Affording Coal

By Mike Robinson, RSGS Chief Executive. This article first appeared in the summer 2014 edition of the RSGS's magazine, The Geographer.

Global energy is changing. Energy usage has trebled in the last 50 years, importing nations are becoming exporters, and whilst oil remains the largest source of primary energy in the world, its persistently high price has opened up the viability of a range of alternative energy types.

However, fossil fuels still dominate the global energy mix, providing more than 85% of global energy, and of these it is coal that has seen the fastest-growing demand of all. In a recent global review, the International Energy Agency (IEA) stated that there was the equivalent of 142 years of proven reserves of coal at current consumption rates (compared with 61 years of proven reserves of natural gas and only 54 years of oil). The World Coal Association, an industry representative group, further claims that the remaining recoverable resources of coal are more than 20 times larger. Of course, these estimates are based on current usage, and only a small increase in annual demand could cut the number of years significantly. For example, if coal saw even a 5% per annum growth, reserves would fall from 142 years to c45 years.

So, coal is the fastest-growing energy source. It is effective. There’s still a lot of it. And it is also relatively cheap. Sounds great. But coal has a problem. It is not called ‘dirty coal’ for nothing and, along with its immediate health and environmental impacts, coal has the highest carbon content (and therefore the highest carbon emissions) of any fossil fuel. In 2011, coal produced about 30% of global energy use, but accounted for around 44% of global carbon dioxide emissions; and historically it is responsible for more global emissions than any other fuel source.

As IEA Executive Director Maria van der Houven stated recently, “Irrespective of its economic benefits for the countries, the environmental impact of coal use, especially that coming from carbon dioxide emissions, should not be overlooked.”

Being the most available fossil fuel, and the cheapest, it is unlikely that people, companies and nations are going to be successfully persuaded to give it up, even though many of its damaging costs are ‘externalised’. Poland, for example, which hosted a recent round of IPCC climate negotiations (and simultaneously ran a major coal conference in the nextdoor stadium), uses coal almost exclusively (85% of electricity production) and is not going to give up its own energy security just for the climate without a very significant incentive.

The Obama administration unveiled historic environmental rules in June to cut carbon pollution from power plants by 30% – the first time any president has moved to regulate this carbon pollution – in large part by targeting reductions in coal use. The only hope for the climate in relation to coal, other than simply cutting our use of coal dramatically, is to find a way to capture some of the fossil fuel emissions from burning coal and store them somewhere where they can’t ‘leak’ or seep out into the atmosphere. This process of carbon capture and storage (CCS) is yet to be tested at any significant scale, and will cost significant money and energy to implement.

However, whilst CCS is only a partial solution (potentially reducing coal’s carbon emissions to those of natural gas), it feels increasingly more necessary. Even in the UK, where no new coal-fired power stations have been built for years, 39% of our electricity comes from coal-fired plants. So despite CCS remaining an uncertain technology, domestically and globally we probably need to see CCS developed successfully if we are going to keep burning coal and want to maximise our chances of avoiding dangerous climate change.

However, whether CCS works or not, we need to try to limit our use of coal. Several of the proposed key steps to reducing global carbon emissions include replacing coal with gas power, replacing coal with wind, or replacing coal with nuclear power. All of these would make major inroads to global emissions. Coal is fairly evidently a fossil fuel that we cannot ultimately afford, except in moderation.

This is, in part, what drives the development of renewable energy sources. The IEA reported last year that “global subsidies to renewables reached $101 billion in 2012, up 11% on 2011, and need to expand to $220 billion in 2035”. However, it is worth noting that the same body estimated that fossil fuel subsidies increased to $544 billion in 2012.

If we are going to solve the conundrum of how to achieve energy security, environmental sustainability, and economic prosperity simultaneously, we need to see some of this fossil fuel subsidy directed towards renewables and perhaps the development of CCS. However, CCS is a costly technology and if coal has to start paying for its environmental damage and other externalities like the cost of CCS, it no longer looks so economically attractive, which is why many commentators believe the fossil fuel subsidies would be better spent purely on renewable alternatives.