A: That's a very difficult call. What we're learning as we soak in the details of this issue is how incredibly complex it is. You're starting to see Congress members who are dealing with it for the first time saying, "Oh my goodness -- every time I get one answer, it raises five questions." The complexity, by definition, will slow down the progress.
Secondly, as you listen to very partisan Democrats and certain environmentalists, there is a sense that they would rather keep this as an issue for the 2008 election and then have a solution afterward because, one, it becomes a good issue for the campaign, and, two, they think they would get a tougher bill. I think every day that goes by, the probability is increasing that it gets done after the election, not before.
Q: But you'd rather see it happen before?
A: I personally think that sooner is better. It gives us more time to start to take early action and get credit for it, to know what we'll get credit for. A lot of companies like ours are making big decisions right now: "Do we build coal plants? Do we build nuclear or natural gas or renewables? How much do we depend on energy efficiency?" These are investments that last for half a century or more.
Q: Do you think that utilities should get carbon credits based on actions they've already taken, before the regulations are implemented?
A: They should not. The legislation should encourage companies to go out and do things, make investments that would help their carbon footprint in the future. Retroactive credits would not achieve this. Actions taken in the past weren't taken recognizing there'd be future carbon legislation.
Q: Some economists think that a carbon tax would be more effective than a cap-and-trade program. Do you agree?
A: I think economists generally believe that. Here's the problem: It's not politically doable. You can't find Democrats and Republicans that want to sign on to any tax.
Q: You're a strong proponent of nuclear power. The question of what to do with spent nuclear fuel hasn't been resolved. What would you propose?
A: Our industry has long supported Yucca Mountain [a federal nuclear-waste repository in Nevada], but there seem to be huge impediments to Yucca Mountain at the moment. The way that the political deck is stacked today, I think we need to come up with an alternative approach to consider. I haven't really seen anything that makes sense yet from a political standpoint. But I do think that we can come up with ways to do it, most likely pursuing a more regional approach to storage. The French have come up with ways to deal with the storage issue, and we should look to them.
Q: Coal has been taking a beating lately. Jim Hansen, the nation's most respected climate scientist, has called for a moratorium on building coal-burning plants. Texas utility TXU has had to scale back its plans for old-style coal plants. The North Carolina Public Utilities Commission challenged your company’s plans to build two new coal-fired plants. What role do you think coal should play in a carbon-constrained future?
A: There's no getting around the fact that coal is America's most abundant and affordable power source. There are 25 states in this nation that today get more than 50 percent of their electricity from burning coal. We're not going to eliminate that capacity any time soon -- in fact, there are 150 new coal plants on the books.
As for future coal development, I am optimistic and hopeful that we will solve the challenge of carbon capture and storage. There are some 30 different technologies that are being developed and are in different stages of research and development that have the potential of attacking the issue.
But the real challenge will be coming up with a technology that can eliminate carbon emissions from existing plants -- a carbon "scrubber" of sorts. Today we can put a scrubber on the back end of our plants and take out [sulfur dioxide], mercury, nitrogen oxides. We ought to be able to do that with CO2. A lot more emphasis and resources need to be devoted to that innovation.
Q: Does Duke have any IGCC plants [integrated gasification combined-cycle plants, cleaner fossil-fuel plants that could be adapted to capture carbon for storage] in the works?
A: We are in the process of getting authorization to build an IGCC facility in Indiana, a coal-producing state that has the right geology -- the limestone-type geology -- which allows you to pump the CO2 into underground chambers.
Q: Why not make Duke's two proposed new coal plants in North Carolina IGCC?
A: North Carolina has a different geology that isn't suited for underground storage. Until we find more advanced ways of storing the carbon emissions, you can't site IGCC in regions that don't have the geological capacity. So in North Carolina we proposed building a "supercritical" plant, which is 40-percent efficient -- the most advanced existing technology available. It eliminates 99 percent of the sulfur dioxide emissions, 90 to 95 percent of nitrogen oxides, virtually all particulates, and there are no thermal impacts to the water bodies. By building this plant, and retiring two older coal units, we will actually reduce our carbon footprint. Plus, our older plants that aren't retired will run less, because they're less efficient and more costly to operate.
Interview continues on next page.
