America's Coal Export Dilemma Intensifies

Believe it or not, the use of coal is skyrocketing around the world.

Over the past year, we’ve seen its use decline significantly in the US as more plants are shuttered and natural gas and renewables take its place, but that’s the not the case elsewhere. And because of this progress inside the US, our coal industry desperately wants to export.

These days we live in a world of two faces. On the one hand, calls from the International Energy Agency grow louder to immediately address climate change, as in yesterday’s report. In the US, Hurricane Sandy brought its consequences into sharp relief.

All countries seem to grasp that urgency, having to deal with their own frequent natural disasters, but their desire for cheap energy still supercedes their longer term interests.

It still costs a third less to use coal than wind or solar, and coal provides reliable, baseload power.

So that trumps the fact that using coal is a primary driver of climate change. 

Emerging economies such as China and India are building coal plants at a frantic rate, even though it’s wreaking havoc on their water supplies. Even Europe is importing coal because it’s cheaper than natural gas there.

Frantically Building More Coal Supply

Last year, coal supplied about 30% of the world’s energy, the highest level since 1969. If the trend continues, consumption could rise 50% by 2035, according to the World Coal Association. It could even surpass oil as the world’s primary fuel in a year or two.

Global demand could grow to 8.9 billion tons by 2016 from 7.9 billion tons this year with most of that coming from China (700 million tons), reports Peabody Energy.

In the next four years, China will build 160 coal plants (240 gigawatts (GW)) and India has plans for 46 plants (70 GW). Under is 12th Five Year Plan (2011-15), China is investing $79 billion per year in its coal industry.

"If you poke your head outside of the US, coal-fired plants are being built left and right," William Burns, an energy analyst with Johnson Rice, told The New York Times.

All that demand is for thermal coal, which is burned in power plants. But there’s yet another kind of coal – coking coal that’s used in blast furnaces to make steel – that’s also skyrocketing as emerging countries build skyscrapers and manufacture cars. China’s demand, for example, is expected to more than double by 2016, to about 1.7 billion metric tons.

It probably won’t reassure you, but China does plan to use modern pollution controls on new coal plants.

Although plenty of countries want to export coal, such as Mongolia, Colombia and South Africa, it’s not as easy as it looks. In Mongolia, coal would have to shipped from remote areas where no roads or train lines exist, and South Africa is prone to labor unrest. Australia, the world’s biggest exporter, could see higher prices because of its new carbon tax.

Therefore, eyes are on the US, where the primary barrier is a lack of ports for export from the Northwest. 1500 miles of train lines would have to built to carry the coal from the huge Powder River Basin deposits in Wyoming and Montana. Protests have begun in Oregon and Washington to prevent those states from building ports and environmental groups decry the prospect of coal dust spewing in the air on route to them.  

353 US Coal Plants Ripe for Retirement

Meanwhile, coal use is dropping in the US and 18% of our coal-generating capacity is ripe for retirement because it is inefficient, dirty and no longer cost-competitive.

This year, coal consumption slipped to 1988 levels, largely because of low natural gas prices and the closure of some of the oldest, outdated coal power plants, including two of the biggest in Chicago. Coal consumption is also down because the US is becoming more energy efficient thanks to our new fuel economy standards for vehicles and a drive to make appliances, homes and buildings more efficient.

Another 288 plants are scheduled to close and another 353 plants in 31 states – producing 59 GW or about 6% of US electricity – should be subjected to a similar fate, says the Union of Concerned Scientists, out of a total 1,169 US coal plants.

In its report, "Ripe for Retirement: The Case for Closing America’s Costliest Coal Plants," Union of Concerned Scientists shows that soon it will be more expensive to keep these plants running with the necessary pollution controls than to convert to cleaner and more efficient sources.

Coal plants ripe for closure are already living on borrowed time. On average, they are 45 years old, well beyond the typical 30-year lifespan. These oldest plants generate the most emissions of harmful pollutants and greenhouse gases.

Using cleaner alternatives would reduce greenhouse gas emissions from the power sector by 9.8%-16.4%, depending on whether replacements are renewables or natural gas. It would also avoid emissions of 1.3 million tons of sulfur dioxide, 300,000 tons of nitrous oxide and large amounts of mercury.

The coal industry is well aware that it’s glory days may be over in the US, which is why they’re pushing so hard to export it.

Some mines export 100% of their coal now and mining is down in the largest production area in the US, Wyoming’s Powder River Basin. A West Virginia mine closed because inventory is piling up.

Should the US become a major coal exporter?

"American families are being subjected to coal mine pollution and damage, just so exports to China and other foreign nations can increase. The coal may be shipped to foreign markets, but the diseases, the destroyed mountaintops and the environmental ruin from these destructive practices are staying right here in America," says the report, "Our Pain, Their Gain."

Here’s report, "Ripe for Retirement":