December 1, 2022 - President Biden said recently that “we’re going to be shutting [coal] plants down all across America and having wind and solar.” West Virginia’s Democrat Senator Joe Manchin, representing a state that gets 90% of its electricity from coal, scathingly called Biden’s comments “outrageous … offensive and disgusting” which “ignore the severe economic pain the American people are feeling because of rising energy costs”. Senator Manchin had extended legislative support for President Biden’s so-called “Inflation Reduction Act”, laden with pork for wind and solar, in return for a “nebulous ‘deal’ with Senate Majority Leader Chuck Schumer and Speaker of the House Nancy Pelosi to pursue the passage of language designed to streamline federal energy permitting processes”.
But the bottom line remains in Senator Manchin’s favor, even if he was played by the Democrat establishment: King Coal is making a comeback all around the world. West Virginia’s coal miners may well lose their livelihoods to the renewable energy diktats of the progressive Green Democrats in charge at Washington D.C. but King Coal runs supreme where it matters. After decades of energy policies in the West which sought to eliminate coal use in the global economy, it seems that King Coal is living through a 2nd Renaissance.
An Early Colliery Locomotive', circa 1930. From 'The Splendid Book of Locomotives', by C. Gibbard
Asia Leads: Making A Comeback
Obituaries for coal have been announced ad nauseam, most recently at last year’s UN climate change COP26 summit in Edinburgh. Yet we saw the eight-fold price surge in coal since September 2020 to over $430 per ton two years later from prices that ranged between $50 - $150 a ton through the past decade. This was led by a resurgence of demand after the pandemic lockdowns – especially in China and India, the world’s two largest coal consumers accounting for two-thirds of the world total — but also in Japan, South Korea, Europe and the US.
According to the BP statistical review, global electricity demand, which grew at an average of 2.5% in the decade to 2021, expanded by 6.2% in 2021. In Asia, electricity demand grew even faster at 8.4%. Global coal power generation, the world’s biggest fuel source of electricity, set a record in 2021. While it grew at 1.2% annually over the past decade, it surged by 8.8% in 2021 over the previous year. The trends suggest that coal will be enjoying at least a few more bumper years yet.
After droughts and heatwaves led to power shortages in China and India last year, both countries have accelerated the building of coal mining and coal power generating plants despite climate policy ‘commitments’ for attaining net zero emission targets by 2060 and 2070 respectively. China is expected to approve 270GW of new coal power plants by 2025, larger than the entire US coal fleet. At the COP27 summit in Sharm El Sheikh, Egypt, India’s coal minister Pralhad Joshi said that coal will play an important role “until at least 2040 and beyond”. He continued, “Thus, no transition away from coal is happening in the foreseeable future in India”.
At last year’s COP26 summit in Glasgow, it was no surprise that India, China and several other developing countries created a last-minute objection to language that called for the “phase out” of coal. To the emotional regret expressed by a tearful Alok Sharma, host and President of COP26, the final text of the Glasgow Agreement called only for the “phase down” of coal. At the COP27 negotiations just concluded in Sharm El Sheikh, India demanded that coal not be “singled out” in the final agreement and that “all fossil fuels” be treated as equals.
It is apparent that neither China nor India – in common with many other developing countries dependent on coal — will compromise on energy security and economic growth objectives, least of all during globally turbulent times in the wake of the pandemic lockdowns and the Russia-Ukraine war.
Europe Lags: Back To The Past
While the juggernaut of Asian coal demand will roll on for a few more decades at least, coal’s comeback is even more remarkable in Europe. This is the same Green Europe that boasted of its dismantling of coal and nuclear power plants while imposing financial embargoes on multi-lateral development agencies such as the World Bank and the International Monetary Fund for fossil fuel development in developing countries.
Let’s start with Germany, the epicenter of Green Europe. Among the more recent energy news headlines in that country is this one: “Germany dismantles wind farm to expand coal mine”. And another one is on “Germany Re-Opens Five Lignite-Fired Power Plants”. Readers might note that lignite coal is about the dirtiest form of fossil fuel to generate electricity from, but we live in strange times.
At the end of June, Chancellor Olaf Scholz's coalition gave the green light to restart 27 coal-fired power plants until March 2024. That is quite a turnaround for a country that shunned all fossil fuels for the last three decades, shutting down its nuclear plants after the Fukushima incident as well as its coal and natural gas plants for their high carbon footprints.
Heavy dependence on Russian piped natural gas prior to the Russian sanctions — up to 60% of total gas demand — did not register on Germany’s “carbon sin” audit books, so that was fine. So long as Germany was not dependent on European-origin fossil fuels – God forbid depending on your own fracked gas or on North Sea oil and gas – it passed the “fighting climate change” virtue test. But Russian gas supplies progressively shrunk, as the EU sanctioned itself from Russian gas after President Putin ordered Russian tanks into Ukraine in late February. First were the blockages by Gazprom, on some technical ground or another, and then the sabotage of both Nordstream pipelines in mid-October which led to a de facto cutoff of Germany and Europe from the bulk of Russian gas supplies.
While unsuccessfully seeking quick replacements of natural gas imports from Canada to Qatar, Germany faces the prospects of a winter with mandatory gas rationing for households, even planning for fuelwood for home heating. It is already witnessing the decimation of German energy-intensive industry from petrochemicals to wood, paper, glass, aluminum and steel.
In the EU, Austria, France, Italy and the Netherlands have announced plans to extend or restart coal power plants to survive winter. Like Germany, these countries see the move back to coal as “temporary”, to avoid blackouts, unemployment and mass unrests during winter as recession strikes. Putting a fig leaf on the energy crisis brought about by Europe’s quixotic green policies, an energy analyst at the European think tank Bruegel cast this choice as “very occasional, for one or two winters at the most, and in small doses.” Yet it is hardly plausible to suggest that Europe’s energy crisis will be sorted out in a couple of years: the Financial Times, for instance, warns that the crisis will “linger for years”.
King Coal’s Strengths
Coal is one of the most energy-dense fuels of nature formed from deposits of animal and vegetable matter deep in the ground at conditions of high pressure over a few hundred million years ago. To illustrate coal’s energy density, a Tesla battery that weighs over 500kg and takes 25-50 tons (i.e. thousand kgs) of minerals to be mined, processed, and transported, can store the same energy as a mere 30kg of coal.
Via the Industrial Revolution, coal brought forth the trains, steamships and factories of the modern age, though British coal had been used in antiquity by the Romans for iron foundries and heating bathhouses. From the almost complete dependence on traditional biomass (wood, charcoal, dung, straw, etc.) prior to 1800, it took coal a century to account for half of global primary energy consumption. Energy transitions take an awful long time, as the work of Vaclav Smil has exhaustively surveyed.
Last month, Jeff Currie, Goldman Sachs’ Head of Commodities Research, provided testimony to this, stating in an interview: "At the end of last year, overall fossil fuels represented 81% of energy consumption. 10 years ago, they were at 82%...$3.8 trillion of investment in renewables moved fossil fuels from 82% to 81% of the overall energy consumption." It is apparent that renewable energy is not going anywhere fast.
But perhaps the least appreciated aspect of coal-based energy is its geopolitical significance. Often considered a “non-political” fuel, coal is the most abundant energy resource known. It is relatively cheap to mine, transport, and store. Its presence in considerable quantities in populous countries such as China, India, Indonesia and South Africa – apart from the resource-rich countries of the U.S., Russia and Australia – makes the fuel of vital significance from an energy security perspective. The same populous countries are otherwise starved of the other fossil fuels - oil and natural gas - which are a major burden on their balance of payments.
Ambient air pollution in both urban and rural areas in developing countries is a major public health problem but ‘belching’ coal power plants are not the major cause as commonly thought. It is primarily due to the indoor burning of solid biomass in cooking and heating. An estimated 30% of the global population does not yet have access to clean cooking technologies. The World Health Organisation reports that close to 4 million people die prematurely from illness attributable to indoor air pollution each year. The use of fuel wood, dung and crop residues within households is caused by the lack of access to cheap, coal-based grid electricity and modern fuels such as LPG.
Long vilified for being the dirtiest of the fossil fuels, coal is to the contrary a modern technology-success story. Key pollutants from coal combustion in power generation plants have fallen dramatically with technological improvements over the past several decades with the development of ultra-supercritical, high efficiency and low emission plants. These have drastically reduced emissions of pollutants that adversely affect human health which include carbon monoxide, lead, sulfur dioxide (SO2), oxides of nitrogen (NOX), ground level ozone and particulate matter (PM). A new pulverized coal plant with flue gas scrubbers, fabric filters, catalytic reduction and other control equipment and processes, reduces NOX by 83%, SO2 by 98% and PM by 99.8% compared to a similar plant without such pollution control features, according to the US Department of Energy.
Long Live King Coal
The climate industrial complex has long vilified fossil fuels in the name of a presumed impending climate apocalypse. It deprived the oil, gas and coal sectors of capital investments and diverted trillions of dollars of public funds to subsidize wind, solar and electric vehicle industries. Due to coal’s relatively high carbon-dioxide emissions upon combustion, the fuel has been cast as arch-villain by the climate alarmists. Yet it falls upon King Coal to continue serving the basic needs of over three quarters of the planet’s population. It is hardly likely that policy makers in China, India and the other populous countries of Southeast Asia and Africa will forsake the fuel and risk the well-being of their aspiring citizens on the urgings of Western climate ideologues.