West Virginia Blue:: Does “Clean Coal” make economic sense?

An excellent post by Clem Guttata over at West Virginia Blue. The short answer to the question is Hell No, coal aint economical and its tearing up our mountains, time to move on!

Does “Clean Coal” make economic sense?

by: Clem Guttata

Sun Dec 13, 2009 at 18:08:43 PM EST

By Clem GuttataI posted a version of this diary at DailyKos on Saturday morning. Thank you to everyone who engaged in a constructive dialogue on the topic there and on Facebook over the weekend.


If you’re not really sure what “Clean Coal” is, that’s easily forgiven. Clean Coal has meant a lot of different things to a lot of different people. Many decades ago, one enterprising company sold “clean coal” that burned with less smoke in your home heating furnace. Today, the term usually refers to carbon capture and storage (CCS) or coal-to-liquid fuel (CTL).

The Obama administration and leading figures in Congress are still pushing for tens of billions of dollars of investments in “cleaner coal.” With a pause in consideration on the energy and climate change legislation, it’s a good time to ask… just what we would we get in return for that investment?

:::

For those who like to cut to the chase, here’s the short answer. Carbon capture and storage is risky and expensive. Coal to liquid only makes sense if you ignore carbon emissions or if expect we’ll lose access to foreign sources of oil. But, read on. There’s another major challenge you probably aren’t aware of.

As a starting point, read what James B. Meigs writes in Popular Mechanics, “The Myth of Clean Coal: Analysis”

Sadly, although it might make little economic or scientific sense, the political logic behind clean coal is overwhelming. Coal is mined in some politically potent states-Illinois, Montana, West Virginia, Wyoming-and the coal industry spends millions on lobbying. The end result of the debate is all too likely to resemble Congress’s corn-based ethanol mandates: legislation that employs appealing buzzwords to justify subsidies to a politically favored constituency-while actually worsening the problem it seeks to solve.

The Meigs piece is good at laying out the basics of carbon capture and storage, but an even more detailed look at the economics is provided by Richard Heinberg, writing for the Solutions Journal. (All emphasis in quotes is mine.)

The “clean coal” argument runs like this: America is brimming with cheap coal, which provides almost half our electricity and is the most carbon-intensive of the conventional fossil fuels. The nation will need an enormous amount of energy over the next few decades, but renewable sources just aren’t ready to provide all-or even the bulk-of that energy. Meanwhile, preventing catastrophic climate change requires that we stop venting carbon dioxide into the atmosphere. It is possible to capture and store the CO2 that would otherwise be emitted from burning coal, and elements of carbon capture and storage (CCS) technology are already in use on a small scale. Put all of these factors together and the case for government funding of research and development of “clean coal” seems strong.However, several recent studies of US coal supplies suggest that much that we think we know about coal is wrong. If these studies are correct, the argument for investing in “clean coal” becomes tenuous on economic grounds alone. These studies call into question the one “fact” that both pro-coal and anti-coal lobbies have taken for granted: that the US has a virtually limitless supply of cheap coal.

Back in April, Democrat Rep. Nick Rahall (WV-03), spoke to this unpleasant truth. He noted “the state’s most productive coal seams likely will be exhausted in 20 years.” The backlash from in-state coal interests was strong. Rahall has not spoken about coal supplies since, and for that brief moment of truth his consequence is a coal-industry funded primary challenger.

USGS Chapter H Figure 11 on Flickr

What would it take for Rep. Rahall to say something like this? Back to the Heinberg piece for the answer…

Doubts were first raised in a book-length 2007 report by the National Academy of Sciences titled “Coal: Research and Development to Support National Energy Policy” (1), which noted that “Present estimates of coal reserves are based upon methods that have not been reviewed or revised since – 1974,” and concluded that a newer and better assessment “may substantially reduce the number of years’ supply.”Also in 2007, an energy analytics organization founded by a member of the German Parliament, Energy Watch Group (2), released a study of US and world coal supplies concluding that global coal production will reach a peak and begin to decline sometime around 2025, and that US coal production will peak only slightly later-perhaps by 2030 or 2035.

Last December the USGS issued a report (3) on the nation’s largest and most productive coalfield, in Wyoming, finding that, at current prices, only about six percent of the coal can be profitably mined; if coal prices soared, then more of the coal would be recoverable-but then coal wouldn’t be economically competitive with other energy sources.

But I keep hearing we have hundreds of years of coal left in the United States. That has to be correct doesn’t it?

America’s coal resources are indeed vast-none of the studies claims otherwise. However, during the past century, coal reserves (the portion of total coal resources that can be mined profitably with existing technologies) shrank much faster than could be accounted for by the depletion of those resources through mining. That is because geologists are doing a better job now of taking into account “restrictions” that make most coal impractical to mine-factors having to do with location, depth, seam thickness, and coal quality. In recent years, some nations have reduced their booked coal reserves by 90 percent or more on the basis of new, more realistic surveys. The National Academy of Sciences report mentioned above is essentially a plea for an updated US national survey, and it offers abundant reasons for thinking that such a survey would almost certainly reveal a much smaller reserve base than the one on which current supply forecasts are founded.Moreover, when it comes to forecasting future coal supplies the official agencies seem to have been asking the wrong question, namely, “When will the nation run out of coal?” The customary answer is, “Not for a couple of hundred years or more”-which is a sufficiently long period for current energy planning. But more relevant questions are, “When will it no longer be possible to increase the rate at which coal is being extracted?”, and “When will coal cease to be an economically competitive energy source?” These are addressed in the Energy Watch Group study, which reasons that, long before the nation runs out of coal, production will peak and start to decline due to the depletion of easily accessible, high-quality deposits. Already some of America’s most important coal regions are long past their glory days, and recent field surveys by the USGS (including the one cited above) suggest that the capacities of even the most abundant coalfields in the nation have been over-estimated.

So what? As long as we’ve got coal to mine, shouldn’t we try to burn it as cleanly as possible?

A 2007 MIT study, “The Future of Coal” (4), found that if just 60 percent of the CO2 from US coal-fired power plants were to be captured and compressed to a liquid, its daily volume would equal the amount of oil Americans consume each day (about 20 million barrels). The study also concluded that a huge increase in investment in industrial-scale demonstration plants would be required now even to know in 10 or 15 years if the technology can work at a meaningful scale. All of this underscores the basic fact that carbon capture and storage is going to be very expensive-if it is even possible to accomplish on the scale that is being proposed.Yet there is a subtler but possibly even more decisive price tag for “clean coal”: the energy cost. According to the most recent estimate (from Harvard University’s Belfer Center (5), at least 30 percent of the energy produced by burning coal will be needed to run the system for capturing, compressing, pumping, and burying CO2. Therefore any efficiency benefit from gasifying coal at IGCC power plants would be canceled out.

But already the average quality of coal being mined is declining-that is, we get less energy for each ton of coal burned today than we did ten years ago. This is a natural consequence of the “low-hanging-fruit” principle of resource extraction, in which we tend to consume the highest-quality, most easily accessed resources first.

So as time goes on, the US will need to burn more coal, while the coal itself will be more scarce and costly. And the technology used will be far more expensive and complex, both to build and to operate, than the system of power plants we have today. Taken together, these factors read like a recipe for cost overruns and spiraling electricity rates.

That doesn’t sound good. Wait… did he just say “spiraling electricity rates?” You mean, you and me and me and you are the ones who are going to be paying higher rates if this coal carbon-capture-storage stuff doesn’t work out quite right?

Imagine a scenario in which the US goes ahead with the attempt to develop “clean coal” technologies. During the coming decade tens of billions of dollars (mostly from government) would likely need to be invested in research and the construction of demonstration projects. By 2020, the price of coal will already have begun to rise, as supply problems multiply, yet “clean coal” technology won’t be ready to deploy widely (the most ambitious proposals don’t see that happening until after 2025). Even if renewable energy doesn’t get cheaper due to technological advances (and most analysts assume it will), at some point along this timeline the “clean coal” bandwagon will almost certainly grind to a stop because it is simply too expensive to keep going.

That’s a rather ugly and all too plausible scenario. West Virginia Sen. Jay Rockefeller insists “that efforts to address greenhouse gas emissions give our economy and our industries the time that’s needed to develop and implement these new technologies.”

Sen. Jay Rockefeller campaigns for change

If Rockefeller is right that CCS needs decades and these studies are right that we’re fast running out of coal, then we’re talking about one massively expensive boondoogle in “clean coal” that will do nothing to clean up our atmosphere, do nothing to secure our economic future, and do nothing to prepare us for a post-carbon future.

I don’t agree with the premise that it is okay to waste billions of dollars just to provide political cover to win a vote for energy and climate change legislation. Those Senators and Representatives who say that “cleaner coal” technology is essential to win their vote need to prove how it could ever be an economically viable option.

Image credits: americaspower, USGS (chart), WVaBlue.

Clem Guttata :: Does “Clean Coal” make economic sense?
Update: If the proposals on the table for tens of billions in “cleaner coal” technology investments are passed, here’s what is going to happen:

West Virginia is going to run out of coal well before Wyoming and Montana do. When those “cleaner coal” plans get built in West Virginia and we run out of cheap coal, we’re going to be stuck with either importing really expensive coal from WY/MT or abandoning those really expensive technology investments. Either way, we’re looking at a horrible deal for West Virginia residential and commercial rate-payers. Talk about a jobs and quality of life killer.

That’s a scenario that ought to scare the heck out of all of us.

In a nutshell, that’s why I don’t think it is in West Virginians’ best interests for our Sens. to have “cleaner coal” as their primary point of negotiation in energy/climate change legislation.

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Coal not economically competitive (0.00 / 0)

when you figure the long-term direct and indirect costs.  There are more jobs installing wind mills and solar panels than there are extracting coal and related industry.  It will be relatively easy for US power plants to convert to natural gas or bio-fuels, coal is worried…and they should be.

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