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Coal Comfort

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Coal Comfort

The EPA hates the carbon-heavy fuel, but it’s here to stay. Summer 2012
Infrastructure and energy
Economy, finance, and budgets

About one train per hour. That’s the target loading rate for the massive silos, conveyors, and hoppers at the North Antelope Rochelle Mine in Wyoming, the most productive coal mine in the world. And on a cool, nearly windless day in late March, Scott Durgin, a regional vice president for Peabody Energy, was happy. Standing in the mine’s dispatch office, Durgin pointed to a flat-panel display showing a list of trains that had recently passed through. It was exactly 12 noon, according to the clock on the wall, and since midnight, the mine had loaded 11 trains, each carrying about 16,000 tons of coal. I asked Durgin how long Peabody could continue mining in the region. Easily for another five decades, he replied: “There’s no end to the coal here.”

Wyoming's North Antelope Rochelle Mine produces three tons of coal per second.
Photographs by Robert Bryce
Wyoming’s North Antelope Rochelle Mine produces three tons of coal per second.

The scale and productivity of the mine are difficult to imagine. It produces about three tons of coal per second. But despite its staggering output, the North Antelope Rochelle Mine—along with the other 1,300 coal mines operating in the U.S.—is being threatened by the Obama administration. On March 27, just two days before my visit to the mine, the Environmental Protection Agency announced a proposal that would, if enacted, outlaw the construction of new coal-fired power plants in the United States. The EPA’s motives are clear: it believes that these plants, by emitting carbon dioxide in profusion, contribute to global warming.

There’s no denying that coal has earned its reputation as a relatively dirty fuel. But those concerned about CO2 emissions and climate change should realize that the administration’s attack on coal is little more than a token gesture. The rest of the world will continue to burn coal, and lots of it. Reducing the domestic use of coal may force Americans to pay higher prices for electricity, but it will have nearly no effect on global emissions.

The mine's vast coal seam is 80 feet thick.
The mine’s vast coal seam is 80 feet thick.

Coal has been an essential fuel for electricity production ever since 1882, when Thomas Edison used it in the first central power plant, at 255–57 Pearl Street in lower Manhattan. Edison’s technological breakthroughs at Pearl Street—the list includes the incandescent bulb, the safety fuse, the light socket, the generator, and insulated wiring—led to a tsunami of electrification that continues to this day. By 1890, just eight years after Edison began the revolution, there were 1,000 central power stations in the United States, and new ones were being added at a frenzied pace. All of them burned coal.

Of course, Edison wasn’t the first to exploit coal. The first instance of coal use probably occurred in China some 3,000 years ago. But coal became far more controversial during the Industrial Revolution, when its use in factories made some cities nearly uninhabitable. On one particularly nasty day in London in 1812, a combination of coal smoke and fog became so dense that, according to one report, “for the greater part of the day it was impossible to read or write at a window without artificial light. Persons in the streets could scarcely be seen in the forenoon at two yards distance.” Today, the same problem is plaguing China. The New York Times reports that in Datong, known as the City of Coal, the air pollution on some winter days is so bad that “even during the daytime, people drive with their lights on.”

Air pollution is only part of the coal industry’s environmental and human toll. The industry damages the surface of the earth through strip mines, mountaintop removal, and ash ponds at power plants. In addition, thousands of workers die each year in the world’s coal mines—about 2,000 last year in China alone.

But the media and policymakers are more focused on the amount of carbon dioxide that coal-fired power plants emit. In a 2009 opinion piece for the Guardian, climate scientist James Hansen declared coal “the single greatest threat to civilisation and all life on our planet,” adding, for good measure, that “the trains carrying coal to power plants are death trains. Coal-fired power plants are factories of death.” Powerful environmental groups like the Sierra Club—which, by the way, is getting $50 million from New York mayor Michael Bloomberg to help fund its “beyond coal” campaign—are pushing for a total ban on coal-fired electricity generation in the United States.

The EPA’s proposed rule banning new coal-fired electricity generation results directly from the fear of climate change. Pointing out that greenhouse gases “endanger both the public health and the public welfare of current and future generations,” the rule would cap the amount of CO2 that new fossil-fueled electricity generation units can emit, at 1,000 pounds per megawatt-hour. That would rule out coal-fired units, which emit about 1,800 pounds of CO2 per megawatt-hour. (Natural gas–fired units emit about 800 pounds per megawatt-hour.) The EPA claims that it has the authority to regulate CO2 under the Clean Air Act and therefore doesn’t need congressional approval to impose the ban. The rule will probably be enacted during the next few months, after the agency collects comments from the public, though subsequent litigation and political fights are certain.

But even if the EPA and the Obama administration succeed in prohibiting new coal-fired electricity generation in the United States, they will leave global coal demand and CO2 emissions almost unchanged. Over the past decade or so, American coal consumption fell by 5 percent, but global coal consumption soared, growing by about the same amount as the growth in oil, natural gas, and nuclear combined. Coal now fuels about 40 percent of global electricity production. Coal’s dominance helps explain why global CO2 emissions rose by 28.5 percent between 2001 and 2010, even as American CO2 emissions fell by 1.7 percent. Over the past decade, even if American emissions had dropped to zero, global emissions would still have increased.

And coal consumption will keep rising as electricity consumption rises. Between 1990 and 2010, global electricity production increased by about 450 terawatt-hours—roughly the amount of electricity that Brazil consumes—per year. The International Energy Agency (IEA) expects electricity use to keep growing by about one Brazil per year through 2035. Given this surging electricity demand, it’s no surprise that between 2001 and 2010, global coal consumption rose by 47 percent, or the equivalent of about 23 million barrels of oil per day. During the same period, daily consumption of petroleum grew by 10 million barrels, while natural-gas consumption grew by the equivalent of 12.9 million barrels of oil per day and nuclear-energy consumption grew by the equivalent of 510,000 barrels per day.

Coal is helping meet the world’s electrical demands for a simple reason: it’s cheap, thanks to the fact that deposits are abundant, widely dispersed, easily mined, and not controlled by any OPEC-like cartels. The Energy Information Administration (EIA), part of the U.S. Department of Energy, reports that from 1999 through 2010, coal was consistently the cheapest source of fossil fuel for electricity generators—usually costing about half as much per Btu as the next-cheapest fuel, natural gas.

And coal will continue to be a low-cost option. In its latest energy forecast, ExxonMobil predicts that in 2030, the cheapest form of electricity production will remain coal-fired generation units, with a total cost of about $0.06 per kilowatt-hour. At that price, electricity produced by coal would be cheaper than electricity produced by natural gas, nuclear, wind, or solar photovoltaic panels.

Many entrepreneurs have tried and failed to beat coal on price. For instance, back in 2007, Google trumpeted plans to develop renewable-energy sources that would be even cheaper than coal. “We are optimistic this can be done in years, not decades,” said Larry Page, the Internet search giant’s cofounder. The company’s effort lasted less than four years. In November 2011, Google quietly abandoned its quest, saying merely that “other institutions are better positioned than Google to take this research to the next level.”

The best example of the world’s growing hunger for electricity is Vietnam, where electricity use increased by 227 percent between 2001 and 2010—faster than in any other country. This insatiable demand for electricity is why, during the same period, Vietnam’s demand for coal increased by 175 percent—again, faster than in any other country. Such heavy reliance on coal gave Vietnam an additional distinction: the world’s fastest-growing carbon-dioxide emissions between 2001 and 2010. What can the Obama administration say to Vietnam about curbing this apparent threat to the climate? Very little. The average annual income of Vietnam’s 90 million residents is $1,200.

Or consider China, which has about 650,000 megawatts of coal-fired electricity generation capacity, more than twice as much as America’s 317,000 megawatts. China is also planning to build another 273,000 megawatts of coal-fired capacity. The growth in China’s CO2 emissions between 2001 and 2010 was 123 percent, a rate only slightly lower than first-place Vietnam’s. Again, there’s little that the United States can do about that.

We needn’t look only at developing countries like Vietnam and China to see the essentiality of coal. In the wake of last year’s accident at the Fukushima nuclear facility, Japan recently shut down all its reactors, and Germany—which has the biggest economy in Europe—is rushing to follow suit. Though renewable-energy projects are the darling of European politicians, German utilities are placing their bets on coal. According to a report issued this past April by Germany’s National Association of Energy and Water, nearly 14,000 of the 36,000 megawatts of new electricity generation capacity being planned for Germany will probably be provided by coal-fired facilities.

All the major forecasting entities—the EIA, the IEA, and the energy company BP—agree that global demand for coal will keep rising. By 2035, the EIA predicts, coal consumption will rise by about 38 percent, to some 98.5 million barrels of oil equivalent per day, a number roughly in line with the IEA’s and BP’s projections. All three, moreover, predict that for decades to come, coal will maintain a major share of the world’s energy consumption: 28 percent of the global energy market by 2030, according to BP; 30 percent by 2035, according to the IEA. Those are remarkable projections when you consider that coal’s share of global energy consumption was 30 percent way back in 1970.

Low cost isn’t the only reason for coal’s dominance. Another is “power density,” the amount of energy flow that can be harnessed from a given area of land (see “Get Dense,” Winter 2012). Let’s return to the North Antelope Rochelle Mine, which produces about 109 million tons of low-sulfur coal per year. Once you account for the energy lost during the conversion of coal to electricity, the mine yields the energy equivalent of about 300,000 barrels of oil per day. Solar and wind energy production, meanwhile, provided the United States with 333,000 megawatt-hours of electricity per day in 2011—the equivalent of 203,000 barrels of oil. The point isn’t merely that a single mine produces about 50 percent more energy on an average day than all the country’s solar panels and wind turbines combined. It’s that the mine covers just 80 square miles, while domestic wind projects now cover about 9,400 square miles—an area approximately the size of Maryland. The low power density of renewable-energy projects in general, and of solar and wind in particular, will prevent them from taking a large share of the electricity market away from coal.

Likelier competitors are natural gas and nuclear, which have a number of advantages over coal. Both are able to produce large quantities of reliable electricity, and both have lower CO2 emissions than coal does. Natural-gas use here and abroad will undoubtedly rise in the decades ahead; supplies of the cleanest of the hydrocarbons are growing rapidly around the world, thanks to the shale revolution and continuing exploration successes in places like Africa, the Mediterranean, and Asia. Nuclear energy is also likely to see significant growth.

But even if natural gas and nuclear are able to ramp up dramatically, it will be hard for them to match the amount of energy now being derived from coal. This year, global coal consumption will total about 71 million barrels of oil equivalent per day. Global natural-gas consumption, meanwhile, is about 58 million barrels of oil equivalent per day. For natural gas to replace coal completely, gas production would have to more than double. Making that happen would require decades of sustained and expensive exploration and production. As for nuclear energy, it is hampered by huge start-up costs, and many countries simply don’t have the infrastructure or human capital needed to support the nuclear industry.

Since the days of Edison, the United States has relied on abundant supplies of coal to sustain its economy and to produce the electrons that are the currency of modernity. There’s no natural reason for that dependence to end: America’s coal deposits contain 900 billion barrels of oil equivalent, nearly as much as the 1 trillion barrels of proved oil reserves held by OPEC. At current rates of production, domestic coal reserves will last for another 200 years. The only obstacle is the EPA, which wants to shut down coal-fired generation even though doing so will have no discernible effect on climate change or CO2 emissions. In fact, the EPA’s rule simply encourages domestic coal producers to ship more of their product to overseas electricity producers, who will happily burn it.

We don’t have to adore operations like the North Antelope Rochelle Mine or the generators that burn the fuel it produces. But given the world’s insatiable demand for electricity—and all the wealth- and health-enhancing opportunities that come with cheap, abundant, reliable supplies of electricity—it’s obvious that coal will be powering the global economy for many decades to come.

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