Tumblr Icon RSS Icon

WSJ front-page shocker: “U.S. Foresees a Thinner Cushion of Coal,” warns rosy U.S. coal estimates “may be wildly overconfident”

Posted on

"WSJ front-page shocker: “U.S. Foresees a Thinner Cushion of Coal,” warns rosy U.S. coal estimates “may be wildly overconfident”"

Share:

google plus icon

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.

[u.s. coal production]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.

« »

23 Responses to WSJ front-page shocker: “U.S. Foresees a Thinner Cushion of Coal,” warns rosy U.S. coal estimates “may be wildly overconfident”

  1. K L Reddington says:

    “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”

    4 strawmen in that statement. Or more.

    Coal doesn’t make my climate unliveable. I suspect burning it at home then the soot would be nasty. We have plenty of coal and we enjoy the fishing in the strip mine pits. As an open minded realist, it seems to have a lot of advantages. Used to be many of the major oil companies had coal divisions.

  2. Matt says:

    Joe,

    “Prudent” policymakers haven’t thought coal was unlimited for quite some time!

  3. John Hollenberg says:

    > Coal doesn’t make my climate unliveable.

    It is a major source of atmospheric mercury pollution, not to mention the vast amounts of CO2 produced which will make your climate unlivable.

    > We have plenty of coal

    Who exactly is “we”? Seems you believe your assessment over that of the USGS.

    > it seems to have a lot of advantages

    The main advantage coal has had is that it was cheap (because the pollution it created wasn’t included in its price) and that it was plentiful. Looks like both of those statements will soon no longer be true.

  4. K L Reddington says:

    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)?

    Coal to liquid technology is used by SASOL, and (natural) gas to liquid technology is used by SASOL and PetroSA to produce liquid fuels.

    http://www.scienceinafrica.co.za/2007/october/coal.htm

    Exciting technology.

    USGS seems to be a drag in updating information.

    The brightest tallent always is recruited by industry. The third tier go into government jobs. I am a realist. If coal and petroleum were state owned industries, the outlook would be very bleak. Just check out russia.

  5. Steven Goddard says:

    We should immediately shut down all coal fired plants for one month, in order to prove to the Polar Bears that we really do care.

    The Human/Polar Bear rift has become intolerable.

  6. MarkB says:

    “Ironically — or tragically — there still appears to be enough coal to destroy a livable climate. ”

    If not coal, then oil shale. There are viable low carbon technologies to both, that also don’t result in events like this:

    http://en.wikipedia.org/wiki/Kingston_Fossil_Plant_coal_fly_ash_slurry_spill

    Let’s hope one day the fossil fuel lobbies release their stranglehold on certain politicians and we can develop an energy infrastructure that we will be proud to leave future generations.

  7. John Hollenberg says:

    Coal to liquid is a dead end, as Joe has already written about:

    http://climateprogress.org/2007/09/08/why-coal-to-liquid-is-a-dead-end/

  8. Richard L says:

    you might want to check the mercury content of the fish from those mine pits – yum.

  9. James Newberry says:

    Coal is a solid material resource whose perverse use as an energy resource occurs at a sustainable energy efficiency of zero. It is zero because it is not energy, it is matter. Further, if one were to insist that we conceive of this mined matter as energy, then its measurement of efficiency must go back to the source of conversion, photosynthesis. The global measurement of efficiency of terrestrial photosynthesis is approximately 0.5% and combustion of 30% efficiency times photosynthesis is 0.15%.

    It is time for global transformation of energy ecological economics. True prosperity will come from the health of clean, renewable and sustainable economic redevelopment.

  10. Konrad says:

    I feel that coal power should still be considered for the immediate future, especially if the waste co2 can be utilized in the production of algae based biofuels. It is worth checking out the progress that Sapphire Energy has made in this area. Their biofuel is superior to the ethanol produced in other crop based biofuel projects.

  11. hapa says:

    romm: “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”

    reddington: “4 strawmen in that statement. Or more.”

    ugh. here. read this short explanation of what a straw man argument is. then tell me how many you count in the paragraph.

    then check yourself. how much of what you’re learning right now are you learning from online forums and talk radio? because time will come that education doesn’t serve you well.

  12. Omega Centauri says:

    The one downside of having less, is that if CCS became technologically feasible concerns about running out of coal would argue against using it (since it requires more coal per KwHr with CCS). Ironically it could increase emissions. I also believe we may need to develop CCS -even if we never use it ourselves, exporting it to developing countries who are determined to use their coal resources so they don’t ruin the climate. Without abundant coal ourselves we may decide not to develop CCS. So unfortunately I think there are potential downsides.

    Of course we are talking about what nature has left for us, my wishes will not alter the amount available one bit.

  13. Jim Beacon says:

    Oops. Seems there’s a whole lot less practical coal reserves than we thought (or, more accurately, than the industry has been telling us all these years). Now we know why the Obama administration decided to approve the 24 permits to blow the tops off of the mountains in Appalachia. Not that it excuses such a heinous decision, but it throws a little more light on the question everyone has been asking of “how could they?”

  14. If we’re going to keep up with current energy consumption…do we have any other choice currently, other than to keep burning coal? We seem to think we’re technologically advanced, but are we? It’s 2009 and we’re still burning black gunk out of the ground (whether it’s coal or oil) for energy? Can’t we do better?

  15. Jay Alt says:

    KL Reddington writes:
    Coal to liquid technology is used by SASOL, and (natural) gas to liquid technology is used by SASOL and PetroSA to produce liquid fuels.

    [link omitted]

    Exciting technology.
    - – - – - – - -
    It can be much more exciting than you realize. The South African SASOL plant is the largest single source of CO2 on the face of the earth.

  16. Wonhyo says:

    The Oil Drum has an interesting hypothesis that we have to reserve some of our remaining fossil fuels to build up a self-sustaining renewable energy infrastructure:

    http://anz.theoildrum.com/node/5457

    This should not be a surprise to CP readers, but the time frame is pretty urgent. TOD estimates oil will have zero net energy by 2019 and the other three fuel sources (coal, gas, uranium) by 2051-2053. The latest USGS study seems to confirm the urgency of the coal situation, adding to peak oil.

    TOD, using Australia as a case study, estimates that 9% of GDP must be devoted to building up a renewable energy infrastructure, if Australia is to successfully replace fossil fuels with renewables before fossil fuels run out. Failure is a one-way street, because once fossil fuels run out, we will not have the energy to build a renewable infrastructure.

    I’d like to see someone apply this analysis to the U.S. What percentage of our GDP do we need to devote to renewable energy development to beat the zero net return on fossil fuel?

  17. SecularAnimist says:

    “K L Reddington” wrote: “We have plenty of coal and we enjoy the fishing in the strip mine pits.”

    Whoever you are, it is not nice to steal Mr. Reddington’s handle and use it to post insultingly stupid comments in his name. If you want to parody the inanities of so-called “conservatives” that’s fine, but make up your own handle.

  18. Rick Covert says:

    I made this point several months ago with one of the good folks over at the cleanmpg.com website that coal reserves have been deeply discounted and he went into total denial mode. He told me that all we needed to do was wait until the price of coal went up then that coal would be economically viable. I reminded him that the US economy was built and grew exponentially on the availability of cheap energy, namely coal and oil, but he would not budge. I even mentioned the new projects being planned with Concentrated Solar Thermal and he again thought it was a flight of fancy like IGCC plants. Even providing links to current working CSP would not convice him. He believed that a carbon cap and trade system would raise his electric bills $130 more per month.

    That is where some people are that in face of all evidence they want to do more of the same. Isn’t that the definition of insanity?

  19. David B. Benson says:

    Check David Rutledge’s essay on Peak Coal over on TheOilDrum. Don’t recall what he gets. 600 ppm CO2 max?

    If so, fairly bad. :-(

  20. darth says:

    Check out the comments on the WSJ page – mostly deniers and nuke industry shills. Mostly along the lines of “if those pesky environmentalists went away, we could mine all the coal and burn it as dirty as we need to – and build tons of nukes as well”

    Oh yes and the usual “warming is natural, CO2 increase follows temp increase and the last 10 years have been cooling”. We still have a long way to go to convince people.

  21. Omega Centauri says:

    This study (according to some of the good folks over at the oildrum) assumed that coal could only be mined profitably at current market prices. Unfortunately if prices rise, the amount of available coal goes up. Also it only covers bituminous coal, not the lower quality brown coal. Also there are other technologies, such as coal to gas, which have been proposed for deposits too deep to mine. I don’t think we are out of the woods yet.

  22. John Hollenberg says:

    > Check David Rutledge’s essay on Peak Coal over on TheOilDrum. Don’t recall what he gets. 600 ppm CO2 max?

    No, he gets 460 ppm in 2070. Here is the link:

    http://www.theoildrum.com/node/2697#more

  23. John Hollenberg says:

    One other aspect of how “safe” coal is–coal ash is considered so toxic that:

    “the Department of Homeland Security has told Sen. Barbara Boxer (D-Calif.) that her committee can’t publicly disclose the location of coal ash dumps across the country”.

    http://www.huffingtonpost.com/2009/06/12/coal-ash-spills-too-dange_n_214739.html