Utility Sector “Cash-for-Clunkers” Program?

Texas oilman T. Boone Pickens and media magnate Ted Turner have teamed up in calling for a utility sector “cash-for-clunkers” program, which they say could save money and reduce emissions right away.

In a Wall Street Journal editorial this Sunday, the duo proposed that such a program could make a difference if the “oldest, least efficient, and most polluting power plants” were retired “in exchange for modern gas-powered plants.” They called for new plants to be required to combine natural gas with the coal they burn for reduced carbon emissions.

The proposal is part of Pickens’ and Turner’s transparent push to make natural gas a key fuel in what they call a “cleaner and more secure” energy future. Citing a recent study by the Potential Gas Committee—a group with significant interests in the health of the gas industry—Pickens and Turner claimed that natural gas supply was secure, that the U.S. had more energy in natural gas reserves “than all the oil in Saudi Arabia.”

“In the electricity sector, natural gas is already cheap, available and ready to meet the nation’s power needs while improving climate security,” they said. “It emits about half the carbon dioxide per British thermal unit of energy, and far fewer of the heavy metals than does coal.”

The editorial also points to an emerging trend affecting the electric sector industry: the competition between coal and natural gas lobbies to influence rewrites of climate change legislation in the Senate. The Waxman-Markey bill, which passed in the House in June, gives away most of the 85% of allowances to coal-fired utilities, and the least to petroleum refiners.

The New York Times profiled the conflict in a recent article, calling attention to an $80 million advertising and lobbying campaign from America’s Natural Gas Alliance—a group of 27 independent companies—which “threw dirt on coal.” The newspaper said that the coal lobby—the National Mining Association—responded recently by publishing an ad in Politico that said that natural gas would raise electricity prices by 450% if it were to replace coal to generate electricity. The ad based the price difference on gas prices from last winter.

Sources: The Wall Street Journal, The New York Times