Coal’s Long Black Tunnel
November 18, 2015
Note to Coal Investors.
That light at the end of the tunnel is a solar collector.
After peaking in 2013, world coal consumption has been dramatically falling in the last two years and, according to the Institute for Energy Economics and Financial Analysis (IEEFA), it is on track to decline an additional 2% to 4% before the end of the year.
The study, which suggests consumption of coal for power is likely to have peaked two years ago, says that happened as a result of declining consumption by main coal-using countries, particularly China.
Following a decade of near double-digit growth, coal consumption in China has declined 5.7% so far this year, U.S. use is down 11%, Canada 5%, Germany 3% and the UK 16%, the report shows.
Of the top coal consumers, only India, as it pursues rapid economic growth and increased electricity access for its population, has seen its coal consumption increase — it is up 3% to 6% year on year.
The global coal industry has been under sustained attack, with scientists and environmental groups saying that more than 80% of known reserves must stay underground to help tackle climate change, investors pulling out of the sector and prices chronically depressed.
As the world’s biggest economies turned towards renewables, such as wind and solar, the situation is likely to get worse. Three major coal miners have already filed for bankruptcy protection this year: Patriot Coal, Alpha Natural Resources and Walter Energy. And last week, Arch Coal said it was talking to creditors about restructuring its balance sheet.
Lexington (Kentucky) Herald Leader:
We doubt that spending more than $11 billion to finish the final 300 miles of the 3,090-mile Appalachian Development Highway System is the smartest way to breathe life into local economies. But the rest of Democrat Hillary Clinton’s $30 billion plan for helping coal communities weather upheavals in the energy market is promising.
Clinton announced her plan last week for places that she said were an “engine of U.S. economic growth for more than a century” and are now suffering. Just having a leading presidential contender talking about the need for investing in the coalfields is a welcome addition to the national debate.
What’s discouraging is the denial in which too many Kentuckians still seem mired – the belief that Obama administration environmental regulations account for coal’s problems and that the mines would hum again if only those rules were lifted.
Harlan County Judge-Executive Dan Mosley described this point-of-view in an interview with the Herald-Leader’s Bill Estep, saying that any plan that fails to address regulatory relief “is not going to be well received in my area.”
Kentucky desperately needs a dose of truth-telling, like that by the president of West Virginia’s largest electrical utility who last month told a gathering of energy executives that coal is not coming back. Appalachian Power President Charles Patton also said the coal industry has already lost the national debate on climate change, according to the Charleston Gazette-Mail.
The cost of natural gas electricity, including construction of power plants and infrastructure, is about $73 per megawatt hour, Patton said. For a conventional coal plant, it’s $95 per megawatt hour.
Coal from Central Appalachia, which includes Eastern Kentucky, suffers a further price disadvantage because of the high cost of mining depleted coal reserves. A ton of coal from Wyoming’s Powder River Basin cost $11.55 on the spot market earlier this month, according to the U.S. Energy Information Administration, compared with $49 for coal from Central Appalachia. The price difference wipes out Appalachian coal’s traditional advantages, higher heat content and lower transportation costs.
Coal jobs have been in decline for most of the last 70 years, as production became more mechanized.
But you can hardly blame average Kentuckians for clinging to empty hopes when we just finished a governor’s race in which candidates from both major parties encouraged delusional thinking about the coal industry’s problems and prospects.
Kentucky desperately needs more leaders who deal in reality.
2020 is not that far away, and if it does come to pass that solar power is cheaper than electricity generated by coal in just a handful of years in such a huge country that consumes tremendous quantities of the stuff, it certainly would be quite a milestone.
“We need to re-engineer our process to create energy efficiency and conservation to give India an affordable energy access. A holistic vision is the need of the hour in order to reach 200 million people at a faster rate. I am personally convinced that any amount of investment in this sector will have a quick pay back,” explained energy minister Piyush Goyal.We’ve already seen that solar power in Chile can be cheaper than electricity produced by coal. Who is paying attention to these developments though? Critics and cynics could say that Chile is a nation of only 17 million with exceptional solar power potential, and therefore is not indicative of a larger solar power trend.
However, India’s population is 1.25 billion, so it can not be dismissed as too small to count. In fact, its population is several times that of US, and India doesn’t have the same wealth or technological development. The US should be able to achieve something along similar lines, if India can in five years.
It doesn’t seem that long ago that naysayers were saying grid parity wasn’t possible with renewables – especially for solar power. Now, it seems we are moving towards a reality where solar power could be cheaper than coal power, in some cases.
Climate Denial Crock of the Week 
November 18, 2015 at 5:46 pm
I don’t see much mention of global dimming on this site, and I visit here often. I’m just curious about your take on this phenomenon. If we actually stopped burning dirty coal–mostly the type being burned in China–is their a possibility that this would temporarily increase temperatures because of the drop in particulates? And of course boost the already rising global temps from C02 and other greenhouse gasses. While it appears to be such a paradox, I’m wondering how much credence to give it. And if it has credence, do we have any chance at all? Thanks for any thoughts.
November 24, 2015 at 6:33 am
cutting coal emissions will also cut down on a lot of black carbon, which is a significant warming effect, especially in the arctic. At least some of the “brown cloud” pollution in Asia has a warming effect, at least locally, according to Veerabhadran Ramanathan, a respected scientist at Scripps, according to wiki. https://en.wikipedia.org/wiki/Global_dimming
November 24, 2015 at 9:49 am
There is perhaps some confusion here about the difference between aerosols and particulates and what “dimming” means—the terms are often loosely applied and do overlap. A couple of references:
http://earthobservatory.nasa.gov/Features/Aerosols/page3.php
http://www3.epa.gov/blackcarbon/basic.html
“Black carbon (BC) is the most strongly light-absorbing component of particulate matter (PM), and is formed by the incomplete combustion of fossil fuels, biofuels, and biomass”.
“BC is emitted directly into the atmosphere in the form of fine particles (PM2.5). BC is the most effective form of PM, by mass, at absorbing solar energy: per unit of mass in the atmosphere, BC can absorb a million times more energy than carbon dioxide (CO2)”.
Some “aerosols” reflect sunlight or promote cloud formation and therefore cool the earth. Others, like BC, are such perfect absorbers of solar energy that they cause major heating effects. If we stopped emitting BC tomorrow, it would mostly fall out of the atmosphere in a few weeks and would LOWER temperatures, not increase them. The “dark snow” in Greenland and the Himalayas is caused by “soot”—BC and other organic carbon—and the algae and bacteria they help nourish. That alters reflectivity or albedo and causes energy absorption.
The Asian “brown cloud” has more than “local” effects—it may bring on one of the earliest and potentially most severe climate change catastrophes—the failure of the monsoon and the deterioration of the Himalayan snow pack to the point that reduced flow in the major rivers of Asia will not be able to support agriculture year round.
I have touted the book “Fire and Ice: Soot, Solidarity, and Survival on the Roof of the World” more than once on Crock. It is an excellent source on the science of soot, black carbon, and the brown cloud as well as a look at the social, societal, and economic aspects of the problem. Such a great read that I bought a copy after reading the one I checked out from the library.
November 18, 2015 at 7:22 pm
How does this square with reports that China’s coal usage may be over 15% higher than previously accepted?
November 19, 2015 at 5:47 am
If China wanted to game things, they would be telling us that they’re usage was lower than previously accepted, or saying nothing.
The fact that they are ferreting out better numbers and accounting errors is a sign of seriousness. They know they are in trouble.
November 24, 2015 at 10:05 am
“…a sign of seriousness…”? IMO, that’s wishful thinking. They spout BS and talk out of both sides of their mouths—-the old cliche of “only time will tell” is true—-we need to forget promises and projections and watch what happens at Paris and over the next five years. Then we can talk about how “serious” they were.
November 19, 2015 at 5:18 am
Anote Tong knows it, the lands and health of his people depend on it. Professor David Archer knows it, he explains it well in his lectures, Professor Richard Alley explains it well too.
Here in the Sydney Morning Herald is a loud plea to Australia from the President of Kiribati.
“Since calling for a halt to the construction of new coal mines in August, the voices of the Kiribati people have already been joined by those of 11 other Pacific islands. Globally our call has been supported by voices as diverse as Sir Nicholas Stern and Naomi Klein. Recently in Australia, 61 eminent scientists, economists, sports people and church leaders supported our call. I take this opportunity to convey my appreciation to all of them for their support and sincerely hope that many more will be able to join this call.”
Can we continue being that heartless ?. . .
http://www.smh.com.au/comment/we-cant-beat-the-tide-if-we-dont-stop-relying-on-coal-20151119-gl2wd8.html
November 19, 2015 at 5:23 am
Exactly what is going on in China, we know they shoot criminals and lock up dissidents – so how can rogue authorities get away with disobeying the regimes directives on coal ?
Seems they can and money talks according to this disturbing Agence France-Presse report.
http://phys.org/news/2015-11-chinese-emissions-coal-peak.html
November 24, 2015 at 10:00 am
A great (and disturbing) link, and it would appear that “exactly what is going on in China” is that they are nowhere near weaning themselves off coal (nor is India). The near meltdown of China’s economy is the major reason that coal use is down, and if it rebounds and they need energy NOW, coal use will climb. Greed and “profit” trump all.
The Paris talks are going to be beyond important—-they will be make-or-break. If the nations of the world (particularly China and India) do not reach significant agreement and show rapid progress on reducing fossil fuel use, we may as well bend over and kiss our rear ends goodbye.
November 24, 2015 at 10:22 am
There may be some light at the end of coal’s long dark tunnel.
The WashPost has been running a series titled ” POWER PLAY | Cheap electricity, a changing climate: This is part of a series exploring how the world’s hunger for cheap electricity is complicating efforts to combat climate change”.
The latest installment from today.
“ROTTERDAM — In this traffic-packed Dutch city, electric cars jostle for space at charging stations. The oldest exhaust-spewing vehicles will soon be banned from the city center. Thanks to generous tax incentives, the share of electric vehicles has grown faster in the Netherlands than in nearly any other country in the world”.
“But behind the green growth is a filthy secret: In a nation famous for its windmills, electricity is coming from a far dirtier source. THREE NEW COAL-FIRED POWER PLANTS, including two here on the Rotterdam harbor, are supplying much of the power to fuel the Netherlands’ electric-car boom” (emphasis added).
https://www.washingtonpost.com/world/electric-cars-and-the-coal-that-runs-them/2015/11/23/74869240-734b-11e5-ba14-318f8e87a2fc_story.html?hpid=hp_rhp-top-table-main_electriccars-1015pm%3Ahomepage%2Fstory
The WashPost and others have reported before that the rise of electric cars is going to help keep coal alive a while longer. True to form, Elon Musk has opened a Tesla factory in the Netherlands to make sure the Dutch need to build more coal-fired power plants. Mars, here we come.