Coal and Climate Change: An Opportunity for U.S. Technology Leadership

Posted on June 19, 2017 by William Brownell

It’s been a rough decade for coal in the United States. The advent of hydraulic fracturing in shale formations made natural gas plentiful and cheap. Concern over climate change fueled scores of new policies intended to accelerate growth in renewables and push aging coal units off the grid. U.S. coal consumption peaked in 2007, declining approximately 30 percent by 2015. A year later, five of the largest coal companies in the United States declared bankruptcy.

But it was a pretty good decade for coal in the rest of the world. Coal consumption grew by nearly 50 percent in China, which in 2013 was consuming nearly as much coal as the rest of the world combined. India similarly saw its coal use nearly double over the past ten years. This demonstrated a broader trend around the world: the top 20 coal-using nations were burning 23 percent more coal by 2015 than in 2005. 

If there’s been a war on coal, from a global perspective, coal is winning – and it hasn’t been close. As Charles Mann wrote in Wired in 2014: “In fact, a lump of coal is a thoroughly ubiquitous 21st-century artifact, as much an emblem of our time as the iPhone.”

Any discussion about coal, of course, is inextricably tied to questions about climate policy, with its most ardent proponents looking not just to reduce emissions of carbon dioxide and other greenhouse gases, but to eliminate fossil fuels altogether. And indeed, by the end of 2015, it looked as though climate policies, and a combination of other factors, would bend the curve of global coal consumption downward, with natural gas generating more electricity than coal for the first time in history.  That year global coal consumption fell 1.8 percent – the largest decline, in absolute terms, since the International Energy Agency (IEA) began keeping records in 1971. Reductions in the United States (-12.7 percent) and China     (-1.5 percent) were offset by modest increases in India (+4.8 percent) and Indonesia (+15 percent). Coal’s share of global primary energy consumption was at 29.2 percent – its lowest level since 2005.

But this did not stop the U.S. Energy Information Agency (EIA), in its 2016 Outlook Reference Case, from  projecting that coal would remain “the second-largest energy source worldwide – behind petroleum and other liquids – until 2030.” From 2030 through 2040, the EIA projected coal to remain the third-largest energy source, behind both liquid fuels and natural gas. Heralding coal’s demise seems premature. 

Against this background, I argued in 2014 with my colleague Scott Stone in a paper published by the Atlantic Council, that the United States has the potential to demonstrate meaningful leadership in the further development and broader deployment of advanced fossil energy technologies.  Clearly, industry has risen to the technology challenge when it comes to conventional air pollutants:  since 1970, coal use in the United States increased by more than 173 percent while emissions of sulfur dioxide, particulate matter, and other air pollutants declined by approximately 90 percent.  The same could prove true for carbon dioxide, but only if we move away from policy approaches that are disconnected from the financial and regulatory landscapes needed to build clean coal technologies at meaningful scales.

For starters, the disparity between the financial resources invested in “clean tech” and in CO2 capture technologies could not be greater. The International Energy Agency (IEA) has reported that between 2004 and 2012, around $20 billion was invested in CO2 capture, against $1.6 trillion for all other “clean” energy technologies. This clean tech investment is important and should continue.  Nevertheless, it is worthwhile noting that, over this time, global GHG emissions only continued to increase – a trend expected to continue for the foreseeable future.

Technologies are developing to ensure coal can be utilized in a manner consistent with stringent environmental standards, including for CO2. And indeed, the United States harbors legions of highly trained engineers who know more about building and operating state-of-the-art coal plants than virtually anywhere else on the planet.

This is important for the security and the reliability of the U.S. energy system. But it is equally important for the rest of the world. Outside the United States, there are many regions where natural gas is not cheap, nuclear is not available, and renewables are insufficient. These regions will look to coal to alleviate energy poverty and grow their economies, just as the United States did over the past century and China and India have done over the past half-century.  The question is not whether these regions will build new coal plants. They will. The question is whether they will build them with the technologies of yesterday or the technologies of tomorrow.

Here is where the United States can lead – on coal, technology, and climate.   



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