The Coal Train Steams Forward

“But for all of the jousting here at home over natural gas exports and the virtues (or lack thereof) of renewable energy, the global energy story of today is coal.”

The shale revolution has fundamentally changed the American energy scene. Over the last five years or so, domestic production of oil and gas have soared. And some analysts are claiming that the US oil production could soon surpass that of Saudi Arabia.

As the shale gale rumbles forward, the usual battles over renewable energy are continuing. At the state level, policymakers and lobby groups continue tussling over renewable portfolio standards. At the federal level, the White House continues its mindless support for the corn ethanol scam and Congress continues debating subsidies for wind and solar.

But for all of the jousting here at home over natural gas exports and the virtues (or lack thereof) of renewable energy, the global energy story of today is coal.

 The latest example of that: On Monday, energy consulting firm Wood Mackenzie projected that China will fall far short of its plans to build 200 gigawatts of new nuclear capacity by 2030. The result: coal will continue its dominant role in China’s electricity generation sector and will account for about 64 percent of the country’s electricity production by 2030. Wood Mackenzie expects that will translate into additional Chinese coal demand of 55 million tons per year by 2030.

Indeed, the soaring use of coal exposes the provincialism – or maybe it’s the willful ignorance — of US policymakers and environmental groups when it comes to the issue of climate change. Back in March, Senate Democrats held an all-night climate-change talkathon.

The Democrats’ all-nighter, which was quarterbacked by Rhode Island’s Sheldon Whitehouse and the newly formed Senate Climate Action Task Force, kept the Senate open for only the 35th all-night session since 1915. It gained coverage from all the major media outlets. During the tag-team filibuster, Al Franken of Minnesota said “we don’t need to just talk, we need to take action.”

Franken’s fellow Democrats provided similar sound bites. Connecticut’s Richard Blumenthal declared that climate change is “implacable, relentless and only we can stop it.” But the senators offered no specific plans — nor even any hints — as to what they might propose. There was no talk of carbon taxes, carbon-emission limits, or cap-and-trade.

The Democrats avoided concrete proposals because if they were candid (or perhaps, even moderately informed), they would have had to acknowledge the ongoing boom in global coal use. And that booming coal use is a direct reflection of the world’s hunger for electricity.

I have a chapter on coal in my upcoming book, Smaller Faster Lighter Denser Cheaper: How Innovation Keeps Proving the Catastrophists Wrong. (It will be published on May 13.) And to be perfectly candid, the coal boom is problematic for the thesis of my book. The black fuel’s persistence in our energy mix both beggars and confirms my thesis.

At a time when nearly everything in modern society is getting Smaller Faster Lighter Denser Cheaper, coal — a bulky, heavy fuel that’s more identified with the 19^th century than the 21^st — remains a remarkably resilient source of energy. Coal may be bulky and heavy, but it’s an excellent fuel for creating electrons, and few things are Smaller Faster Lighter than electrons. (Electricity travels at about the speed of light, which is roughly 1 billion kilometers — 670 million miles — per hour.) Oil and natural gas are vastly superior in terms of their hydrogen-to-carbon ratios. For instance, diesel fuel contains about 60 percent more energy per kilogram as the best black coal; natural gas has about 90 percent more.

But coal – stubborn old coal, a fuel that’s been used by humans for millennia, and now accounts for about 40 percent of all global electricity production — enables innovation.  Without cheap, abundant, reliable supplies of electricity produced from coal, the ongoing revolution in information technology, as well as the age of biotech and nanotech simply wouldn’t be possible. Electricity accelerates the trend toward objects and systems that are Smaller Faster Lighter Denser Cheaper.

The essentiality of electricity to modernity is incontrovertible. Countries that have cheap, abundant, reliable supplies of electricity are able to bring their people out of darkness and poverty and into the light of the modern world. And from India and China to Vietnam and Indonesia, the fuel that’s supplying the vast majority of that electricity is coal.

Indeed, between 2002 and 2012, coal use in China grew by about 23 million barrels of oil equivalent per day. For comparison, in 2012, coal consumption in the U.S. was about 8.8 million barrels of oil equivalent per day. Thus, between 2002 and 2012, just the growth in China’s coal consumption was equal to more than 2.5 times the amount of coal burned in the U.S. in 2012.

But coal use isn’t just growing in China. In 2012, according to the BP’s 2013 Statistical Review of World Energy, coal use in both Spain and the UK jumped by 24 percent over 2011 levels. In France, coal consumption rose 20 percent; in the Netherlands, by 8 percent; and in Germany, by about 4 percent. On March 10 this year, the same day that the Democrats ended their all-night focus on climate, Maria van der Hoeven, the head of the International Energy Agency, said that coal use in Europe is rising because natural “gas prices are high” and “coal is cheap.”

I laughed the other day when Paul Krugman, a columnist for the New York Times, published a piece titled “Salvation Gets Cheap.” In the April 18 piece, Krugman extolled the plummeting price of solar-photovoltaic panels and claimed that thanks to the falling price of solar, “drastic cuts in greenhouse gas emissions are now within fairly easy reach.”

A more absurd claim is difficult to conjure. Solar prices are falling. But cheaper solar panels won’t lead to major cuts in global carbon dioxide emissions because solar’s contribution to global energy consumption is infinitesimally small. Between 2007 and 2012 – the same period during which solar capacity grew ten-fold to about 100,000 megawatts — global coal consumption jumped by more than 10 million barrels of oil equivalent per day. Meanwhile, in 2012, the contribution of global solar production was roughly 400,000 barrels of oil equivalent per day.

Put another way, over the past half decade or so, just the growth in coal use is equal to about 25 times the contribution now being made by all of the world’s solar projects. And the coal-fired power plants that have been built over the past few years are likely to run for decades.

To be clear, the boom in coal use is not new. Since 1973, the growth in coal consumption has outstripped the growth in both natural gas and oil. (Between 1973 and 2012, global coal use increased by 43.6 million barrels of oil equivalent per day. Natural gas use increased by 39 million barrels of oil equivalent per day and oil use jumped by 34 million barrels per day.) Coal has become the fuel of choice for electricity generation because it is cheap, abundant, deposits are geographically widespread, and the market for the fuel is not affected by any OPEC-like entities.

The punch line here is so clear even Ray Charles could have seen it: while we remain obsessed with so-called “clean” energy here in the US, the rest of the world is rushing to produce electricity from the cheapest fuel they can find. And that fuel continues to be coal. Unless or until someone can come up with a new source of energy that can compete with coal on cost, the black fuel will continue to dominate the electricity-generation business.

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Robert Bryce is a senior fellow at the Manhattan Institute. His fifth book, Smaller Faster Lighter Denser Cheaper: How Innovation Keeps Proving the Catastrophists Wrong, will be published next week (May 13th).