AEP warns of looming power shortage

First, this from Reuters:

HOUSTON, Feb 15 (Reuters) - The United States faces an electricity crisis if it eschews coal-fired power plants on its way to a low-carbon economy, said the chief executive of American Electric Power, one of the nation's biggest utilities.

Michael Morris of AEP said that he fears the United States will rely on natural gas plants too heavily if it drastically cuts burning coal to make electricity.

"We will find ourselves in a classic electric shortage and we will probably pursue the line that this country usually follows when it faces a shortage and come up with some terribly ill-conceived answers," if construction of coal-fired power plants continues to be curtailed, Morris said.

Compare that with this news release that AEP issued two days ago:

COLUMBUS, Ohio, Feb. 13, 2008 – American Electric Power (NYSE: AEP) will engage university students in a dialogue about energy availability and security and related issues over the next two months. Michael G. Morris, AEP chairman, president and chief executive officer, plans to visit six campuses between Feb. 18 and April 30 as part of “The Future of Energy” University Listening Tour.

Morris will speak with students at Virginia Tech in Blacksburg Feb. 18; University of Arkansas at Fayetteville March 10; The Ohio State University in Columbus April 2; Howard University in Washington, D.C., April 7; Purdue University in West Lafayette, Ind., April 9; and University of Tulsa in Tulsa, Okla., April 30. Each visit will feature an extensive question-and-answer session following a brief presentation.

“The tour’s purpose is to engage young people on college campuses across America in a discussion about what it will take to ensure our nation’s energy security and address the deepening challenge of meeting growing demand for electricity while protecting the environment,” Morris said.

It sounds like the guy has a message he wants to get out.

I'm not going to side with Morris except to say that if America wants more electricity, it needs more plants to generate that electricity. But to some people, nothing is good enough.

Coal is too dirty, gas is too expensive, wind power kills too many bats, hydropower floods too many acres of wildlife habitat, geothermal and solar are too inefficent for most locations and nuclear is not to be discussed.

Further reading: "Utilities Turn From Coal to Gas, Raising Risk of Price Increase" New York Times, Feb. 5

From the Wall Street Journal of Feb. 4: Three of Wall Street's biggest investment banks are set to announce today that they are imposing new environmental standards that will make it harder for companies to get financing to build coal-fired power plants in the U.S.

(I think I'vve heard something like that before, but I can't remember when or where).

The breakout box in the WSJ article sounds familiar, too. It highlights a problem AEP has had in developing its lower-emission coal plants in Meigs County, Ohio, and Mason County, W.Va. It wants to reduce emissions into the air and store some carbon dioxide underground, but that would be mighty expensive, and it would need rate increases to recover the project costs. We know how well that will go over. People squawked over the relatively minor expense of possibly having to change their area codes. Wait until they find out how much "clean coal" really costs.

The demand for power keeps going up, and we can't seem to agree on how to provide it.

There is one solution, but it's not one that people will likely agree to. That's to reduce our consumption of electricity. But I can't see that without economic pain or coercion.