Virginia, Coal Country for Centuries, Now Embraces Carbon Regulations

The state has been moving away from coal-fired electricity for the past decade, and the effects of climate change already has its attention.

Coal provides about 20 percent of Virginia's ’s power, just a few years ago it was providing half of its electricity. The shift means it's already 80 percent of the way toward compliance with the EPA's Clean Power Plan. Credit: Dominion Resources' Virginia City Hybrid Energy Center coal plant/Dominion

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Editor’s note: This article is part a series of stories by InsideClimate News reporters exploring the future of the coal industry, Coal’s Long Goodbye: Dispatches From the War on Carbon.

Nestled on the eastern edge of Appalachian coal country, with a 267-year history of mining its reserves, Virginia seems an unlikely candidate to become one of the country’s biggest success stories in adapting to the Environmental Protection Agency’s Clean Power Plan.

But when the agency finalizes its rules this summer, Virginia will not be among the states fighting for it to be overturned. Instead, it is already well on its way to complying. The state has been moving away from coal-fired electricity for the past decade, and the effects of climate change—particularly along the Atlantic coast—already has its attention.

Opposition to following the EPA’s mandate has been “relatively muted,” said Walton Shepherd, a policy expert on energy and carbon pollution standards at the Natural Resources Defense Council. “It isn’t the chorus that you would expect, for a lot of reasons specific to Virginia,” he said. “The main one is coal’s long-term downward trajectory. From a sheer emissions standpoint, Virginia was already on this path.”

The Obama administration’s Clean Power Plan, which mandates cutting carbon dioxide emissions from power plants 30 percent by 2030 using the EPA’s authority under the Clean Air Act, has faced serious pushback from a dozen states, fossil fuel companies and Republicans in Congress.

In Virginia, coal still dictates the economy in some southwestern parts of the state; one of the nation’s largest energy companies, Dominion Resources, is headquartered in Richmond; and the nation’s largest coal export facility is on the coast in Norfolk. Until recently, coal accounted for nearly half of the electricity generated in the state; now it’s less than a quarter.

The once reliably conservative state has shifted politically in the last decade—it now has a Democratic governor in Terry McAuliffe and two Democratic senators, and it voted for Barack Obama in 2008 and 2012—but its move away from coal has also been shaped by economic forces.

With coal values plummeting and pollution regulations increasing, 11 coal-fired power plants have shuttered their doors, converted to natural gas or biomass, or announced plans to close or convert since 2008, according to the Sierra Club’s Beyond Coal campaign. Nuclear energy and natural gas now dominate the state’s power sector. Experts say Virginia is already 80 percent of the way toward its proposed target of reducing emissions 38 percent by 2030. Environmentalists argue expanding renewable energy and increasing energy efficiency should make up the remaining 20 percent. State officials said it will be more complicated than that, but possible.

“Yes, we may have to cut coal and increase renewables and energy efficiency [to comply with the Clean Power Plan], but this is something we’ve been trending toward for a while,” said Dawone Robinson, Virginia policy director for the Chesapeake Climate Action Network. “It isn’t a huge stretch for us.”

Attempts by Republican lawmakers and industry groups to block the emissions cuts largely went nowhere during the last legislative session. Most opponents’ major argument is that the 38 percent reduction is too stringent when compared to other states’ goals.

Experts said one reason Virginians are not as vocally opposed to regulations like the Clean Power Plan as their neighbors in West Virginia and Kentucky is that the state is already feeling the impacts of climate change. Virginia Beach has experienced approximately 30 inches of sea level rise since 1880, according to the state’s Department of Environmental Quality—nearly four times the global average and the second highest in the United States, behind Louisiana. Coastal neighborhoods frequently flood with high tide, and several large U.S. military bases in the region are at risk of crippling flooding in just a few decades. Fewer than 25 percent of residents in the coastline region of Hampton Roads have flood insurance because of skyrocketing costs and scarce coverage options.

Rising seas are “incredibly effective” at changing people’s minds, said Robinson.

‘Gorilla in the Room’

For all the support compliance has received from government officials, environmentalists and Virginians, however, say cooperation from the state’s energy sector—particularly Dominion Resources—is essential for the emissions reduction strategy to succeed.

Dominion Resources submitted 63 pages of comments about the Clean Power Plan to the EPA in November. The company argued that natural gas, wind and solar are not yet reliable enough to replace coal. It also said the agency is exceeding its jurisdiction by implementing carbon cuts under the Clean Air Act. Its main argument, however, was that the EPA set a “greater and unreasonable” emissions reduction target for Virginia than for other states that have done less to transition from coal—a point made by McAuliffe, state officials and several legislators as well.

“EPA essentially penalizes early action and rewards inaction,” Dominion wrote.

Aside from the written comments, Dominion has been quiet about the Clean Power Plan—at least publicly. Dan Genest, a spokesman for Dominion, said the company “intends to comply with the final rule.”

The Virginia League of Conservation Voters’ executive director, Michael Town, said Dominion Resources “definitely isn’t supportive, but hasn’t really led any opposition.” Dominion could be waiting until the rules are finalized this summer, he said. Once that happens, all eyes will be on the politically and financially powerful energy company to see how it reacts. “They are always the gorilla in the room,” Town said.

While Dominion hasn’t vocally opposed the rule publicly, the carbon cuts did face opposition this past winter from several state legislators who have received substantial campaign donations from the company, or represent coal country. A legislative subcommittee convened and recommended moves to block or delay the plan, none of which were enacted.

“At the end of the day it is hard to justify tinkering with something that is not going to be that big of a hurdle for Virginia to clear,” said Shepherd.

Most anti-Clean Power Plan bills fell to the wayside after Dominion agreed to freeze customers’ base rates until 2020 in exchange for being exempt from financial review by the state’s utility regulatory agency, the State Corporation Commission. Dominion spokesman Genest said the rate freeze would keep customers from having to foot the bill when coal-fired power plants need to be retired under the Clean Power Plan. The bill also means Dominion won’t have to issue refunds to customers if it earns more than utility regulators think it should. Lawmakers passed the bill in February and it was signed into law by McAuliffe the next week.

Coal’s Shrinking Footprint

Virginia’s first coal mine opened in Richmond in 1748, and the industry dominated the economy in parts of the state’s southwest corner well into the 20th century. As Virginia’s coal reserves became depleted, producers had to dig deeper and energy companies moved to more easily accessible coal seams in Kentucky and West Virginia before eventually moving out west to the Powder River Basin in Montana and Wyoming. Virginia’s coal economy crashed. The fossil fuel still dominates the economy in a few southwest counties—two of the top three largest employers in Dickenson County are coal companies—but they are the exception, and even those communities have suffered drastic job losses in the last two decades.

The state produced 46.6 million short tons of coal in 1990. By 2012, that number had fallen nearly 60 percent, to 19 million short tons. The number of licensed mines fell from more than 800 in 1980 to 118 in 2007. As Virginia’s coal production fell, it began importing more and more coal to feed its power plants.

In response, the state invested heavily in natural gas and ramped up its nuclear energy production.

In 2005, more than 46 percent of the state’s electricity came from burning coal, 35 percent from nuclear, and 10 percent from natural gas. In 2012, nuclear energy accounted for 41 percent of the state’s electricity supply. Natural gas supplied 35 percent, a 250 percent increase in seven years. Coal now provides just 20 percent of the state’s electricity.

Virginia’s main tie to the coal industry today isn’t through its western mines, but rather its coastal export facility in Norfolk, which processes approximately 40 percent of the United States’ international coal shipments. The Clean Power Plan won’t affect the export center.

Green leaders said the state is still far behind in terms of renewable energy. In 2012, just 5 percent of the state’s electricity needs were met by hydroelectric, biomass and oil combined. Wind and solar make up such a small fraction of the state’s energy portfolio that they don’t even account for a full percentage point. In 2012, the state had just 10.5 megawatts of solar power installed, according to the American Council on Renewable Energy. By comparison, California has 9,977 megawatts of installed solar .

“Until very recently, it was laughable or embarrassing where Virginia stood on clean energy,” said Town.

Virginia has set a target for getting 15 percent of its energy from renewables by 2025, but unlike in many other states, the goal isn’t legally binding.

The Virginia Department of Environmental Quality is already preparing for the rules’ final release by this summer. Officials have been meeting with stakeholders, including utility companies and green leaders, as well as with climate and energy experts at the Nicholas Institute for Environmental Policy Solutions at Duke University and the Georgetown Climate Center at Georgetown University.

Environmentalists and clean energy experts contend that Virginia is ripe for renewable energy. The state’s mountainous west—its coal country for decades—holds vast potential for wind energy. Its coastal region holds even more. A 2010 report by the Institute for Local Self Reliance estimated offshore wind could supply 142 percent of Virginia’s electricity needs. The report also found rooftop solar panels could generate 24 percent of the state’s power, and onshore wind 15 percent.

Dominion Resources has pledged to build 500 megawatts of solar power in Virginia by 2020. It also plans a 1,600-megawatt, $1 billion natural gas-fired power plant on the Greensville-Brunswick county line that could power 400,000 homes.

Its offshore wind project is also on hold after it found a 12-megawatt facility 24 miles offshore would cost $400 million, nearly double the original estimate. Dominion has a $47 million grant from the Department of Energy for the project.

“Virginia isn’t even on the map where clean energy goes,” said Shepherd, of the NRDC. “But if the state makes the right moves, it could possibly come out of this a national leader.”