nuclear-news

The News That Matters about the Nuclear Industry

New allegations of fraud concerning “clean coal”

Environmentalists have long objected to calling a coal-fired carbon capture and sequestration project “clean coal,” arguing that the label is misleading because it focuses on carbon dioxide pollution while ignoring other problems like acid rain and airborne contaminants. And carbon capture projects rely on continuing fossil fuel production, because the CO2 that’s captured is sold to oil companies who pump it into aging wells to coax more oil from the ground.

Politicians nevertheless continue to use the term. “My administration is putting an end to the war on coal,” President Donald Trump said this spring. “We’re going to have clean coal, really clean coal.”

New Fraud Allegations Emerge at Troubled ‘Clean Coal’ Project As Southern Co. Records Multi-Billion Loss, Desmog  By Sharon Kelly • Tuesday, August 8, 2017 Southern Co. is accused of fraudulently misrepresenting the prospects for its troubled “clean coal” project in Kemper County, Mississippi in several legal filings this summer.

Southern announced in late July that it was shuttering the troubled “clean coal” part of Kemper after construction ran years behind schedule and the company spent $7.5 billion on the 582 megawatt power plant — over $5 billion more than it first projected.In a lawsuit filed today, Brett Wingo, a former Southern Company engineer, alleges he warned the company’s top executives that it would not be possible to meet key construction deadlines. Management responded by retaliating against him, the complaint asserts, and Southern continued to assure investors and the public that Kemper’s schedule and budget targets would be met, then blamed unpredictable factors like the weather when those goals were missed.

Wingo’s claim that Southern misled investors by concealing construction-related problems drew national attention in a front page New York Times investigation last year. In January, the U.S. Occupational Safety and Health Administration (OSHA) concluded that Wingo had suffered a “continuing pattern of retaliatory treatment” and ordered Southern to reinstate Wingo, but the company has refused, according to a statement accompanying the lawsuit. (The case is “Brett Wingo v. The Southern Company, et al.,” Case No. 2:17-cv-01328-MHH in the U.S. District Court for the Northern District of Alabama, Southern Division.)

A second less-noticed legal filing with Mississippi state regulators accuses Southern of misrepresenting Kemper’s prospects right from the outset, before construction even began. Those claims center on Southern’s projections for what it would cost to operate and maintain the plant once it was up and running, which the filing asserts were so low they were “indefensible”.

In an email to DeSmog, Wingo seconds those claims, saying that he believes management knew back in 2012 that its “operation and maintenance” (O&M) projections were off — but kept the accurate numbers under wraps for years.

“By hiding the true O& M costs for so long, apparently since 2012 and likely longer, Fanning basically ensured shareholders would be forced to absorb $6 billion in losses,” Wingo told DeSmog.

“In 2012, sunk costs on Kemper were only around $1 billion and the natural gas part of the plant substantially complete. It would have been a perfect time to stop a runaway train from running off the end of the tracks,” he added. “But history shows, that’s not what Fanning and Southern Company chose to do.”…….

 

Spending Money to Make Money

Why would a company want to build a power plant that’s too expensive to run? Part of the answer, critics say, is the way that utilities like power companies are regulated.

Because they are essentially regulated monopolies, the laws governing how utilities like power companies make money are different than most industries, as explained in a  2015 Wall Street Journal article titled “Utilities’ Profit Recipe: Spend More.”

“[U]tilities have another incentive for heavy spending; It actually boosts their bottom lines — the result of a regulatory system that turns corporate accounting on its head,” The Journal reported, explaining that as long as state-level regulators sign off on a project, regulated utilities get a fixed percentage of what they spend as a profit……..

Clean Coal?

Kemper was supposed to be an engineering feat, able to turn the world’s least efficient but most abundant form of coal, lignite coal, into a climate-friendly fuel. That’s “climate friendly” as compared to the kind of coal-burning power plants upon which the U.S. has historically relied for the bulk of its electricity……..

Environmentalists have long objected to calling a coal-fired carbon capture and sequestration project “clean coal,” arguing that the label is misleading because it focuses on carbon dioxide pollution while ignoring other problems like acid rain and airborne contaminants. And carbon capture projects rely on continuing fossil fuel production, because the CO2 that’s captured is sold to oil companies who pump it into aging wells to coax more oil from the ground.

Politicians nevertheless continue to use the term. “My administration is putting an end to the war on coal,” President Donald Trump said this spring. “We’re going to have clean coal, really clean coal.”

Asked about the prospects for new “clean coal” projects in general after Kemper’s shuttering, a top Department of Energy official was dubious. EIA chief Howard Gruenspecht noted the role of natural gas prices, as well as the lower price of oil, which hurts the price of carbon sold to enhance oil recovery.

“In some parts of the world, one could imagine perhaps some efforts there but the cost situation is very, very challenging, certainly in the United States,” Gruenspecht told DeSmog. “One does not have to have an issue with the technology itself, it’s very impressive, but it’s a question of whether things really pencil out or not — there are some significant challenges.” https://www.desmogblog.com/2017/08/08/southern-company-fraud-allegations-kemper-clean-coal-project?utm_source=dsb%20newsletter

 

Advertisements

August 19, 2017 - Posted by | climate change, secrets,lies and civil liberties, USA

No comments yet.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

%d bloggers like this: