WSJ front-page shocker: U.S. Foresees a Thinner Cushion of Coal"
Okay, it isn’t a shock to long-time readers that the US Geological Survey sharply scaled back projections of economically-recoverable US coal (see “Are we approaching peak coal? Part 1” and “Part 2“). As I reported in January, the USGS concluded:
The coal reserves estimate for the Gillette coalfield is 10.1 billion short tons of coal (6 percent of the original resource total).
Although it didn’t get much media attention, this December report was a shocker because the USGS is highly credible and the Gillette field, within Wyoming’s Powder River Basin, “is the most prolific coalfield in the United States” and in 2006 provided “over 37 percent of the Nation’s total yearly production.”
But I think it’s a shocker that the Wall Street Journal finally makes it their front page story, “U.S. Foresees a Thinner Cushion of Coal.” The piece discusses the USGS survey – and facts on the ground:
Mining companies report they have to dig deeper and move more earth to extract coal from aging mines, driving up costs. Utilities have grown skittish about whether suppliers can ship promised coal on time. American Electric Power Co., the nation’s biggest coal buyer, says it has stepped up its due diligence to make sure its suppliers can make deliveries after some firms missed shipments last fall. It even bought a mine to lock down supplies.
“We are very much concerned, and it’s getting worse,” said Tim Light, senior vice president for AEP.
The WSJ has an important graph comparing coal production by region. And yes, the WSJ used the term “Peak Coal,” though perhaps “Peak Coal East of the Mississippi” might be more accurate.
Q: What happens if coal gets more expensive for Eastern and Southeastern utilities, because of the rising cost of Eastern coal and/or the transportation costs associated with Western coal (especially as peak oil drives prices back to record levels and beyond over the next several years)?
A: A bunch of good things from the perspective of trying to reduce greenhouse gas emissions at the lowest possible cost while jumpstarting the transition to a clean energy economy.
First, utilities would start using less coal and more natural gas – assuming affordable abundant natural gas is available, which now seems increasingly likely (see “Climate action game changer, Part 1: Is there a lot more natural gas than previously thought?“). I will discuss this fuel switching in more detail in Part 2 of the natural gas series.
Second, utilities, especially in the SE, start to realize coal isn’t the limitless cheap source of fuel they always thought, and so they start getting more serious about energy efficiency, which Duke already is (see here – and yes, I’m told this effort is for real).
Third, utilities look more seriously at clean energy options, of which the cheapest for most SE utilities is biomass (see “An intro to biomass cofiring“). In fact, this is already happening (see “Southern Company embraces the only practical and affordable way to ‘capture’ emissions at a coal plant today – run it on biomass” and “Another coal plant to be replaced by a ‘plant’ plant!“)
Fourth, the utility industry starts to realize that, as with oil, we need to get off of coal sooner rather than later not just because it is destroying a livable climate but because they ain’t making any more of it. It is unsustainable. Heck, maybe they realize that carbon capture and storage is not the panacea some people think (see “Is coal with carbon capture and storage a core climate solution?“) Okay, maybe they don’t.
But the bottom line is that prudent policy planners in the public and private sector can no longer blindly believe that we have unlimited, cheap coal.
The findings are percolating through the coal and power industries. “USGS made a leap forward with this study,” says Vic Svec, spokesman for Peabody Energy Resources, the U.S.’s biggest coal company. He adds that when his company plugs in prices as the USGS study did, it reaches similar conclusions….
After many decades of mining, some of the country’s coal fields are showing their age. “What’s left to mine is not as easy as what we mined even 10 or 20 years ago,” says Janine Orf, spokeswoman for Patriot Coal Corp. in St. Louis. “The seams are getting thinner and there are more limestone intrusions.”
And the rest of the world may be in the same situation:
The U.S. isn’t the only nation employing improved drilling data and computer modeling to reassess its supplies. Germany cut its proven hard-coal reserve estimates by more than 99% in 2004 as it explored reducing mining subsidies, which would make coal more expensive to extract. Overall, assessments of total world reserves dropped by half from 1980 to 2005, according to a study by Energy Watch Group, an independent group based in Germany.
Ironically – or tragically – there still appears to be enough coal to destroy a livable climate. Since we need to get off coal anyway, how about doing so two or three decades early and preventing centuries of misery and suffering for billions by preserving a livable climate?
The time to act is now.