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How a Grassroots Rebellion Won the Nation's Biggest Climate Victory

Activists have imposed a de facto moratorium on new coal—and beat the Obama EPA to the punch.

| Mon Apr. 2, 2012 5:00 AM EDT

Five minutes south of downtown Detroit, Interstate 75 crests a rise. Below, unfurling for miles on both sides of the highway, is a vast industrial landscape: chemical, steel, and cement factories, a tar sands refinery, a wastewater treatment facility. Webs of piping and wire glint in the sun; smokestacks wheeze skyward; trucks and railcars shuffle back and forth. There are so many factories, packed so densely together, that it's hard to see the River Rouge coal plant, which sits on the bank of the Detroit River facing the Canadian shoreline.

An acrid odor invades the car. "Actually, the smell isn't so bad today," Rhonda Anderson says dryly. Anderson, who grew up in the neighborhood, is the Sierra Club's environmental justice organizer in Detroit. At 61, she's nearly the same age as the plant, which at the time of its construction in 1956 was the largest in the world. "My father used to bring me here to play when I was a little girl," she says as we pull into a parking lot at Belanger Park, adjacent to the plant. "It was the only open space we had."

The park consists of a lawn, a handful of trees, a fishing pier, and a play structure. Towering over it, barely a football field's length away, are River Rouge's three smokestacks, flanked by a mountain of coal 80 feet high. Between the park and the plant is a narrow creek whose bank, incongruously, bears a sign announcing it as a wildlife preserve. It turns out that in 2007 DTE Energy, the plant's owner, ripped out a sliver of concrete separating the creek from the loading area and replaced it with native plants. In return, the Michigan Department of Environmental Quality gave DTE a community service award for making the neighborhood a "cleaner and more attractive place to live and work."

Each year the River Rouge plant releases enough mercury, soot, sulfur dioxide, nitrogen oxides, and other toxic chemicals to cause at least 44 deaths, 72 heart attacks, and 700 asthma attacks.

Never mind that each year the River Rouge plant releases enough mercury, soot, sulfur dioxide, nitrogen oxides, and other toxic chemicals to cause at least 44 deaths, 72 heart attacks, and 700 asthma attacks, according to studies conducted for the advocacy group Clean Air Task Force. The plant also emits 3.7 million metric tons of carbon dioxide annually. The NAACP has called River Rouge the ninth-worst plant in the nation when it comes to health effects on communities of color.

Vincent Martin, whose family fled Cuba and settled in River Rouge, graduated from Southwestern High School in 1980. Of his 150-plus classmates, he says, around one-third have died, "mostly from respiratory illnesses and cancers." Many of the kids in his neighborhood carry inhalers, he says, and his father, brother, and sister all have asthma.

Of course, it's difficult to prove that the River Rouge coal plant caused those illnesses, just as it's difficult to prove that any specific smoker's lung cancer was caused by cigarettes. And such connections are even harder to draw in a neighborhood crammed with so many polluters that it qualifies as Michigan's dirtiest zip code.

River Rouge might seem a natural target for the Sierra Club—but so far the club has avoided calling for its closure. It comes down to economics, says Anne Woiwode, the director of the club's Michigan chapter. Instead, the club is working with unions and community groups to figure out how to replace the jobs and tax revenue River Rouge provides. "Our common interest," says Woiwode, "is ensuring that when the company walks away from the plant, they don't just leave the workers and the community behind."

Meanwhile, DTE seems in no hurry to close River Rouge. John Austerberry, a spokesman for the company, says the plant's future will be determined by the economic implications of the stricter pollution rules the EPA issued last December. Can the company bring the plant into compliance with those rules and still operate it profitably? "I don't anticipate we would make that deliberation soon," says Austerberry. "The rules allow three years" to decide. At 44 deaths a year, that's 132 more lives.

Kevin Parker, a top executive at Deutsche Bank, has called the coal industry "a dead man walking"—in part because of the increased cost imposed by the Obama EPA's new regulations. Tom Sanzillo, the former New York deputy comptroller, saw the same vulnerability when he started taking a hard look at the industry. "I knew that if the law was enforced, coal would have a very hard time," says Sanzillo.

But that was in 2007, when George W. Bush was president and environmental law enforcement was comparatively lax. Back then, Sanzillo—a cheerful, Brooklyn-bred numbers whiz—headed one of the biggest institutional investors in the world, managing $650 billion in assets and serving as the sole trustee of a $156 billion pension fund. In that role, he accepted the conventional Wall Street wisdom that coal was a stable source of predictable profits.

Sanzillo left the job in 2007 and, a few months later, agreed to look into the economics of coal for the Sierra Club. He found that "there were changes going on that I hadn't understood." A construction boom in China was increasing demand for steel, cement, copper, and other raw materials. Companies like Bechtel and GE were sending more of their engineers and other specialists to China, raising the cost of such talent back in the States. "It looked like price structures were going to change long term, whereas the price of coal had always been stable," he says. Adding to the uncertainty was what Sanzillo terms "regulatory havoc"—the new political pressures that stood to increase the cost of burning coal.

"What does it mean that we celebrate the construction of a $100 million wind farm when at the same time a 900-megawatt coal plant was being built?" one environmentalist asks. "That's called losing."

The regulatory havoc had grown out of a 2004 meeting of the Midwest's leading clean-energy activists and philanthropic donors—a network calling itself Re-Amp. Its members confronted a harsh truth, says Fresh Energy's Noble. They had been working the wrong problem, focusing on renewable energy instead of the broader climate picture. "What does it mean that we celebrate the construction of a $100 million wind farm in Minnesota when at the same time a 900-megawatt coal plant was being built?" asks Noble. "That's called losing. If you looked at the problem through the lens of carbon, all the work we had done was undone by a single plant­—a plant that wasn't challenged by a single environmentalist."

The Midwest is the most coal-dependent region in the country; its states get an average of 70 percent of their electricity from coal. (Nationally, it's 45 percent.) At Re-Amp meetings, Noble joined Bruce Nilles—then a Sierra Club activist in Wisconsin—in arguing that henceforth every proposed coal plant in the Midwest should be challenged. "We didn't know how we'd oppose them, we just knew we had to," says Nilles.

At 42, Nilles has leading-man looks that belie his history of tough-nosed activism. Raised in England, he was agitating against nuclear weapons and cruelty to animals before even reaching puberty. After moving to the States during college, he helped organize the first recycling operation at the University of Wisconsin (over administrators' objections) and went on to serve as an environmental lawyer in the Clinton administration. At one Re-Amp strategy meeting, he tangled with a program officer at one of the Midwest's largest philanthropies, the Joyce Foundation, who dismissed the idea of opposing every coal plant—it made more sense, the funder argued, to mount tightly focused legal challenges to a few marquee plants.

Rhonda Anderson, with her niece N'Deye, grew up near the River Rouge coal plant, which the NAACP calls one of the worst polluters in communities of color.: See more photos of the River Rouge plant.Rhonda Anderson, with her niece N'Deye, grew up near the River Rouge coal plant, which the NAACP calls one of the worst polluters in communities of color. See more photos of the River Rouge plant.In a universe where activists' organizations—and paychecks—often depend on the goodwill of foundations, "I was very impressed that Bruce was prepared to go toe-to-toe with a very powerful person and tell him he was wrong," says Rick Reed, a senior adviser to the Garfield Foundation who helped launch Re-Amp.

The test of the dueling approaches came in 2005. In opposing a plant in Wisconsin, the Joyce Foundation "put all their chips on a big-bucks legal strategy, with no politics, and lost at the state Supreme Court," Reed recalls. "That taught us a lesson: You'll never be able to beat these things without an integrated strategy that includes real people who are affected by these plants, who'll reject the economic argument publicly." (The Joyce Foundation, which declined comment for this story, later embraced this idea as well.)

Sanzillo says he saw the value of such an integrated approach in one of the first fights he handled for Beyond Coal. Utilities had proposed two large coal plants in eastern Iowa. Carrie La Seur, an attorney who founded the group Plains Justice, recalls getting phone calls from local people who "didn't like the idea that there would be this big belching coal plant in the midst of prime farmland, and big transmission lines as well."

La Seur began submitting legal challenges to the plants. Meanwhile, Sanzillo, testifying about one of the plants before the Iowa Utility Board, made a straight economic argument (PDF): The project would cost far more than the $1.8 billion the company had estimated, and those costs would be passed on to ratepayers for decades. Local activists echoed that message as they met with legislators, Gov. John Culver, and the editorial board of the Des Moines Register. In the end, they persuaded regulators to put a cap on the plant's cost—any costs above the cap would be absorbed by the company's shareholders, not ratepayers. Presented with this option, the utility chose to cancel the project.

Arming local people with economic arguments was critical, Sanzillo argues: "If the activists hadn't been there talking to the regulators and editorial boards and making the case that coal was a bad bet, the [utility board] would have gone forward, because the utilities would say, 'We can handle the costs,' and the boards are often good-old-boy boards."

The campaign's argument has been straight-up economics: It's getting more and more expensive to build a coal plant, and ratepayers will get suck with the bill.

This approach—hard numbers plus grassroots pressure—became the model Beyond Coal followed in state after state: Wisconsin, Ohio, Florida, even Kentucky, the heart of coal country. In South Carolina, Sanzillo says, activists "put me in touch with small-business associations, and I was able to explain how big industrial interests historically got treated better on these things than small businesses. That was smart, because it got the small businesses fighting with the big industrials, which was just the fight we wanted: a business fight rather than an environmental fight."

Even the cap-and-trade battle, no matter how unsuccessful, provided economic ammunition. A utility company just might be able to manage coal's rising construction and fuel costs, Sanzillo explains. Add the prospect of new clean-air regulations from the EPA, and "you might still be able to manage it, but it's getting dark." Factor in the possibility that cap and trade might be enacted someday and, "Now, if I'm an investor, Coca-Cola is not looking too bad," Sanzillo says, starting to laugh. "They give me 10 percent, and I don't have to worry about climate legislation, the cost of steel in China, and God knows what else."

None of that makes Beyond Coal's next task any easier, though: There is a big difference between fighting a proposed plant and seeking to close one that is already providing electricity, jobs, and tax revenues.

"The key is, you don't do things precipitously," Sanzillo says. After a wave of deregulation transformed New York's electricity markets 10 years ago, he notes, many power companies paid less in property taxes. State officials worked with the affected communities "to phase out the loss of the tax base," sometimes using state money. Nationally, he adds, the same basic principles were applied in the 1990s to help communities cope with post-Cold War military base closures. "The federal government just funded them until the local economies could come back."

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