Is clean coal energy a dirty business?

(Fortune) -- In the energy business, Jim Rogers is an anomaly. His company, Duke Energy, relies heavily on coal, a rock that accounts for 45% of America's energy use. Yet Rogers is also an environmentalist and a believer in renewables.

To date, Rogers and Duke Energy (DUK, Fortune 500) has invested over $1 billion in wind technology, participated in the Copenhagen Climate Conference, and partnered with companies in China, which includes an agreement with ENN Group to build large-scale solar power plants in the United States.

He's also a believer in "clean coal," the idea that carbon dioxide can be segregated from coal and pumped deep beneath the earth. Duke is investing in a coal gasification plant in Indiana to prove the technology. If it works, it might help the environment, but it won't do much to stop coal's rough record. Though 2009 saw a record low of 18 coal-mining fatalities, the industry has been plagued for years with questions over safety practices. With at least 25 dead in Monday's accident in Montcoal, W.Va, and President Obama's emphasis on clean coal as a bridge to renewable energy, those questions will surface once again.

We spoke with Rogers on March 31, a week before the Massey Energy (MEE) coal mine explosion. Massey counts Duke among its customers and Duke declined to comment about the disaster. But there is little doubt that Rogers is closely watching what's happening in West Virginia. Here's what he had to say about why he still supports the black rock, about Europe's "climate fatigue," and about retirement (for his plants, at least).

Though Duke currently relies heavily on coal, you're a cap-and-trade supporter. What's a coal guy doing supporting the strict enforcement of carbon emissions?

The reason I'm an advocate for cap and trade, and for addressing the other pollutants from coal plants, is that my job is to provide solutions. Also, I think there's the recognition that by 2050, every power plant I -- or we -- own today or operate will eventually be retired or replaced, with probably the exception of our hydro facilities. So, if we're going to have to retire a place anyway, I'd like a clear roadmap with respect to carbon, coal, and nuclear.

The fact of the matter of is, every technology we use today each has its strengths and shortcomings, whether it's nuclear, coal, gas, or renewables, when you look at them against the criteria of affordable, reliable, and clean.

Until recently, China was an easy fall guy for energy and climate issues. But that tune has clearly changed. Case in point: Duke Energy has paired up with three companies in China. So you obviously see a lot of growth potential there.

China has an economic imperative to build power infrastructure. They build a coal plant every other week. They have 14 nuclear plants under construction, more than any other country in the world. They lead the world in solar panel and wind-turbine production. They are working hard on battery technology for cars and grid-quality battery technology.

My mission is affordable, reliable, clean, and so my mission is to have a nuanced relationship with the Chinese. We're sophisticated enough to recognize that we're going to be competing and cooperating on things. In the energy areas, specifically in power production, they could help us as we rebuild our infrastructure to rebuild it in a way that makes it more affordable to our customers.

My bet is it will take us a decade in this country given the environmental impediments and just the inability to make things happen in a real time. They will know the answer as to whether this is a viable commercial alternative. It has a profound implication in terms of the role of coal in the future. I'd rather learn that in five years than 10 to 15 years. So by tuning into their work, it gives us the ability to make a smart decision about what to build sooner.

Today, you have over a billion dollars invested in wind. I'm wondering if you can elaborate on your progress and still-untapped potential with that tech.

We're the 10th largest developer. Three years ago, we had no wind. It's a good business to be in. ... I think that wind investment is one part of a renewable build-out strategy that we have. We're ahead on it. We've done it for years.

Recently, you mentioned you'd observed European countries experiencing what you called, "climate fatigue." Talk more about that.

Two things are happening: I see that the mechanism that European countries have used to drive renewables have reached an interesting point, translating into higher prices for consumers, residential, and commercial, notwithstanding the tax subsidies which translates to higher taxes. As a result, you're starting to see some pushback.

Both Germany and Spain have adopted hidden tariffs, and they are dramatically dropping price pay, and that is really slowing down the investment in solar. The other important thing is Germany is experiencing difficulty at night because they built so much wind that they're having to recycle some of their coal plants, which are much cheaper, and there's even been times when they've had to reduce the production from nuclear.

We're the third-largest nuclear operator in the country, and let me tell you, when you turn those puppies on and you run them, the last thing you want do is turn them down because it's safer, reliable, and less costly to just run them all out 24/7.

So what do you see as a solution to that?

I think the real answer will be -- and I say this with total humility -- from a U.S. and China perspective. The two largest emitters, this developing country and the largest developed country, should find a way to work together to accelerate technology to really reduce the carbon footprint and do it in a way that's fair to both countries. Because if people see those countries in action, I think the rest of them will sign up.

Now remember, I say that with humility because at the end of the day, this is going to require the consensus of many countries, and I don't think the G2 coming together and dictating to the rest of the world is enough.

We've talked about your immediate plans. Where do you see the industry going in the next 10 years or so?

I think this is the most transformative period since the era of Edison, Westinghouse, and Tesla. Our mission was to provide universal access in America with electricity. We did it. In fact the National Academy of Engineers says that was our greatest achievement, more than going to the moon, more than the Internet, more than all those.

That's certainly a bold statement to make.

Recently, I read somewhere something that stuck with me. "Every day, I wake up wondering what I'm dead wrong about." I looked at this strategy, and I looked at this dual mission, and I said to myself, if the report from the Intergovernmental Panel on Climate Change was wrong and carbon wasn't a problem, would I change my mission? Would I change my vision? Would I change what I'm doing today?

The answer is of course, no, I wouldn't change a thing because we're going to have to modernize our fleet and for energy efficiency anyway. There are 1.6 billion people today, five times the United States population or more, without electricity, without access to the modern world today. Between now and 2050, we're going to go from 6.5 to 9 billion people, and they're going to want more electricity.

So the battle over scarce resources to generate electricity and building power plants is going to be tremendous. I'm 62-years-old, and a year ago, I signed up for five more years as CEO, because I want to be here when this happens. I want to be a part of shaping that dual mission of modernization and de-carbonization of our fleet and making our communities the most energy-efficient in the world.