Peak Coal

The Coming Decline and Fall of Big Coal

Rolling Stone,

28 September, 2011

AP ran a great story yesterday about the coming decline of the coal industry in Appalachia that I fear is not going to get nearly the attention it deserves.   Because if you think about this story seriously for more than 30 seconds, you will come to see that it has huge implications not only for future U.S. energy policy but also for the coming presidential election.

The AP story captures, in brief, what journalists who cover the Appalachian coal industry (like Ken Ward Jr. of the Charleston Gazette, whose blog, Coal Tattoo, is a must-read), have been saying for a long time: the coal industry as we know it today is a dead man walking.  All the high-quality, easy-to-get coal is gone, and what’s left is increasingly expensive and difficult to mine.  In the last couple of decades, coal operators have dealt with this by shifting to cheap but highly destructive ways of getting coal out of the ground, such as blasting away the mountains above the coal with explosives (a practice known as mountaintop-removal mining).  But now the remaining coal seams are so deeply buried and so thin that even that isn’t working anymore.  As the AP story points out, the U.S. Department of Energy projects that in a little more than three years, the amount of coal mined in Appalachia will be just half of what it was in 2008.  After that, the downward spiral will continue.  There is no magic remedy, no quick fix: when the coal is gone, it’s gone.

The implications of this are profound and far reaching – and not only for the people who live and work in the coal fields.  As the AP story points out, there were about 37,000 coal industry employees in Central Appalachia in 2008, accounting for anywhere from 1 to 40 percent of the labor force in individual counties.  "We are going to see declines in labor and jobs, and it's going to happen rapidly" in West Virginia, said Rory McIlmoil, who helped draft a recent report (PDF) on the future of coal in Appalachia. West Virginia is also expected to see a decline of over $100 million in the taxes coal operators pay to mine in the state, which means dramatic cuts in social services and education that people in the region can ill afford. 

The end of coal in Appalachia doesn't mean that America is running out of coal (there’s plenty left in Wyoming).  But it should end the fantasy that coal can be an engine of job creation – the big open pit mines in Wyoming employ a tiny fraction of the number of people in an underground mine in Appalachia.  And for a variety of reasons – railroad congestion among them – Wyoming coal is never going to ramp up production enough to have a meaningful impact on job creation.  For better or worse, the bulk of coal industry jobs are in Appalachia – and when that coal is gone, so are the jobs.

More important, the decline of Appalachian coal means it’s time for every political candidate with national aspirations to stop kissing the industry’s ass in important swing states like Ohio, Pennsylvania, and West Virginia.  The future of these states depends on their ability to re-invent their economies, not preserving a relic of the past.  The relevant questions now are: How do we move beyond coal?  How do we bring new jobs to the coal fields and retrain coal miners for other work?   How do we inspire entrepreneurialism and self-reliance in people whose lives have been dependent on the paternalistic coal industry?

It also means it’s time to stop letting Big Coal spike every conversation about climate and energy policy.  For decades, climate and energy policy has been held hostage by bullshit arguments from the coal industry that any attempts to reduce greenhouse gas pollution or shift to renewable energy will bring economic ruin to America. 

Well, the decline and fall of the coal industry shows that just the opposite is true: Our future is not dependent on burning more coal, but on getting off it as quickly as possible and creating a new economy based on clean, renewable energy.  It may be too late for West Virginia to save itself from the ravages of Big Coal.  But it’s not too late for America.

UPDATE 2-Chinese regions face severe winter power shortage-NEA

Reuters

Thu Sep 29, 2011 5:44am EDT

* South, central China face shortage due to low water levels

* Shortfall to hit coal-producing regions on lower power price

* Energy-intensive firms face power cuts, gas demand may rise

* Power market reform, coal market freedom undermined (Adds details, background)

BEIJING, Sept 29 (Reuters) - China's southern and central regions, which depend heavily on hydropower, will face a power supply squeeze this winter due to low water storage and strong demand growth, the country's top energy agency said on Thursday.

The National Energy Administration's (NEA) remarks echo an earlier comment by the state-run China Southern Power Grid Corp, which estimated that shortages at five provinces in the south -- Guangdong, Guizhou, Guangxi, Yunnan and Hainan -- would amount to some 14 gigawatts (GW).

The shortage, roughly 8 percent of total installed capacity in areas the Southern Power Grid services, will potentially curb operations of energy-intensive firms like metal smelter Chalco which are already facing power rationing.

It may also increase demand for gas in regions such as Guangdong, which has begun to take in the cleaner fuel via pipeline from Turkmenistan, in addition to liquefied natural gas imports through the country's first receiving terminal Dapeng.

For article GO HERE