Energy vs. Environment

In 2003, Duke Energy asked its former president, Paul Anderson, to come out of retirement to help lead the Fortune 500 company out of the post-Enron ditch that much of the energy industry had fallen into. Anderson had been gone since 1998, when he left Duke for Australia to run one of the world's largest mining companies, BHP Billiton. There, Anderson got to know Tim Flannery, a research scientist at the Australian Museum in Sydney. Though they made for strange bedfellows, the two forged a unique relationship based on a common belief: reducing carbon emissions is the major challenge facing mankind.

Before stepping down in April as CEO, Anderson helped Duke regain its financial footing. Now, as chair of Duke, Anderson has begun turning his attention toward issues of climate change. To the surprise of environmentalists and energy industry insiders alike, Anderson's forward to Flannery's 2005 book, "The Weather Makers," made an impassioned call for immediate action, lest we face cataclysmic results within 50 years. Though Duke Energy is still the country's third-largest consumer of coal, Anderson is the rare energy executive willing not only to acknowledge the problem of carbon emissions but also to address the issue. He spoke to NEWSWEEK's Matthew Philips. Excerpts:

NEWSWEEK: Why did you decide to write the forward to "The Weather Makers"?

Paul Anderson: The simple answer is that I know Tim [Flannery] and have a lot of respect for him. While I was in Australia, the issue of [the] Kyoto [climate change protocol] was being debated. I was vice chair of a business council at the time and participated in a debate of what business's role should be. I was viewed as a wild-eyed radical, as the CEO of the world's largest mining company and saying that we should do something about CO 2 .

Doesn't this go against the business interests of Duke Energy?

No. It's in the best interests of Duke to get out ahead of the problem as opposed to waiting. I don't want to just chant the same company line because I don't believe it. It's the same as when a lot of people in the industry were opposed to doing something about sulfur dioxide. When the Great Lakes were dying, people drug their feet. But when we all got on the bandwagon and decided to do something, we eliminated the SO 2 in the atmosphere without an economic backlash. It's amazing how easy it is to resolve these problems.

What's been the reaction among your colleagues?

The reaction has really been all over the map. The CEO of one company was sent to perform an exorcism on me. He was joking, but that's what he called it, exorcising me. He was there basically to argue the other side of the issue, that there wasn't a major CO 2 problem. Other CEOs will say they agree with me 100 percent, but just don't think it's a good idea to publicly acknowledge it. Part of it has to do with how close someone is to retirement. They think, "If I can just get through the next few years without addressing this."

How invested is Duke Energy in alternative energy and nuclear power?

Probably our biggest thrust is nuclear power. That's where we see the future. Nuclear power is really the only source of power than can produce the quantities of energy we need and still reduce CO 2 . It is the answer. But another thing that we're doing is exploring IGCC [Integrated Gasification Combined Cycle] coal-fired plants.

What's that?

An IGCC plant uses the gas from coal to run a generation facility that also captures the CO 2 . Basically, you take the coal and gasify it. That strips out the emissions. Some call it clean coal.

How extensive are Duke Energy's nuclear operations?

We have seven units right now. We've got a new site in South Carolina where we're building, the Cherokee site. We've been in the nuclear business for quite some time now.

Are attitudes changing regarding nuclear energy?

For the last couple of years I have sensed that concern about the environment is starting to change the tide on nuclear. The antinuclear movement has been blunted by the "Let's do something about global warming" trend. I think everybody was very enthused about nuclear back in the '60s. Political opposition to it was based largely on antiproliferation. Obviously, Chernobyl was a terrible event. But I don't think there will ever be another Chernobyl. History has shown that nuclear is really an attractive fuel. So the political opposition has shifted a bit, and that's been driven by the question of, "What's worse: fear of nuclear energy or fear of global warming?"

How much more advanced are today's nuclear reactors?

The plants are much safer and simpler now. If they used to have a one in a million chance of something going wrong, now it's one in a billion. They have a lot less moving parts. While there haven't been any new nuclear plants [ordered] in this country [since the ‘70s], they've continued to be built around the world as the technology has advanced globally. [The American nuclear plants that came on line in the ‘90s were actually ordered two decades earlier.]

Are you optimistic about our chances of combating global warming, or are we doomed?

I think it's very much a matter of how we chose the solutions. Some would have an effect tomorrow, and some not for another 20 years, which is too late. IGCC plants could make a huge difference. At some point, we really could sequester carbon emissions and have a much cleaner-burning plant. But that piece of technology isn't ready for prime time yet. It's necessary for the long run, but building those plants today is like shoveling in the sand. We're going to have to come up with a carbon tax, and that will depend on whether there is a mandate from the general population, whether you start hearing people saying their major concern is climate change.