.
Since then, the state has fully approved one small plant in Marquette (it is now facing a court challenge), tentatively approved and held state hearings on two others (in Rogers City and Holland), and is expecting applications from two more, in Bay City and Lansing. Projects in Midland, Alma, and Manistee are still in their preliminary stages.
That unprecedented level of coal-powered activity, however, raised questions about Governor Granholm’s drive to create tens of thousands of new, green jobs by moving Michigan’s energy economy into the 21st century. And that, observers say, is why the governor used her State of the State address not only to dramatically expand her push for a green energy future, but also to order at least a temporary halt to the coal rush while the state determines exactly what its future power demands are—and whether there are better ways to meet them than by burning more coal.

Conflict in Rogers City
In Rogers City and Presque Isle County, the ongoing Wolverine debate has raised questions about local loyalty, civic responsibility, and conflicts of interest. Some businesspeople are boycotted because they oppose the plant, and several county planning commissioners endured heavy criticism for raising questions about the county special use permit (SUP) that Wolverine obtained to build the coal plant.
Last summer, the local dispute escalated into conflict of interest charges against Presque Isle County’s top elected official, county commissioner chair Alan Bruder.
Chairman Bruder received close to $100,000 from Wolverine and one of its owners, Presque Isle Electric & Gas Co-op, while sitting on their boards during the three years that the plant proposal was being prepared and then presented to the county for approval. During that time, Bruder voted for a county commissioners’ resolution supporting the plant that went to the planning commission. That body, which he helps to supervise, then promptly approved the coal plant’s SUP.
Critics say that the chairman’s acceptance of the money from the two co-ops without full public disclosure -- combined with his advocacy for his employers’ proposal -- is a conflict of interest.
“Not only should all of that have been on the table and completely disclosed to the public, but Mr. Bruder should have recused himself from any action or supporting resolutions,” Rich Robinson, director of the non-profit Campaign Finance Network, in Lansing, observed.
Traverse City Attorney Kristyn Houle, writing on behalf of a township official in the county, urged officials there to examine whether Bruder violated the Michigan Public Servant Act. Houle argues the chairman’s actions may invalidate Wolverine’s SUP.

TOXIC FUEL & WASTE ISSUES
Meanwhile, another Presque Isle County official, planning commissioner Brian DeLong, faced strong local repercussions for questioning the proposed plant’s SUP last summer, two years after the county approved it. Mr. DeLong challenged Wolverine’s claim that the permit allowed the company to burn petroleum coke (“pet” coke), a toxic oil refinery waste product, in addition to coal, after he spotted what he said was a fuel change in the company’s state air permit application.
He persuaded his fellow commissioners last fall that an additional SUP public hearing was necessary before the company could burn pet coke. But in December, with that local hearing still pending, DeLong was removed from the planning board. He said it was because he asked questions about pet coke and waste disposal that the county was unable to answer.
“I knew I would not be reappointed,” he said. “I’m not one of the good old boys and didn’t bow three times to the commissioners and kiss their asses.”
In fact, it remains unclear exactly how the company will protect nearby Lake Huron, adjacent porous aquifers, and residents from tainted rain and snow runoff from the plant’s huge pet coke piles and voluminous toxic fly ash waste. The company seems to want to leave the piles uncovered and bury the waste in the quarry.
Another former county planning commissioner, Tom Harkleroad, first questioned the company about waste disposal in 2006, when it applied for its SUP. Mr. Harkleroad pointed out that the application indicated the toxic waste might be buried below Lake Huron’s water level—a problem because the lake’s water constantly seeps into the quarry and is then pumped back out into it.
The cooperative has said little about its waste disposal plans. Wolverine briefly addressed the issue almost a year ago, during a March 18 county planning commission meeting; spokesman Ken Bradstreet said questions about the landfill were already answered. He promised the “landfill will be sited above the lake level” and added that he “hopes these comments will put the issue to rest.”
However, Wolverine’s opponents say the recent billion-gallon coal sludge landslide that damaged a river in Tennessee—and press revelations since then that coal ash storage is poorly regulated both nationally and in Michigan—makes that hope seem unlikely.

CHALLENGE FOR GRANHOLM
Meanwhile, even as Wolverine’s opponents tried to persuade local and state officials that the proposed plant could harm Rogers City more than it would help it, green energy proponents warned the governor that allowing a coal rush in Michigan would harm her plans for modernizing the state’s energy economy.
They argued that even one new plant would flood the state with unneeded new coal power amid declining electrical demand and predictions that the decline would continue for years. That, they said, would discourage entrepreneurial companies that want to use Michigan’s dormant factories to make hundreds of things—from tiny solar cells and LED bulbs to gigantic wind turbine blades—that the world needs to cleanly produce or save electricity. Those entrepreneurs, they said, want to invest in states with forward-looking energy policies that build large markets for their products.
But the governor said little about the coal rush even as various citizen groups pushed against it. Those groups—including Roger City’s Citizens for Environmental Inquiry and statewide organizations such as the Sierra Club, Progress Michigan, the Michigan Environmental Council, and the Michigan Land Use Institute—either sued, circulated petitions, or wrote detailed legal letters pushing the governor to delay plant approvals until the state established regulations for their huge amounts of CO2 emissions, the chief manmade cause of climate change.
Granholm used her State of the State address to respond.
She announced a jobs plan that even the governor’s sternest green critics said was remarkably aggressive, comprehensive, and well thought-out. Michigan, she said, would cut its fossil fuel consumption for electricity by 45 percent by 2020—one of the most ambitious such goals in the country—and use that goal to accelerate its budding green jobs rush.

BUILDING AN INDUSTRY
To accomplish that goal, the governor said she would align the state with the Obama administration’s economic recovery program. The state would establish home, business, and government efficiency programs self-financed by their energy savings; allow utilities to profit from helping customers save energy; and allow homeowners and entrepreneurs to profit from installing green energy sources and selling their electricity.
“How will we do this?” she asked the lawmakers. To rising applause, she continued: “Instead of spending nearly $2 billion a year importing coal or natural gas from other states, we’ll be spending our energy dollars on Michigan wind turbines, Michigan solar panels, Michigan energy-efficiency devices, all designed, manufactured and installed by Michigan workers.”
Then, noting that her efficiency proposals would further reduce the state’s already declining electricity demand, the governor said that, until the state better determines its energy needs—and whether new coal plants are the most “prudent and feasible” way to meet them—her administration would delay pending coal permits.
“The governor’s speech clearly recognizes the arguments that have been building against coal-fired power plants all over the country,” said Tom Karas, director of the Michigan Energy Alternatives Project, a Traverse City-based program that works closely with the Michigan Land Use Institute. “There really is no place for a carbon-spewing industry in a state that wants to go forward with a green energy economy.”

MONEY MATTERS
As in Rogers City, not everyone in Lansing thinks that Granholm’s directive will permanently stop the coal rush.
But Lee Sprague, a clean energy campaign manager for the Michigan Chapter of the Sierra Club, said that all of the plants are now in trouble—and it’s mostly about money.
“She raised the bar that the utilities have to cross, and it’s a very high bar,” Sprague said of the governor. “They are going to have to make the argument as to why coal is a better deal, and I don’t think they can.”
Sprague points to the Sanzillo Report commissioned last year by Karas. It found that Wolverine would have to at least double its electricity rates to pay for its new coal plant, even without the new CO2 regulations that most utility executives acknowledge are coming soon.
The Federal Energy Regulatory Commission, which monitors utilities, recently reached a parallel conclusion: New coal power now costs about the same as new wind power, even without CO2 regulations. Significantly, Wolverine, which says it must build its plant to protect customers from unpredictable energy prices, has not questioned either study, yet has not released its own cost estimate.
And when the Michigan Environmental Council asked Stanly “Skip” Pruss, head of the governor’s newly renamed Department of Energy, Labor, and Economic Growth, to compare coal and renewable costs, he sided with Sanzillo and the feds.
“I would suggest to you that the wind may cost less than building a new coal plant,” Pruss said. “I think the industry expects very serious carbon (CO2) constraints taking the form of a carbon tax, cap-and-trade system or additional controls or a blend of carbon controls,” something that would also increase the cost of coal-based power production.

THE GREEN RUSH
That, green energy advocates say, could stop Michigan’s coal rush and start a new ‘green’ rush that makes the state a world manufacturing center for green-energy products while helping Michiganders cut energy costs.
Renewable proponents say that elected officials in communities across the state who are looking for new economic development would do well to follow the federal and state leads and enact local policies that make their towns irresistible to green entrepreneurs.
That idea is probably a tough sell in Rogers City, where many people still badly want a new coal and pet coke plant. But there is plenty of room for big wind turbine factories down in that big quarry, industrial power is available there, and lake freighters can probably handle even the biggest wind-turbine propeller blades.
And those freighters are looking for new places to go.

Glenn Puit is a policy specialist for the Michigan Land Use Institute. More information and news coverage about Michigan’s coal rush and the Wolverine plant are at http://www.mlui.org