Posts tagged “coal”

The battle for market share in power generation is primarily between historically abundant and relatively cheap coal and environmentally cleaner but increasingly abundant Natural Gas (NG).

The increasing supplies of NG driven by the productivity of unconventional shale exploration and drilling has pushed NG prices lower over the last few years. With lower NG prices has come greater NG use as a fuel source in power generation.

While many in the media have sounded the death knell for coal as a power fuel source, and in the very long-term I think coal usage will gradually diminish, it will take years — perhaps even decades — for coal to be relegated to an insignificant role in power generation, but I am convinced it will occur.

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Europe’s Emissions Cap

Recently, there have been a spate of articles in the press saying that Europe’s increasing imports of coal undermines  their leadership on climate and their ‘green’ credentials.

This shows a fundamental misunderstanding of the European Emissions Trading Scheme (ETS) in particular, and the nature of a market-based emissions cap (AKA cap-and-trade) system in general.

Granted, the ETS is an imperfect cap because it only covers about 45% of total emissions in the EU – most notably it does not include emissions from home heating or automobile transportation. Importantly, though, it does cover major industrial emitters and utility-scale electricity production, which are the major users of coal.

(Read More: Global Carbon Dioxide Emissions — Facts and Figures)

However, the articles continually say things like this, in Friday’s Washington Post: “Green-friendly Europe has a dirty secret: It is burning a lot more coal.” The schadenfreude exhibited in these articles is unrelated to Europe’s actual record on climate policy.

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A report issued by the International Energy Agency (IEA) suggests that coal will surpass oil as the world’s most popular fuel source within 10 years, threatening to inject more greenhouse gases into the air than ever before if policy changes don’t follow the warning.

The boost in coal use is due to extreme growth in emerging markets like China and India, countries that require cheap fuel sources for electricity production in order to support their quickly growing infrastructures and populations. At current rates of growth, the IEA says that it expects that coal consumption will rise to 4.32 billion tonnes of oil equivalent versus 4.4 billions tonnes of oil per year worldwide within only four years; with that trend continuing, coal would quickly overtake oil as the world’s fuel source of choice. (Read More: Global Carbon Dioxide Emissions — Facts and Figures)

The IEA is the energy advisory arm of the Organization for Economic Cooperation and Development (OECD), a group that oversees the economic activities of 34 industrialized nations, including Canada and the United States.

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A coalition of scientists in the United States has released a report suggesting that as many as 353 coal-fired electricity plants in the country should be retired due to their extreme age and general inability to compete with cheaper alternatives like natural gas and wind power.

Issued by a group called the Union of Concerned Scientists, the report targets a total of 59 gigawatts of electric power generating capability across the country, representing more than 6 percent of the total amount of electricity used by American citizens and businesses. The plants in question, each well-aged and operating past their 30 year lifespan, generate the bulk of the nation’s pollutants and greenhouse gases; with the costs of keeping them up to official standards taken into account, the report suggests that none are worth maintaining in the long run. (Read More: The Death of American Coal Producers — and a Potential Lifeline)

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But the West is still more reliant on coal for electricity than states in the East

A recent report by Western Resources Advocates, a Colorado-based resource and environmental policy organization, highlights the fact that, for the first time in 30 years, carbon dioxide emissions resulting from coal-fueled power generation in the Mountain West region of the United States are dropping.

While that fossil fuel still plays a major role in bringing power to the American West, the slow retirement of aging coal plants and their replacement with natural gas and renewable energy power generation has seen a major change in energy trends in the area, encompassing New Mexico, Nevada, Utah, Colorado and Wyoming. With more than 58 percent of electricity in the western half of the country still being produced by coal-fired plants compared to the national average of 42 percent, there is certainly still room for improvement, but the trend is heartening to those with an interest in alternative energy sources.

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The following article was written by Andrew Holland for Consumer Energy Report‘s free Energy Trends Insider newsletter.

Companies mentioned: Patriot Coal Corp. (NYSE:PCX); Peabody Energy Corp. (NYSE:BTU); Arch Coal Inc (NYSE:ACI); Alpha Natural Resources (NYSE:ANR)

Last Monday saw reports that Patriot Coal will seek bankruptcy protection. This pulled down the share prices of competitors like Peabody Energy, Arch Coal, and Alpha Natural Resources.

As much as the coal producers claim that this is because of an Obama Administration “War on Coal,” it’s more about market realities . As the price of natural gas has fallen to below $3.00 per MMBtu, due to the growth in domestic production of gas from the shale gas boom, it is mostly cheap gas that is undermining coal demand. Therefore, the coal industry should not expect the outcome in this year’s Presidential election to provide much relief.

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Who could have dreamed solving climate change would be so easy? A new paper in Environmental Research Letters called “Greenhouse gases, climate change and the transition from coal to low-carbon electricity” concludes that replacement of all of the world’s currently operating coal-fired power plants — which produce about 40% of the world’s electricity — and replacing them with renewable energy would have an impact of 0.2 degrees Celsius 100 years from now.

Cherry-Picking Conclusions According to One’s Viewpoint

However, a number of climate change websites took away a very different message than I took away from the paper. Here is Joe Romm’s view:

Bombshell: You Can’t Slow Projected Warming With Gas, You Need ‘Rapid and Massive Deployment’ of Zero-Carbon Power

I seem to recall another “bombshell” that he recently reported upon on the same theme: Natural Gas Bombshell: Switching From Coal to Gas Increases Warming for Decades, Has Minimal Benefit Even in 2100. I debunked that by showing that in that particular study, every possible alternative — including wind power, solar power, and even simply shutting down all of the coal plants — was projected to increase global warming in the short term: BOMBSHELL: Solar and Wind Power Would Speed Up, Not Reduce, Global Warming.

But Joe is back with the hyperbolic titles and exaggerations (which I get into below), and he missed the biggest story in the paper.
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The following is a guest post from Oilprice.com, republished with permission to R-Squared. For years many Germans warned that nuclear was the only way they could meet the energy needs of their population and reduce carbon emissions at the same time. Now that they have decided to shut down their nuclear plants, they are preparing to build new coal-fired power plants to help close the shortfall. The guest post below explains. —————————– On 30 May, in the aftermath of Japan’s Fukushima nuclear disaster, German Chancellor Angela Merkel announced that Germany would close all of its 18 nuclear power plants between 2015 and 2022, which produce about 28 percent of the country’s electricity. Eight have now been taken offline, and with… Continue»

Lessons Learned From a Recent Paper on Climate Change Actually, the lessons were learned from the media’s reporting — and the reactions to that reporting — of a recent paper on climate change. The paper I am talking about is a study by Tom Wigley, who is a senior research associate at the National Center for Atmospheric Research (NCAR). The title of the study is Coal to gas: The influence of methane leakage. To review, the study looked at the impact of replacing coal-fired power plants with natural gas-fired power plants. Natural gas emits far less carbon dioxide than coal per BTU of energy produced, and many therefore argue that natural gas is a good bridge fuel on the way… Continue»

Study: Coal-Fired Power Plants Emit Pollutants That Keep the Earth Cool (Note: I am amazed that I have to put such a disclaimer in here, but a note for the comprehension-impaired: This is not an article calling for more coal-fired power plants. It is an examination into how the media reported on a recent energy story). I had a tough time picking a good hyperbolic title for this one, because I had my choice of so many good ones. Last week a new study reported that replacing coal with natural gas might actually worsen climate change in the short term. The study was done by Tom Wigley, who is a senior research associate at the National Center for Atmospheric Research… Continue»