Another big blow to the coal industry this week: the federal government announced that they're indefinitely suspending a loan program for new coal-fired power plants in rural areas. That's right, even the Bush administration has realized that coal power is not a sound investment. While they've issued $1.3 billion in federal loans for new plants since 2001, they won't be issuing any loans this year, and likely won't next year either, according to James Newby, assistant administrator of the Rural Utilities Service. The threat of climate legislation and the rising construction costs have made the loans too risky.
There are at least four new plants awaiting loans in Kentucky, Illinois, Arkansas, and Missouri that will now need to find other sources of funding or call it quits. A coal plant in Montana was denied funding last month, and two other projects in Wyoming and Missouri recently withdrew their requests. The country's leading financial institutions already said they're not going to fund new coal plant unless there are features in place to reduce emissions, and the federal government also yanked funding from their expensive, fantastical FutureGen plant.
This means that the coal industry has very few places to turn now for funds to get new plants up and running, which is of course a positive sign that almost everyone realizes that a cap on emissions and price on carbon is inevitable. But it's also a good sign for getting funding flowing to other sources of power. These would-be new coal plants are in the works because of rising demands for energy, and if they're not built, we still need that energy. This ups the pressure to fund renewable energy research and development, which we desperately need.
--Kate Sheppard
