Social benefits of carbon outweigh costs at least 50 times, according to new coal industry report. But even coal's friends say it should push to clean up its fuel.
Instead of pushing into the future, the embattled US coal industry has reached into the past with a new public relations assault, emphasizing how its product powered the Industrial Revolution and can do the same for today’s emerging nations.
The pitch: The economic and social benefits flowing from fossil fuels over the past two centuries – a doubling of life expectancy and 11-fold rise in incomes – outweigh any potential environmental costs from climate change. It’s no contest, according to the industry’s calculation: $36/ton social costs vs. benefits worth 50 to 500 times that amount.
The problem: Those social and economic strides could be made using other, less carbon-heavy fuels. Criticism of the industry is coming not just from environmentalists, but also from those who want to see the industry succeed by aggressively finding new and cleaner ways to use coal. These range from retiring Sen. Jay Rockefeller (D) of West Virginia to US utilities that are shuttering coal units and moving to other fuels.
As it is, the industry is growing mostly because of the momentum of development in emerging nations.
Take China. It has committed to increasing its use of alternative fuel sources and to cutting the amount of heat-trapping emissions that it creates. But it has said that it needs Western financial help to afford modern pollution control technologies. Meanwhile, it's growing so fast and needs power so soon that over the next four years it is expected to build 160 new coal facilities, on top of the 620 it has now.
That need for power is endemic throughout much of the developing world. The United Nations says that 1.4 billion people do not have any electricity, most of whom live in Asia and sub-Saharan Africa. Based on current population trends, it says that 15 percent of the world’s population will continue to lack such access in 2030.
Their path to prosperity, undoubtedly, begins with electrification – the ability of countries to obtain reliable power sources so that goods and services can be produced and then transported. The coal industry argues that it can provide that power, cheaply and reliably – a benefit that outweighs any environmental costs from climate change.
“Billions of people are living in abject poverty and they don’t have access to electricity,’ says Roger Bezdek, president of Virginia-based Management Information Services and author of a new report sponsored by the American Coalition for Clean Coal Electricity. “Those are the people we need to be concerned about and they need affordable and reliable power sources.”
Global coal consumption will increase by 25 percent by 2020 – to 4.5 billion short tons of oil equivalent, says Mr. Bezdek, citing a Wood Mackenzie report. Its prominence, not unexpectedly, will escalate in Asia and in Africa, where developing countries are planning a host of new coal-burning facilities.
Also, he points out, coal-related pollution in the US has been reduced by nearly 90 percent since the 1970s as the industry has invested $130 billion in emissions controls and processes. Of course, such investments were driven by federal environmental regulations, which the coal industry routinely fought. It is currently fighting proposed rules for regulating carbon-dioxide emissions under the Clean Air Act, which would force current coal plants to be as clean as combined cycle natural gas plants. The reason for the industry's opposition, Bezdek says, is that in many cases the costs of doing so are too high and the tools to capture and bury CO2 are not yet commercial.
US power companies are moving away from coal. Consider Duke Energy: It will be retiring about 50 older coal units totaling almost 7,000 megawatts (MWs), because it makes no economic sense to put pollution controls on them. To help replace that generation, it is building two natural gas combined cycle plants in the Carolinas; in 2013, it also fired up a 618 MW coal-gasification facility in Indiana. That plant took an existing 160 megawatt coal plant and converted it – a $3.5 billion public-private effort.
“We have chosen to build this integrated coal gasification technology because this is a more acceptable way to burn coal,” says Lew Middleton, spokesperson for Duke Indiana.
The coal industry might be better advised to pursue a technological course – investing the necessary monies in pollution control equipment. says Sen. Jay Rockefeller (D) of West Virginia, in a floor speech in 2012. “It’s not too late for the coal industry to step up and lead by embracing the realities of today and creating a sustainable future. We need a bold partner, innovation and major public and private investments.”
Actually, coal can make more strides in reducing CO2 emissions, according to the industry's own Coal Utilization Research Council and the Electric Power Research Institute. Their technology road map estimates the cost of carbon capture and sequestration technologies can fall by 30 to 40 percent by 2025. The road map suggests that $400 million to $500 million be invested each year through 2025. Of that, 80 percent should come from the government and 20 percent from private industry, which it says comprises the typical cost-sharing arrangement. The document goes on to say that federal research and development on coal has returned $13 for every $1 invested.
“By combining the technology advances identified in this report with opportunities for beneficial use of captured CO2, such as enhanced oil recovery, tomorrow’s coal-based power plants equipped with CO2 capture technology can emit comparable or less CO2 at electricity costs equal to, or less than, today’s power generation plants that use fossil fuels, including natural gas,” says the road map.
But those aspirations appear to be at least a decade away. For now, competitive alternatives exist, which may explain why the environmentally and economically challenged coal industry is politically undeterred at home – and casting an eager eye on emerging markets abroad.