Sunday, March 2, 2008 9:50 PM CST
Coal industry steps up lobbying in face of Washington battles
By Deirdre Shesgreen, St. Louis Post-Dispatch
WASHINGTON — If Peabody Energy Corp., the world’s largest private coal company, feels skittish about the political landscape in Washington these days, it’s no wonder.
With Democrats in control of Congress, the industry is under fire in the raging debate over global warming. Senate Majority Leader Harry Reid recently called coal “one of the things that is ruining our world.” And the Bush administration, usually a dependable ally, pulled the plug in January on the industry’s landmark coal-research initiative.
“Coal is in the cross-hairs,” said Sen. Dick Durbin, a Democrat and supporter of Southern Illinois’ coal industry.
Peabody is not sitting idle. The company and other coal interests have dramatically ramped up their lobbying efforts on contentious environmental, safety, and regulatory battles.
In the last year, Peabody has listed a half-dozen new consulting firms on its lobbying roster, according to disclosure reports. Peabody’s lobbying expenses reached $3.24 million for 2007, up from $1.76 million in 2006.
“The intensity of the focus on environmental grounds has never been greater than it is today,” said Fred Palmer, Peabody’s top in-house lobbyist.
Among the high-priced advocates Peabody has hired are two former congressmen, Reps. Richard Gephardt, D-St. Louis County, and Max Sandlin, D-Texas. It’s also tapped two high-level former Environmental Protection Agency officials and several ex-congressional aides, including Jason Van Eaton, who recently left Sen. Christopher “Kit” Bond’s Washington office to work for Bond’s Missouri political operation.
Palmer said the disclosure filings overstate the jump in lobbying activity because of new reporting requirements.
“But I’m not denying in any way, shape or form that we don’t have a lot going on right now,” he said. “We have ramped up because the world ramped us up.”
The National Mining Association, a trade group that includes Peabody, has also significantly hiked its spending on federal lobbying, and last fall, another industry-funded group, Americans for Balanced Energy Choices, launched a $30-million advertising and lobbying campaign.
“We wanted to be positioned to take advantage of a changing political landscape,” said Kraig Naasz, the association president.
Coal foes see the increase another way.
“They are really almost panicked over the potential for coal not being the fuel of the future,” said Carolyn Johnson, former staff director for the Citizens Coal Council, a national grassroots group focused on the local impact of coal mines and power plants.
The political terrain could get even rockier for coal companies after the 2008 elections. All three presidential front-runners have signaled they would take a stronger approach to cutting greenhouse gas emissions than the Bush administration.
Right now, Peabody is at the center of two high-stakes battles: A brewing showdown over global-warming legislation, and a fight over the $1.75-billion experimental FutureGen coal plant proposed for Mattoon.
Those two issues are closely linked, coal executives argue, because any reduction in greenhouse gases must come with investments in new technology to use coal in a more environmentally friendly way.
Cutting pollution
In December, a key Senate panel approved a “cap and trade” bill that calls for a 70-percent cut in greenhouse gas emissions from coal-fired plants and other polluters by 2050. It would create a trading system allowing plants to buy and sell pollution credits to meet the new carbon caps.
Leading Democrats on the House Energy and Commerce Committee are drafting their own version of a cap-and-trade bill, likely to be more favorable to the coal industry. House Speaker Nancy Pelosi, D-Calif., said in January the legislation was a top Democratic priority.
But the fate of global-warming legislation is murky at best. The White House has signaled its opposition. And the bill faces stiff resistance from Republicans such as Bond, R-Mo., who vowed to work “as hard as I possibly can” to stop it.
“People have made global warming a religion,” said Bond, who believes the Senate bill would wreak havoc with the U.S. economy. “But we are not going to be able to get rid of coal as a key resource.”
Supporters and foes alike say this year’s global-warming debate will be pivotal even if legislation is not enacted, because any measure that advances will be a starting point for a post-election showdown.
“Clean” coal
FutureGen is one slice of a wide-ranging effort by the coal industry to win federal support for new coal technologies, including the conversion of coal to liquid fuel.
The project was conceived by the Bush administration as a public-private partnership to test the viability of a near-zero emissions coal-fired power plant. The $1.75-billion facility, slated for construction in Mattoon, was to be paid for by the Department of Energy and the FutureGen Alliance, an industry consortium that includes Peabody and other energy companies.
But in January, the Bush administration scrapped the project in favor of multiple facilities across the country — a move Peabody and others adamantly oppose.
The Illinois delegation has vowed to try to restore funding for the project but they’ve said it will be tough going in the face of White House opposition.
“It is extremely difficult politically to deal with a president that opposes your project, and so we are trying our best to keep the FutureGen Alliance alive and the effort alive until we can bring in a new president,” Durbin said.
Palmer said his strategy on FutureGen is “to swarm” the Capitol with as many people as possible and he said the project goes a long way to accounting for Peabody’s beefed up lobbying costs.
More coal, or less?
Palmer expressed confidence that Peabody would fare well on both the global-warming and clean-coal fronts because coal, the nation’s most abundant fossil fuel, is central to the American economy and energy policy. As oil and natural gas prices skyrocket and lawmakers look for ways to reduce dependence on foreign oil, coal has to be a central part of the equation, he said.
“You have to accept that we will be using more coal in the future, not less, because of the limits of alternatives,” he said.
Some of Peabody’s environmental foes say its agenda is to stymie global warming legislation while winning billions of dollars in federal subsidies for “clean coal” projects of questionable merit.
“Their job is to make the case that their continued profit and survival is more important than ... avoiding an environmental catastrophe,” said Dave Hamilton, director of global-warming and energy programs for the Sierra Club.
“When you want something done in Washington, you pull out your checkbook and hire the biggest name or the people with the highest juice level to get you what you want.”
Palmer sees it differently. “You have to have sufficient resources to effectively tell your story,” he said.
dshesgreen@post-dispatch.com, 202-298-6880
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