Struggles for power plant with White House backing raise concerns about clean coal

JUDY WOODRUFF: The technology known as clean coal, along with solar and wind energy, is central to the Obama administration's plans for combating climate change.

But a new investigation by The New York Times questions the ability of this technology and a high-profile coal plant to deliver on its promise.

William Brangham has the story.

WILLIAM BRANGHAM: The New York Times investigation published this week examines problem at the Kemper power plant in Central Mississippi. The plant is still under construction, but its price tag has run billions of dollars over budget. It's the subject of two federal investigations and a lawsuit by Mississippi rate payers who say they have been defrauded.

The problems at Kemper also call into question the Obama administration's reliance on this clean coal technology to fight climate change.

New York Times investigative reporter Ian Urbina wrote the story about Kemper. And he joins me now.

So what is clean coal?

IAN URBINA, The New York Times: It's sort of the promising notion that we could still burn coal, but without so much pollution.

And behind the promise is technology that would allow you in different versions to pull carbon out of the emissions from coal plants.

WILLIAM BRANGHAM: So that it doesn't get up into the atmosphere and drive climate change?

IAN URBINA: Correct.

WILLIAM BRANGHAM: And was the — is the idea that the technology is proven, but we just don't know how to do it economically? What's the question been about it?

IAN URBINA: Yes, so the technology, as you say, is proven, and we know how to make it work. The challenge is, can we scale it up, so to move it from the model stage to big enough plants to make a difference, and can we do so affordably?

The affordably is really where it gets complicated, because that means can we do so in a fashion that's cheaper than natural gas? Can we do so quickly enough so that the prices don't change and then, by the time you get the plant online, it's no longer the same price tag? And this has been the big stumbling block, with Kemper included.

WILLIAM BRANGHAM: So, your reporting focuses on this plant in Mississippi. It's owned by Southern Energy. What is it that's gone wrong down there?

IAN URBINA: A bunch of things.

Mostly, it's way over budget and past deadline. There was a certain amount of hubris, it seems, on the front end of this project, where they promised the moon, and — in terms of how quickly they could build a plant of this size, and they quickly fell behind schedule and overbudget. And that problem got compiled by their competitor, which is natural gas.

The price for it fell through the floor and just kept falling, and so this plant became less and less attractive with time. And then what our investigation revealed was that the problems ran deeper inside the plant, ranging from mismanagement and potentially fraud, in the sense that the managers who ran the plant were covering up problems as they encountered them and continuing to promise things that they couldn't provide.

WILLIAM BRANGHAM: Some of your reporting comes via a whistle-blower named Brett Wingo. What is it that he is alleging that was the problem?

IAN URBINA: So, Brett Wingo is a mid-level manager who was hired by the company back in 2008-2009.

In the beginning, he was sort of a real loyal pitch man for the project. With time, Brett became frustrated with what he says was mismanagement and overstated promises on how quickly and how affordably the project could be accomplished.

And he attempted to work from inside the project in the plant to raise these concerns, and after a while, he decided to go public.

WILLIAM BRANGHAM: Is Kemper really emblematic of the problems of clean coal, or is this just an isolated case?

IAN URBINA: Every president going back roughly back to Reagan has had sort of a pet project that they dumped a lot of federal subsidies into, and sort of hoping that they could burn coal cleaner, and all of them have turned out to be boondoggles.

And so, this one, the jury's still out. The plant may still come online in the next couple of months, and, ultimately, they could pay down their debt and produce cheap electricity and clean electricity. But, so far it's, again, two years past deadline, $4 billion over budget, and still not online. So it's not looking good.

WILLIAM BRANGHAM: What do these problems specifically at this plant mean for the Obama administration in their attempt to fight climate change partly through this type of technology?

IAN URBINA: Well, so the administration put a lot of political Capitol into this project.

The EPA administrator, the current EPA administrator, has pointed to this project as a poster child of what we should hope for. So, politically, it's embarrassing. But, just more practically, if we're going — we being the country — are going to achieve the goals that were set out in Paris in our climate change goals, we have to figure out how to handle the fact that 25 percent of the world's electricity comes from coal plants.

So we can't pull those offline tomorrow. And we have to figure out how to make them burn cleanly. And so this was the sort of shining hope that we might have figured that out, and it doesn't seem to be panning out.

WILLIAM BRANGHAM: We reached out to Southern Company for a comment, and a spokesperson told us that your article was a — quote — "negative recap of old news," that you were set on creating a — quote — "preconceived narrative" and that Southern Company was trying to finish this in a right way, and you didn't address that.

With regards to the whistle-blower, Brett Wingo, they said that they, the company, had done two investigations into his claims, one internally, one externally, and that — quote — "His concerns were unsubstantiated and not otherwise supported by the facts."

What's your response to that?

IAN URBINA: So, there are two federal investigations under way, one of them quite serious about potential corporate fraud, by the Securities and Exchange Commission on these various issues. And that's ongoing.

There are two lawsuits, rather large lawsuits. The project and the company have had two major credit downgrades. So I think the reality is that this is not The New York Times raising these concerns. It's more The New York Times attempting to figure out what actually went wrong.

Everyone knows that things have gone wrong. Now, again, whether Southern can pull this project out of its nosedive and turn things around, that remains to be seen. But the question even then still remains, will they be able to keep the plant online? Will they be able to capture as much carbon as they promised? And who's going to pay for the $4 billion tab that's still there, taxpayers, investors, the company?

WILLIAM BRANGHAM: All right, Ian Urbina of The New York Times, thank you very much.

IAN URBINA: Thank you.

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