So You Think We're Reducing The Use Of Coal? -- Think Again
While coal use in America and Europe has leveled, growth in coal use worldwide is increasing dramatically (Figure 1).
[ Thank you Tom Steyer. ]
And natural gas has kicked into high gear most everywhere (Figure 2).
Renewables have grown rapidly, relative to themselves, but are still extremely small with respect to fossil fuel growth. In fact, just the growth in fossil fuel over the last five years has dwarfed the growth in renewables over the same time period. Nuclear and hydro are level but predicted to grow only moderately in the next few decades (Figure 3). It is interesting to note that the Great Recession had little effect on global energy growth.
While the developed world is switching from coal to natural gas, the developing world sees coal as their savior.
 Figure 1. Coal use for electricity production is increasing at an even greater rate since 2000, primarily in Asia and the Pacific region. Coal is predicted to continue increasing until mid-century. Source: University of Calgary, Energy Education.ca
[ Green Democrat Tom Steyer became a billionaire making that happen. ]
 Figure 2. In contrast to coal, natural gas use is increasing more in the industrialized world. Note the smaller scale on this figure versus that for coal. Source: University of Calgary, Energy Education.ca
 Figure 3. Although dramatic increases have occurred in renewable energy, they are still extremely small and will continue to be small compared to fossil fuel use for decades. Nuclear and hydro are level but predicted to grow moderately in the next few decades. Note the smaller scale on this figure versus that for coal. Source: University of Calgary, Energy Education.ca
In the developing world, there are 1.6 billion people that have no access to electricity, whatsoever. 2.4 billion people still burn wood and manure as their main source of energy. And 3 billion more people will be born in the next 30 years.
This is a lot of people that will require a lot of energy. Just to survive. To have a reasonable life, they will need at least 3,000 kWhs per person per year. That’s about 20 trillion kWhs per year, a lot more than all the electricity produced in the world today.
That’s 2,000 GenIII nuclear power plants. Or 5,000 coal-fired power plants. Or 20,000 gas-fired power plants. Or 20,000,000 large wind turbines.
Besides costing between $10 and $20 trillion over 30 years, how do you provide this much energy to the developing world that has almost nothing – no infrastructure, no expertise, no resources?
You give them coal.
Just like we did to ourselves 100 years ago. Just like China’s been doing since the 1990s.
 Figure 4. About 1.6 billion people have no access to electricity, whatsoever. 2.4 billion people still burn wood and manure as their main source of energy. And 3 billion more people will be born in the next 30 years. Unfortunately, most of them will be powered by coal.
Of all energy sources, coal is the easiest to set up. The easiest to transport – by ship, rail and truck. It is straightforward to build a coal-fired power plant. And to operate it.
While it is even easier to build a natural gas-fired power plant, it is not at all easy to support it. Natural gas requires more infrastructure than any other energy source – for transporting the gas in pipelines, liquefying facilities and special terminals; and for storing it, often deep underground in geologic formations like salt caverns. These limitations are slowing even America’s expansion of natural gas.
Nuclear is the most difficult to build in the developing world. In the developing world, large-scale renewables are not effective since there is no baseload to support them, no back-up sources to load-follow the intermittency, and no extensive high-voltage distribution system. Hydro is possible, but is limited geographically and physiographically.
No, coal is the obvious energy source to bring a country’s starving people up into the modern world. After that, they may have the luxury to care about the planet.
Just ask China.
Next week, the Environmental Protection Agency is set to announce draconian new rules that will seek to clamp down on carbon emissions from coal-fired power plants. This will mark only the latest salvo in the White House war on coal. So it only makes sense that this week the Obama administration would want to tweak the optics and front-run the critics by showing that they are proponents, more or less, of natural gas.
Yesterday the U.S. Department of Energy announced a new method for vetting proposals for the export of liquefied natural gas. In a departure from its past “first-come, first-served” practice, the DOE will now only consider proposals that have been subjected to the extensive environmental impact studies required by its sister agency, the Federal Energy Regulatory Commission.
The Obama administration is touting this change as evidence of its commitment to developing America’s capacity to export our plentiful, clean-burning shale gas to the world. By not wasting DOE staffers’ time perusing half-baked proposals that don’t have a chance of getting built, the new policy could potentially speed up the approvals process. There’s currently 25 projects in the queue.
“Projects that have completed the [environemental impact] review are, generally speaking, more likely to proceed than those that have not,” said Jason Bordoff, director of Columbia Unversity’s Center on Global Energy Policy and a former White House advisor, in a statement Thursday.
This policy change will enable the Obama administration to combat the perception that it was dragging its feet on LNG exports. “I have long warned that the United States faces a narrowing window of opportunity to enter the global gas trade,” said U.S. Sen. Lisa Murkowski (R-AK.) in a statement yesterday. “Projects have languished in the so-called ‘queue’ awaiting approvals from two separate agencies in a parallel process that often did not function well.”
But how big a deal is this, really? It’s unlikely that this change will have any material impact on how many LNG terminals eventually get built. There’s already been three big projects approved, which together would have the capacity to export on the order of 7 billion cubic feet of natgas per day (roughly 8% of current supplies). With natgas prices having trebled in the past two years, and outright shortages hitting the Northeast during last winter’s Polar Vortex, there’s a very real question as to how much exports would be too much. (Charif Souki, CEO of Cheniere Energy LNG -0.04%, which is building the first export terminal, doubts there will ever be more than three projects built.)
So why did DOE announce this policy change now? It’s all about the optics. On Monday, Obama’s Environmental Protection Agency is set to release a set of draconian new carbon dioxide emissions standards governing the nation’s electric power plants. These new rules are widely expected to force operators of coal-fired plants to invest in expensive technology to reduce emissions — and to effectively ban the construction of new coal plants.
It only makes sense that the administration wants to front-run its anti-coal edicts with a pro-natgas policy.
In tandem with its Thursday announcement, the DOE also released a “life cycle greenhouse gas perspective” comparing the overall carbon impact of foreign countries burning American LNG versus burning their own coal. Factoring in all the carbon emissions from every step in the supply chain, from drilling wells, to chilling and shipping gas, to burning it in power plants, the report concluded that regionally mined coal has a significantly higher carbon intensity than does LNG. U.S. gas shipped from New Orleans to Rotterdam, and burned in Europe generates 629 kilograms of carbon dioxide per mWh, they determined. Compare that to coal mined in Europe, which generates 1,089 kg per mWh. Same story on the New Orleans to China route: 660 kg of CO2 per mWh for U.S. LNG, versus 1,089 kg for Chinese-mined coal.
These are important numbers for the administration. If their goal is to reduce global carbon emissions, then exporting LNG from the United States to offset consumption of regional coal supplies is a good thing.
Don’t expect the carbon absolutists to be satisfied. In a statement yesterday Sierra Club attorney Nathan Matthews said, “The Sierra Club applauds the Department of Energy for proposing to end the practice of conditionally approving LNG export applications before an environmental review has been conducted, as well as recognizing the need to consider LNG’s entire emissions footprint, from the wellhead on. It’s never made sense to evaluate LNG exports without knowing the impact they would have on the environment and on our climate, so this announcement is a step in the right direction.”
 LNG tanker. (Photo credit: kenhodge13)
The Sierra Club, of course, would like to stop fracking and coal mining and have us all live in the dark without heating or air conditioning while lamenting that solar power and wind turbines are nowhere close to being scalable enough to meet our electricity needs.
Thankfully the White House is a little more pragmatic. President Obama has touted the economic and environmental benefits of America’s natural gas revolution. He’s been careful in his speeches not to demonize the process of hydraulic fracturing, without which this gas boom would not be possible. The administration’s message — as will be underscored by the EPA’s moves next week — is clear: we support the natural gas boom, and LNG exports, because it gives us the opportunity to kill off coal.
http://www.forbes.com/sites/jamesconca/2014/10/23/so-you-think-were-reducing-the-use-of-coal-think-again/ |
