An Even Bigger Cleanup Job

What about clean coal? Is it commercially viable?
We have made a huge bet on cleaner coal because coal has to be part of the solution. It's economical from an energy-security perspective. The question is, how do you get the first 10 to 20 plants done? You know they're going to be expensive. The first 10 of anything need help. So we're never going to get to 11, 12 or 13 if we don't get those first ones started, and yet there's really no policy action on this yet.

You'd like to see a more active role from the government.
We absolutely need it. We have to have loan guarantees, some incentives. And the whole issue of liability on the sequestered CO₂ has got to be worked out.

Right, because a lot of people say storing sequestered CO₂ in the earth may be dangerous. There may be seepage.
Lots of people say lots of things. The folks that I've been speaking with, people in the industry who currently put in and take things out of the earth every day, like oil and gas guys—they have no concern. They say, "We take these risks every day, and we have for decades."

But it's not just the liability issue holding back cleaner coal plants?
If there's no price on [carbon], you're never going to build a plant that's 15 percent more expensive. But I think folks are going to start getting a lot smarter. They're thinking, I'm not going to own this plant for five years. I'm going to own it for 40. Do I think there will still be no price on CO₂ in 20 years? No.

With regard to Ecomagination, how would you respond to the accusation that you're "greenwashing," making yourself look more environmentally friendly by bunching together existing programs and calling them all green?
You've got to look at what we're doing for our own credibility internally. We've made a commitment to reduce our own greenhouse gases and our own energy intensity, and we are exceeding all those commitments. We said we would reduce our absolute carbon footprint by 1 percent vis-à-vis our 2004 baseline, and do so by the year 2012. We just got the numbers in, [and we're already] about 9 percent down. Because of that, we saved the company about $100 million in energy costs.

Is all this moving faster than you had thought when you took the job?
Yes, it is. I was just in Australia. In November, they decided, "We're going green." Holy cow. It was unbelievable. By July 1, companies have to start doing inventory of their CO₂ emissions. They're working on a cap-and-trade system, and it's going to be introduced in 2010. So companies from banks to BHP Billiton are thinking, "How do we reduce our carbon footprint?" It really tipped. And we are very like-minded with Australia.

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