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07/25/2012 03:28 PM     print story email story  

US Doesn't Need Coal, Should We Export It?

SustainableBusiness.com News

Coal consumption in the US slipped to its lowest levels since 1988 in the first quarter of 2012, and it's glory days could finally be over here.

Coal provided a full 50% of US electricity 10 years ago, now it's down to 33%, bringing the average American's carbon footprint to 1965 levels!

Across the US, coal consumption dropped to 206.9 million tons, while stockpiles climbed to 244.4 million tons, reports the US Energy Information Administration (EIA).

That's because of cheap natural gas prices, a mild winter and because some of the oldest, outdated coal power plants are shutting down, rather than comply with upcoming EPA regulations. Therefore, mining is down - some 10.7% for the quarter in the largest production area in the US, Wyoming's Powder River Basin.

Consol Energy is even closing a mining complex in West Virginia, the No. 2 coal state, because inventory is piling up.

Then there's New York, which has new emissions regulations that make it virtually impossible to build or expand coal power plants there.

"By preventing new high-carbon sources of energy, this performance standard will serve to further minimize the power sector's contribution to climate change, which poses a substantial threat to public health and the environment," says Joseph Martens, Commissioner of the NY Department of Environmental Conservation.

Exports Remain High

But demand for coal remains high outside the US, notably in China, and even in the UK, and exports from the US are up. They rose about 3.5% in the first quarter - some Appalachian mines now export 100% of their coal.

Should the US endanger its citizens' health, destroy our environment and contribute to climate change by exporting our coal?

Rep. Ed Markey (D-MA) commissioned a report, "Our Pain, Their Gain," which asks that question.

"American families are being subjected to coal mine pollution and damage, just so exports to China and other foreign nations can increase," he says. "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."

Besides being the leading source of US greenhouse gas emissions, coal's pollution contributes to four out of the five leading causes of mortality - heart disease, cancer, stroke, and respiratory illness. It emits almost half of all mercury pollution, which causes developmental problems in babies and young children, and is a major contributor to asthma. Coal pollution causes $100 billion in health costs annually.

In June, the US Bureau of Land Management auctioned a major tract of Wyoming coal to a single company - Peabody Energy - at a bargain-basement price of $1.10 per ton.

The report comes as Republicans and the coal industry are attempting to push back safeguards that protect communities from coal mining pollution, such as rules that protect streams and drinking water from mountaintop mining operations.

They also seek to gut funding for measures that would reduce the occurrence of black lung in mine workers. In a time when black lung is rising to some 10% of long term workers, a new rule would prevent workers and the industry from monitoring levels of coal dust that workers are exposed to.

And there's a battle in the Pacific Northwest about whether to build terminals to export coal.

The UK, which is consuming the most coal in years, gets most of it from Russia and China has big plans to get more coal from Mongolia, its biggest coal supplier and the world's fastest growing economy.

Mongolia Mining Co. is spending $800 million on a railway to double its coal exports to China, getting it there in just 2-3 hours.

China's coal consumption rose 9.7% last year to 3.7 billion tons, the biggest annual increase since 2005 and almost half the world's total consumption. Projections suggest its demand could reach 4.3 billion tons by 2015.

Report Debunks Coal Economics

But a report challenges the argument that coal is a cheaper option than renewable energy.

The days of cheap coal are over, concludes Locked In: The Financial Risks of New Coal-Fired Power Plants in Today's Volatile International Coal Market. It warns developing countries that locking themselves into coal plant investments puts them at significant financial risk from rising costs.

Authored by Bruce Buckheit, former Director of the EPA's Air Enforcement Office, the report points to commonplace cost overruns of up to 100% in coal plant construction; rising global coal prices; and the emergence of several powerful coal producing countries that it calls the Organization of Coal Exporting Countries (OCEC) that will closely control supply.

Environmental and public health concerns aside, all of this makes investing in coal-fired power plants inherently risky and unaffordable for countries around the world, he says.

The top two coal producers, Australia and Indonesia, account for more than 50% of global coal exports, providing ample opportunity for maintaining high coal prices, the report says. And investments in China and India are particularly risky because these countries have regulations preventing passing these costs to consumers.

In India, for example, an uncompleted 4 GW coal project is looking to be released from long-term power purchase agreements in the face of billions of dollars in losses, and the recently completed Spiritwood Station coal plant in North Dakota opted to remain idle rather than operate at a loss.

Contrast that with the cost of renewable energy, which is quickly becoming competitive with coal power, they say. The price of solar PV-generated power is down over 60% since 2008 and wind power is competitive with coal in any market at 5-10 cents/kWh.

"Countries and financial institutions that lock themselves into coal investments are exposed to the risk or volatile international fuel markets -- something clean energy investments avoid."

Sierra Club's "Locked In" report:

Website: http://www.sierraclub.org/international/lockedin/



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