November 26, 2016    5 minute read

Trump’s Masterplan For The Global Coal Revival

The Saudi Arabia Of Coal    November 26, 2016    5 minute read

Trump’s Masterplan For The Global Coal Revival

One of Donald Trump’s hallmark campaign promises was the revival of American coal. Now that he will be moving into the White House, Trump will most likely make good on his promises to boost the US coal industry and “end the war on coal and the war on miners.” If and how he achieves this will make or break a revolution in global coal mining.

A Difficult Road Ahead

This will be an arduous task at best. Indeed, the American coal industry has been dying a slow death since the 1980s and was recently marked by the bankruptcies of Peabody Energy, formerly the world’s largest publicly traded coal company, and other major coal mining firms such as Arch Coal, Patriot and Alpha Natural Resources.

A recent report published by the US Energy Information Administration revealed that the first three months of 2016 saw the lowest quarterly coal production since 1981. 80% of retired electricity capacity in 2015 was coal, mostly old and small plants that were no longer up to the EPA’s modern environmental standards or were converted to produce natural gas instead.

80% of retired electricity capacity in 2015 was coal

Changing market conditions for coal producers are the result, where cheap natural gas has become the main competitor, and measures to protect the environment and climate have fed the circle of waning supply and demand for coal. Therefore, Trump’s words have reignited the flicker of hope for those employed by the coal mining industry.

The President-Elect’s intention to repeal the Environmental Protection Agency’s Clean Power Plan has been hailed as a means to do away with one of the major culprits behind the industry’s sharp decline. But most importantly, it is Trump’s focus on clean coal that carries the greatest chance of bringing coal back into the mix.

The New Technologies

The fact remains that coal is a cheap and abundant energy source, and carbon capture and storage (CSS) technologies could be the way forward in utilising it without compromising on climate change goals. By pioneering new ways of burning coal – for example, by heating it without the addition of oxygen and thereby stripping the carbon dioxide away from the coal – the climate impact is taken out of the equation and coal would not need to be subjected to harsh environmental regulations.

In the US, the Kemper County Carbon Dioxide Capture and Storage Project is the EPA’s CCS flagship project, meant to “demonstrate the feasibility of CCS on coal-fired power plants in order to reduce their CO2 emissions.” The project was blighted by cost overruns and delays and is expected to finally produce electricity from coal by the end of the year.

If the US can profit from this technology, then so can the rest of the world. This is of particular importance in the light of statistics published by the International Energy Agency (IEA). In 2014, coal accounted for almost 41% of world electricity generation, amidst expectations that global electricity consumption will grow by more than 70% by 2040.

As a result, coal will be used to generate 23% more electricity by 2040, causing a 40% increase in demand. Add to this the fact that five of the G7 countries – Britain, Germany, Italy, Japan and France – have begun to burn more coal again, consuming 16% more in 2013 than in 2009, and the outlook for coal is positive.

Developed Countries Setting The Tone

For many countries, being able to access and make use of their coal resources is indispensable for their continued economic development and prosperity. It is not surprising then that developing countries are going to massively expand their use of coal. India is expected to become the world’s second-largest coal consumer by 2020, doubling its consumption by 2040.

Given India’s gigantic demand for energy and resulting environmental pressures, the fact that an Anglo-Indian company called Carbon Clean Solutions Limited (CCSL) in Chennai has shown carbon capture technology to be commercially viable is certainly good news. Having captured 97% of carbon emissions from a coal-fired plant, this technology is not only highly effective, but it is also a lot cheaper relative to other carbon capture processes. With serious political will backing these technologies, many developing countries could take full advantage of such innovations.

The Need For Political Backing

Unfortunately, however, it is this political will that has long been lacking. CCS technology is still in its infancy, so for it to take off in earnest more investments are essential. But if Trump delivers what he promised, America might well turn into the global leader in carbon capture technology.

Large-scale projects such as Chennai and Kamper testify to the feasibility of the technology, and while many pilot projects are often criticised for their lack of progress, the criticisms stem from project management issues rather than from operational shortfalls of the technologies involved.

Exploring CCS further and perfecting it is a costly commitment, but the economic benefits to be reaped outweigh the monetary costs by far. The US has an estimated 256 years worth of coal deposits available through mining, earning the nickname “Saudi Arabia of coal.” Being able to exploit these massive resources in a safe and environmentally responsible manner is an opportunity that cannot be ignored.

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