How Coal Is Not Cheap and Why It Never Will Be Again
by Stacy Feldman - Jul 30th, 2008
Touting US coal as cheap and abundant is a favorite pastime of fans of coal expansion.
Want proof that it’s not true? Just look at this shocking new data from the Energy Information Administration on the costs of Appalachian coal, parsed here by Appalachian Voices.
It’s hard to know where to start: maybe that Central Appalachian coal, which accounts for roughly one-fifth of US coal production, has zoomed suddenly to nearly $140 ton. In 2007, prices were at $40 ton. That represents a jump of 350% in a single year.
Or maybe it’s the fact that despite record prices, production levels have dropped dramatically all over Appalachia during the past eight years. Take Central Appalachia. In June 2007, production was at 19.8 million tons. In June 2008, it sank to 18.8 million. Meanwhile, production in Virginia was down 17 percent compared to this time last year.
How come? The best and easiest-to-mine Appalachian coal reserves are exhausted, drained, tapped and sapped. Can't say we weren't warned:
Sufficient high-quality, thick, bituminous resources remain in [Appalachian Basin] coal beds and coal zones to last for the next one to two decades at current production.
U.S. Geological Survey, 2000
In any case, what’s utterly clear is that coal is no longer cheap and never will be again.
Remember this report by Innovest Strategic Value Advisers, the global experts on carbon risk? If you account for the coming federal regulation of carbon emissions, then investing in coal becomes a reckless financial gamble. Simple, really. Choose to build a new coal-fired plant and saddle ratepayers with costs that are sure to spiral out of control.
Still, there are 151 coal plants on the books in America, according to Architecture 2030. Don’t bother to find a silver lining in that figure, there isn’t one:
If built, the greenhouse gas (GHG) emissions from these plants will overwhelm and negate all current efforts to reverse global warming. With global reserves of oil predicted to run out in 40 years and natural gas in 60 years, the one fossil fuel positioned to push the planet beyond the tipping point of 450 ppm CO2, is coal.
But: Wind power is getting cheaper all the time, and breakthroughs in solar silicon technology are close -- and much, much more.
So, in the end, if economics -- and not politics alone -- can drive the new energy economy, then we should see a lot more investor and government money turn to clean energy, and a lot less of it to coal.
Question: How big is that if?
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Coal
Britain's coal reserves are not exhausted. The UK has proved coal reserves of around 220 million tonnes however total reserves could be well in excess of 1 billion tonnes. Most of this is steam coal.
The decline of the UK coal industry was a result in falling demand, not exhaustion.
Black Stuff
Primitive a**holes that we are, when given coal, we treated it as if it were wood, stuffed it in wood-stoves and burned it. The results were a bit better than wood, and since we had burned all the trees, and had found a replacement , we were happy with coal. The British found ways to make coal-gas and a myriad of products from coal, and managed to exhaust their coal reserves rather quickly. It took about as long as their "Empire' lasted. Americans are blessed with both, this knowledge, and a hell of a lot of coal! Hopefully they will find a way to exploit all the constituents of this rich resource, and waste none of it up chimneys! The C02 from coal is a huge valuable part of this resource. We just haven't figured out how to fully exploit it yet! As the price of oil, and all other resources, rise, we will try harder to make greater gains from coal, as a fuel and as a chemical part of other energy yielding processes. Rising prices of oil have stimulated the intelligentsia of America and enhanced their value. They must now prove that value by inventing the way to the new energy future.
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