Long live King Coal
By Robert Bryce
Published: Tuesday, July 31, 2012, 8:57 p.m.
Updated: Tuesday, February 19, 2013
Standing in the dispatch office of the North Antelope Rochelle Mine near Gillette, Wyo., Scott Durgin pointed at a flat-panel display. The regional vice president for Peabody Energy smiled. The most productive coal mine in the world was on target. Since midnight, about one train an hour had been loaded, each carrying about 16,000 tons of coal.
I asked Durgin how long Peabody could continue mining in the region. Easily for five more decades, he replied.
But the Peabody mine, along with the about 1,300 other coal mines in the United States, is being threatened. The Environmental Protection Agency has proposed a rule that, if enacted, would in effect outlaw the construction of new coal-fired power plants in the United States. The EPA's motives are clear: It wants to shut down coal plants, which emit carbon dioxide.
The EPA and the Obama administration know their attack on coal is little more than a token gesture. The rest of the world will continue to burn coal — and lots of it.
U.S. policymakers are mostly focused on carbon dioxide. The proposed EPA rule would cap the amount of carbon dioxide that new electricity-generation units could emit at 1,000 pounds per megawatt-hour. Absent “carbon capture and storage,” a process that isn't commercially viable, that standard will rule out coal-fired units, which emit about 1,800 pounds of carbon dioxide per megawatt-hour.
Prohibiting new coal-fired power plants may please President Obama's domestic supporters, but it would leave global coal demand and emissions almost unchanged. Indeed, over the last decade, even if carbon dioxide emissions in the U.S. had fallen to zero, global emissions still would have increased.
Over the last decade, global coal consumption has increased by more than the growth in oil, natural gas and hydro and nuclear power combined.
Coal is helping meet the world's electricity demands for a simple reason: It's cheap, thanks to the fact that deposits are abundant, widely dispersed, easily mined and not controlled by any OPEC-like cartels. According to the U.S. Department of Energy, from 1999 through 2010, coal cost about half as much per BTU as the next cheapest fuel, natural gas.
And coal will continue to be a low-cost option. ExxonMobil predicts that in 2030, the cheapest form of electricity production will remain coal-fired generation units, with a total cost of about $0.06 per kilowatt-hour, less than the cost of electricity produced by natural gas, nuclear, wind or solar photovoltaic panels.
Low cost isn't the only reason for coal's dominance. Another is “power density,” a measure of the energy flow that can be harnessed from a given area of land. Let's return to the North Antelope Rochelle Mine. Once you account for the energy lost during the conversion of coal to electricity, the mine yields the equivalent of about 300,000 barrels of oil a day.
Since the days of Thomas Edison, the United States has relied on abundant supplies of domestic coal to produce electricity, the currency of modernity. Given the world's insatiable demand for electricity, it's obvious that coal will be powering the global economy for decades to come.
Robert Bryce is a senior fellow at the Center for Energy Policy and the Environment at the Manhattan Institute.
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