Reasons differ, but Wyoming and China agree on cutting CO2 from coal

Casper, Wyo. • Four Wyoming lawmakers came away from a recent trip to China with a deeper perspective on China's CO2 emissions policy, and what it means to Wyoming's coal industry.

For some of the lawmakers, it's a perspective that runs counter to the assumption behind a long-standing political dogma among Wyoming leaders.

The dogma is simple: China isn't cutting CO2 emissions, so why should we?: "There is a sense here (in Wyoming) that they (China) just don't care, and they're going to develop and make no efforts to deal with the environment.

"I think that is not the case. We need a more balanced view of what they are doing," said Rep. Tim Stubson (R-Casper), after a June tour of coal-economy regions in China.

The Wyoming legislators on the tour concluded that China does care. That doesn't necessarily mean they think the U.S. should be regulating CO2. It does mean, however, that they have a clearer picture of China's interest in developing technology to help both countries continue to use coal minus the CO2 emissions.

For some 20 years, coal-fired power plants have proliferated in China at an astounding pace — at one point, a rate of one new 100-megawatt unit opening per week. One industry insider told WyoFile that the rate has now slowed to about one new coal-fired power unit every two weeks, but the newer units are bigger: an average of 500 megawatts.

At the same time, China is decommissioning a lot of coal boilers that were built in the 1990s and replacing them with more efficient, lower-polluting (including CO2 emissions on a per-megawatt basis) units — many of them supercritical and ultra-supercritical designs.

Still on the developing-nation fast track, China is on a path to emit more and more CO2 every year — and coal is the main culprit. Experts say that within the next seven years China is on track to add what amounts to the entire U.S. fleet in new coal-fired power, revealing the immensity of the global challenge in addressing man-caused CO2 emissions that contribute to climate change.

But some say there's an important distinction to understand about China's path to more carbon emissions: The nation is determined to lower its CO2 output in relation to its Gross Domestic Product. That is worth the attention of Wyoming and U.S. leaders, they say.

David Wendt, president of the Jackson Hole Center for Global Affairs that organized the recent Wyoming delegation tour of China, says that absolute CO2 emissions reduction in China is not attainable at the moment. And, he notes, absolute reduction in China probably won't happen in the next 20 years or so. That is because China is working feverishly to address serious poverty, using coal and other carbon-based resources to drive large populations toward a new middle class.

So, he argues, it is up to the rest of the developed world to make up the difference in CO2 reductions. "Everybody's got to do their best," says Wendt. He said China is working hard to do its part, while developed nations can and should cut their overall CO2 emissions.

The Wyoming delegation, however, remains unconvinced that the U.S. should enact policies aimed at coal-fired power to help bring about a net CO2 emission reduction in this nation while China continues to increase its overall emissions. Most Wyoming lawmakers don't share their Chinese colleagues' concerns about climate change.

"I'm not in favor of EPA regulating CO2, in any event," Stubson told WyoFile.

All four of the legislators on the tour now say they are beginning to buy at least the first part of the argument – that China is working hard to cut its CO2 intensity as it grows its GDP. They understand the overlapping interests of Wyoming and China to advance carbon-cutting technologies, specifically for coal, albeit for different reasons.

First impressions

The observations one makes when arriving to the country immediately present a picture of contrasts — new and old, clean and dirty.

When the plane arrived in Beijing the skies were mostly clear and an alluring deep blue after a torrential rain. It was a stark contrast to a band of dirty yellow smog that hung low on the city skyline. Still in the air preparing to land, out the window it was clear that what was once a sleepy agricultural lowland on the north end of the city has been converted to a sprawl of new construction made up of neat Lego-like high rises everywhere, of all modern variety. It's all arranged too neatly to represent an organic pace of development.

After a long layover in Beijing, the Wyoming delegation flew to the coal-rich inner region of China: first to Shanxi Province, then Ningxia and Shaanxi. The cities visited in these provinces are filled with throngs of people everywhere, busily going about their day. In the late afternoons and well into the night they fill beautifully lush and manicured parks to play cards and hacky-sack, participate in group dancing, group tai chi, and just about any activity one might expect to see in a city park.

In each city, this normalcy is flanked by the "old town" areas and the modern "new town" gleaming under the flock of China's unofficial national bird: the construction crane. The tsunami of new construction is divided between modest cookie-cutter apartments and over-the-top lavish commercial and government complexes of modern design intended to leave an impression. There is extravagance and there is abject poverty. There are serene landscapes and jammed streets. And the air. Many citizens — mostly women and children — wear masks to filter airborne pollutants, while most do not.

What they're saying

In the city of Taiyuan, in Shanxi, the Wyoming lawmakers met with their first Chinese delegation — the first of many who spoke openly of China's pollution and of the pressures on government entities to curb industrial development's impacts to the environment and human health. They spoke openly about a growing concern in their society to curb CO2 emissions for the sake of slowing climate change — all the while everyone is under tremendous pressure to lift large portions of the population out of poverty.

In Taiyuan, Wu Dongsheng, director of Shanxi Provincial Development and Reform Commission's Climate Change Division, said that China attaches significant importance to climate change. He said he hopes the U.S. and China can exchange ideas on policies to make sure carbon emission-reducing technologies can be improved and implemented in a sensible amount of time "to successfully address the problem of climate change."

Shanxi is an interior province rich in coal and one of the earliest places of Chinese civilization. It is home to 35 million people, and its annual coal production is 900 million tons. Mr. Wu became intensely interested in U.S. carbon capture and storage initiatives while visiting Wyoming in 2006, at the invitation of the Jackson Hole Center for Global Affairs. He returned to his homeland invigorated.

In 2008 the Shanxi state government established the Office of Climate Change — a steering committee to address climate change. On a list of conference participants, Mr. Wu is also referred to as "Chief of Coping with Climate Changes Division." He noted that China recognizes an official Low Carbon Day in June. He said he and his colleagues welcomed the U.S. Environmental Protection Agency's June 2 announcement of the first-ever carbon emissions limit on coal-fired power plants, and said it will help drive coal technology innovation in the U.S. and in China.

The Obama Administration's Clean Power Plan announced in June would cut carbon emissions from U.S. power plants by 30 percent below 2005 levels by 2030. While EPA said it would bring public health and climate change benefits, critics like Wyoming's Republican Sen. John Barrasso claim that it fails to strike the necessary balance between cleaner energy and economic growth – instead choosing to speed up the decommissioning of existing coal-fired power plants and increasing energy costs.

Other critics suggested that President Obama's plan would generate little or no buy-in from other nations to do their part in lowering their own carbon emissions.

By the time Wyoming's legislative delegation arrived in Shanxi Province later in June, however, the Chinese government announced plans to encourage CO2 reductions by shifting China's multiple carbon trading pilot programs into a single nationwide carbon trading policy before the end of 2014.

Zhang Xiao Ping, vice director of Shanxi Provincial Development and Reform Commission, noted that Shanxi is China's largest single coal supplier, just as Wyoming is to the U.S. Shanxi also leads in power generation, coal-to-chemical conversion and metallurgical coal. He said that while the province is focused on deriving more coal-based products and building new markets for those products, Shanxi also values the importance of diversifying its energy and economics "beyond coal."

To encourage green energy, Mr. Zhang said Shanxi established a green energy business innovation incubator, with preferential treatment for businesses to participate. He said the government is aiming for a healthy Shanxi and a clean Shanxi by strengthening air pollution technology policy.

Li Dongfu, of Shanxi Provincial Peoples' Congress, said through an interpreter that Shanxi's heavy use of coal "has caused a lot of pollution and a lot of environmental problems. … CO2 emissions have caused me a lot of pressure."

The Wyoming delegation heard the same urgency to address pollution and climate change — and to do it by partnering with Wyoming and others on technology — in every Chinese province and city they visited.

At Northwest University in Xi'an, in Shaanxi, another coal-producing region further west, Dong Wang, deputy director of Shaanxi Provincial Energy Bureau, said, "… for many provinces in China we are trying our best to reduce the use of coal." He noted that 13 percent of Shaanxi's energy portfolio is renewables. "Coal gives us a lot of pressure in our ecological environment."

And yet because coal remains available in abundance throughout much of China, it also remains ingrained into the economy and culture, and will for decades.

"Why do we use coal? Because we have no choice," said Zhou Lifa, director of the Shaanxi Provincial Institute for Energy Resources and Chemical Engineering.

What they're doing

China has a goal of a 17 percent reduction in carbon intensity per GDP, and a goal of increasing energy efficiency 16 percent. In 2010, provinces were given specific carbon intensity reduction goals to meet by 2015. Shanxi is approaching its goal of a 17 percent reduction, now on track to achieve about a 13 percent reduction. Shaanxi is on track to meet its 17 percent reduction goal. Some provinces will likely surpass their own 5-year goals, while others are making less headway.

They're doing it by not only replacing old coal-burning units with new ones, but by decommissioning old, inefficient steel and cement-making plants, as well as other industrial facilities. Many cities have converted public transportation to compressed natural gas, and by using more natural gas to "thousands of villages" to replace coal-fired heating and cooking stoves.

"All of this is not stuff they're just saying they're going to do, they've actually done it," said Wendt.

The state government in Shanxi Province is keen on addressing climate change at the state level. In 2009 Shanxi committed to reduce total carbon emissions 40-45 percent below 2005 levels by the year 2020.

Grace Zhang, director assistant and assistant researcher at the Ningxia Clean Development Mechanism Service Centre, is a carbon trading expert who is focused pilot carbon trading programs. She said China's move to create a nationwide carbon trading mechanism is part of that nation's effort to meet goals first set forth in the Kyoto Protocol. Qualifying as a developing nation under the Kyoto Protocol's Clean Development Mechanism, China can implement carbon reduction programs to earn certified emission reduction (CER) credits which it can sell to help it meet carbon emission reduction goals under Kyoto. The program is intended to help developing nations fund carbon reducing efforts.

Zhang told the Wyoming delegation when they visited Ningxia Province, "We are now preparing for uniform carbon trading for all of China, to be complete before the end of this year. The upper limit for CO2 emissions will be announced next year in the 13th Five Year Plan."

While experts outside China acknowledge many of the efforts and successes to cut carbon intensity, there's still plenty to criticize, they say. For example, while China excels at carbon capture technology, it isn't sequestering CO2 or utilizing it enough to make a dent in its CO2 emissions.

Kelly Sims Gallagher, associate professor of energy and environmental policy at Tufts University, said at a February 2014 Brookings Institute panel discussion the Chinese government is sitting on dozens of permits for facilities that employ carbon capture technology. She said the government seems tempted to hold out until it can deploy carbon utilization technology rather than moving forward now with sequestering CO2.

"This creates a dilemma I worry about a lot, which is that if you don't have the technical or economic confidence in the ability to capture and store the CO2, then as a government you will be reluctant to impose serious climate policies on your country," said Gallagher.

China recently announced it will restrict nationwide demand and consumption of coal to 3.9 billion metric tons per year — a limit the country is already pushing up against. Sims Gallagher said such policy declarations are bold, but they don't seem to align to form a clear path forward to significantly curbing CO2 emissions.

"I think there is incoherence now and, you know, that these coal caps, I think, are just sort of a panicked response, that's why I'm interpreting them to political pressure about air pollution," Gallagher said.

Wyoming views on CO2 emissions

Wendt concluded, "They have a very different set of challenges than we do: a population four times as large as ours, a population that can be very easily dissatisfied. So China needs to see continued economic growth. They have a very different set of challenges than we have." Those challenges include, he noted, a very different economy.

As for David Wendt's message — developing nations must cut their net CO2 emissions as a direct response to China's inevitable increases — Wyoming Speaker of the House Tom Lubnau said, "I don't know if it makes any difference. … If we give competitors an advantage over us with externalities we don't have, we place ourselves at a competitive disadvantage."

Lubnau added, "If everybody does that (reduce CO2 emissions) at the same level, then that's fine. But everybody has to play on a level playing field."

Wendt says that while China is on an unstoppable path to build its new middle class still relying heavily on coal, the U.S. and the rest of the world ought to work hand-in-hand with the country to build it with the least carbon-intensive technologies possible. And that's where China's and Wyoming's interests come together, as both Wendt and the touring legislators agreed.

Opportunities for Wyoming and China

Wyoming's congressional delegates currently work hard to press a pro-coal, no-CO2-regulation policy in D.C. while more and more state leaders back home are determined to work with Chinese partners on the technology and lower-level policy strategies. Here that policy includes investing millions in Wyoming taxpayer dollars to leverage money from industry and the feds for research. It also includes continuing and expanding student exchanges and cooperative engineering projects between UW and China. Wyoming leaders say they embrace the opportunity to cooperate with their Chinese counterparts on advancing technologies to reduce carbon emissions — particularly from coal.

While China excels at capturing carbon, and hopes to put that carbon to some commercial use, it isn't utilizing that carbon or gaining much traction to store or sequester it, so far. That's where Wyoming's and China's interests coincide. The University of Wyoming is on the world's leading edge in geological characterization to identify both energy resources and carbon sequestration opportunities. While the U.S. can help China utilize and store small amounts of CO2 via enhanced oil recovery, China can help Wyoming advance its efforts to capture CO2 from coal facilities.

Both sides see this as an economically-viable bridge to utility scale coal-based carbon capture and utilization/storage deployment, perhaps realized in 15 to 20 years.

In recent years, Chinese partners have become increasingly interested in the work of the Carbon Management Institute and Enhanced Oil Recovery Institute at the University of Wyoming. Chinese officials told the Wyoming delegation they are impressed at the work that has been done in partnership between the university and private companies to apply CO2 in enhanced oil recovery, unlocking vast amounts of oil that was previously uncommercial.

At Northwest University in Xi'an, in Shaanxi Province, Lifa Zhou, the director of the Shaanxi Provincial Institute for Energy Resources and Chemical Engineering, proudly showed off a series of maps depicting geologic characterization of oil and natural gas resources in Shaanxi, for potential enhanced recovery via CO2 injection. The work was done in cooperation with the University of Wyoming. This cooperation in engineering, said Mr. Lifa, is the first step to making good use of CO2 that would otherwise be emitted into the atmosphere.

The stated goal between Wyoming officials and their coal-rich Chinese counterparts during this tour in June boiled down simply to preserving the use of coal through processes that reduce its carbon intensity. To get there, Wyoming leaders would like to model China's new coal-to-chemical complexes as a potentially new lucrative industry to stabilize the state's mining industry.

"The fact that China has to continue to live off coal for the foreseeable future does give us an opportunity to learn how to use coal in what's going to be a carbon-constrained future," said Rep. Tim Stubson.

— Dustin Bleizeffer is WyoFile editor-in-chief. He has covered energy and natural resource issues in Wyoming for 15 years. You can reach him at (307) 267-3327 or email dustin@wyofile.com. Follow Dustin on Twitter at @DBleizeffer. —

Wyoming legislative delegation:

Tom Lubnau, outgoing Wyoming Speaker of the House (R-Gillette)

Tim Stubson, House Majority Whip (R-Casper)

Mary Throne, House Minority Leader, (D-Cheyenne)

John L. Freeman, House of Representaties, (D-Green River)

Also joining the delegation;

Zunsheng "John" Jiao, chief geologist, Carbon Management Institute, University of Wyoming

David Wendt, president, Jackson Hole Center for Global Affairs

Olivia Meigs, director of communications, Jackson Hole Center for Global Affairs

Mark Newcomb, board of directors, Jackson Hole Center for Global Affairs

Dustin Bleizeffer, WyoFile editor-in-chief