In the United States, coal is facing hard times. The welcome, though unexpected expansion of unconventional natural gas resources and production in North America has made natural gas the economically attractive fuel choice for new electricity generating power plants and, in many cases, has replaced older existing coal fired plants. From 2003 to 2013 coal’s share of electricity generation has fallen from about 50% to 40%, while natural gas’s share has increased from 17% to 27%. Between 2007 and 2012, the U.S. Energy Information Administration (EIA) reports that coal consumption in the U.S. fell about 20%; coal production fell only 11% during this period due to a significant increase in net exports. President Obama’s Climate Action Plan has directed the U.S. Environmental Protection Agency (EPA) to adopt regulations to reduce CO2 emission and will further reduce further coal’s share of U.S. electricity generation.
The situation and prospects for coal in the rest of the world are quite different. The U.S. EIA reports that worldwide coal consumption increased about 45% from 2003 to 2013 and coal consumption is projected to increase an additional 44% by 2040. Between 2010 and 2040 coal will continue to contribute about 45% of annual global greenhouse gas emissions. These data underlie the widely held view that if there is any chance of avoiding climate change, something must be done to reduce CO2 emissions from coal combustion.
One option is a sharp reduction in coal use. This is unlikely for several reasons. Coal costs US$1 to $2 per MMBUT, which in many countries makes it the economic choice for electricity generation and industrial use. It is a domestic resource that creates jobs from its production and distribution despite adverse environmental and safety characteristics. Several of the largest coal producing countries — China, India, South Africa, India and Russia — have massive investment in their coal industry and it would take many years and enormous investment to shift to alternative fuels. These countries have significant internal social needs that make it unlikely that they will be willing to spend public resources to reduce their reliance on coal. Nor is there any likelihood in these stringent financial times that OECD countries, which have been responsible for the build-up of the atmospheric inventory of greenhouse gases, will be willing to pay any appreciable fraction of the costs to enable the large emerging economies to move away from coal.
The alternative is to adopt carbon capture and sequestration, (CCS) technology that permits burning coal with significantly less emissions. CCS adds process equipment to generating plants that captures the CO2 product of combustion, compresses the CO2 and transports it by pipeline to a storage site where it can be injected and permanently stored in a deep saline aquifer. CCS adds between 30 and 50% to the wholesale cost of coal‐generated electricity. In 2007, MIT’s The Future of Coal study laid out the actions needed to establish CCS as a credible technology option: firstly the construction and operation of several demonstration projects at the scale of 1 million metric tons per year that would establish the technical performance, cost, and environmental impacts of alternative CCS technologies; secondly crafting a comprehensive regulatory framework to cover all aspects of CO2 storage: site selection, injection, and long-term liability for accidents and leakage at the site; and thirdly establishing modeling, monitoring, and verification systems to follow, measure, and control the injected CO2. Despite years of discussion, there are few credible projects planned or underway worldwide and more projects have been cancelled than initiated over the past five years. Demonstrating CCS technology is important when one realizes that a 1000MW coal plant emits up to 20,000 tons of CO2 per day, and several hundred storage sites handling huge daily volumes are necessary to make significant impact on reducing coal emissions.
The lack of progress on CCS as a technology option that convinces investors and the public is especially awkward for the draft regulations the EPA has issued to limit CO2 emission from new coal generating plants. The Clean Air Act requires a new source performance standard to identify a “practically demonstrated alternative control technology,” and the draft EPA regulations identify CCS as such a demonstrated technology. Investors, utilities, technical experts, and many environmentalists doubt that CCS has been “practically demonstrated” because of the absence of extended field experience with CO2 storage sites that have been sited, constructed, and operated according within a regulatory framework that increases the chance of necessary public acceptability.
If the world does not have a practical solution for clean coal, which is the case today, there is no possibility that a mitigation strategy of reducing greenhouse gas emissions to avoid climate change will succeed. Therefore, more attention should be devoted to developing a strategy of how best to adapt to a world experiencing global warming.
John Deutch is an emeritus Institute Professor at the Massachusetts Institute of Technology. Mr. Deutch has served in significant government posts throughout his career, including Director of Energy Research and Undersecretary of the U.S. Department of Energy, Undersecretary and Deputy Secretary of Defense, and Director of Central Intelligence.
Republished with permission from Global Energy Affairs
