China, US seek 'clean coal' agreement as industry struggles

U.S. and China officials took a major step Tuesday toward an agreement to advance "clean coal" technologies that purport to reduce the fuel's contribution to climate change—and could offer a potential lifeline for an industry that's seen its fortunes fade.

The agreement between the U.S. Department of Energy and China's National Energy Administration would allow the two nations to share their results as they refine technologies to capture the greenhouse gases produced from burning coal, said Christopher Smith, the Energy Department's assistant secretary for fossil energy.

Terms of the deal were finalized late Tuesday. Officials said it would be signed at a later date.

Smith spoke after he and other senior officials from President Barack Obama's administration met with representatives of China's National Energy Administration during an industry forum in Billings. The discussions took place near one of the largest coal reserves in the world—the Powder River Basin of Montana and Wyoming, where massive strip mines produce roughly 40 percent of the coal burned in the U.S.

But clean-coal technologies are expensive, and efforts to develop them for commercial use have struggled to gain traction in the U.S. Some critics describe clean coal as an impossibility and say money being spent on it should instead go toward renewable energy.

China leads the world in coal use. It produces and consumes about 4 billion tons annually, four times as much as in the U.S.

Shi Yubo, vice administrator of China's energy agency, told delegates to the forum that coal will continue to play a role in China's developing economy. "But we need to pay special attention to developing clean coal technology," he added through an interpreter.

Shi said China was seeking to develop more demonstration projects that capture carbon to prevent it from escaping into the atmosphere. He acknowledged that efforts to put the greenhouse gas to beneficial use "are still far behind."

Meanwhile, the U.S. coal industry has suffered a beating in recent months, with major mining companies going bankrupt.

The Interior Department is proposing hikes on coal royalties and possibly lease payments for publicly owned reserves of the fuel in areas such as the Powder River Basin. Also, cheap natural gas is squeezing out demand for coal, and Obama has made reductions in carbon dioxide emissions from coal-fired power plants a key component of his climate policy.

"You've got to develop wind and solar and develop nuclear, but you also have to deal with the challenge of reducing the greenhouse gas impacts of coal-fired power plants," Smith told The Associated Press. "It's positive if those projects (to capture carbon) get built here. It's positive if those get built in China and India and Europe and around the world."

Almost one-third of energy-related carbon dioxide emissions in the U.S. come from burning coal, equivalent to 1.6 billion tons of the gas in 2014. By comparison, two clean coal projects that Smith described as closest to completion—the Petro Nova project in Texas and the Kemper project in Mississippi—would capture less than 5 million tons of carbon dioxide annually. He said the interactions between his agency and its Chinese counterpart created opportunities for companies from both countries to come together on ways to meet ambitious plans to cut emissions.

Montana Gov. Steve Bullock opened Tuesday's forum by telling delegates from the two countries that "climate change is real." The Democrat pointed to the smoky skies outside the meeting hall—caused by record-setting forest fires to the west—as an indication of how its effects are manifest.

Bullock later was joined by Wyoming Gov. Matt Mead, a Republican, who said that regardless of his personal belief on whether climate change is real, economies around the world already are reacting to it. He rejected the notion that clean coal is a pipe dream.

"In the climate change debate, we have gotten sort of stuck in the mud, calling each other names. We need to move beyond that," he said.

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