Opportunity was returning in the form of a $2 billion coal-fired power plant, which the worlds largest coal company, Peabody Energy Corporation, of St. Louis, was about to build just a few miles southwest of Nashville. According to the governor, the plant, to be known as the Prairie State Energy Campus, would create 2,500 construction jobs, 450 permanent jobs, and $100 million or so a year in spin-off revenues. A phalanx of Peabody executives was on hand to show their support. Peabodys CEO at the time, Irl F. Engelhardt, stepped up to the microphone. The technology Prairie State will use is absolutely the best that has been put together on a coal plant, Engelhardt assured the crowd. Prairie State is an important step forward in terms of the cleanliness of coal plants, and ultimately will help us get to near-zero emissions from coal plants.
A few local politicians chimed in, the band struck up the Hornets fight song, and there was a lot of clapping and backslapping. Even the kids in the bleachers, most of them born long after the coal industry had died in the region, were on their feet cheering. Coal is U.S.A.! someone shouted. Coal is U.S.A.!
For Big Coalthe alliance of coal mining companies, utilities, railroads, and lobbying groups that make coal such a powerful political and economic force in Americathe slogan Opportunity Returns is a rather coy understatement. Boom is more like it: the world is in the midst of an unprecedented love affair with coal. According to the International Energy Agency (IEA), the energy equivalent of some 1,350 thousand-megawatt coal-fired power plants will be built by 2030. Forty percent of them will be in China, where coal is fueling a stunning economic transformation. India will add another 10 percent or so, and most of the remaining half will be added in the West. In the United States, the IEA predicts, about a third of the new electric-generating capacity built by 2025 will be coal-fired. Besides Peabodys Prairie State plant, more than 120 new coal plants are now in the works throughout the nation.
Many people think coal in the U.S. went the way of top hats and corsets. In fact, the U.S. depends more on coal today than ever before. Americans consume, on average, about twenty pounds of it a day. Roughly half the nations electricity comes from coalmore than a billion tons of it a year. In fact, electric-power generation is one of the largest and most capital-intensive industries in the country, with revenues of more than $260 billion in 2004 alone. Americans may not like to admit it, but the nations shiny white iPod economy is propped up by dirty black rocks.
Yet coal harbors some profound character flaws, and all nationsbut particularly the U.S. and Chinaought to consider them carefully before transforming their whirlwind infatuation with the economics of energy from coal into a long-term commitment. First, coal can be quite dangerous to acquire.
Furthermore, coal damages the environment and public health. Mining it levels mountains and disrupts ecosystems. Burning it yields toxic emissions that cause acid rain, polluted lakes and rivers, and poor air quality. Perhaps most important, burning it emits far more carbon dioxide (CO2) per unit of usable energy output than any other energy source. Carbon dioxide, of course, is a potent greenhouse gas; the more CO2 in the atmosphere, the warmer the Earth gets. In 2005, at a conference in Exeter, England, on the dangers of abrupt climate change, 200 leading climatogists and policy makers from thirty countries agreed that if the Earths average surface temperature should rise above pre-industrial levels by more than 3.5 degrees Fahrenheit (about two degrees Celsius), the risk of dangerous climate change would increase dramatically. The consequences of such change have been well documented and publicized: among them are higher sea levels, more intense storms, local desertification, and rapid disruption of ecosystems. Right now the Earth is a little past the halfway mark to a rise of 3.5 degrees. The atmosphere has already warmed one degree F, and another degree of warming is stored in the oceans. If the U.S. and China go forward with their plans to build new coal-fired power plants, the CO2 they will pump into the atmosphere will make it exceedingly difficult to avert drastic climate change. Because the consequences may be severe, now is a good time to take stock of how King Coal regained its throne, and what energy choices remain.
At the root of the current entanglement with coal is a worldwide energy crunch. Between 1950 and 2000 the worlds population grew by roughly 140 percent. But fossil-fuel consumption increased by almost 400 percent, propelled largely by growth in the West. Moreover, by 2030 the worlds demand for energy is projected to more than double. At the same time, the remaining reserves of oil and natural gas appear to be declining, and the future of nuclear power and renewable energy (solar power, wind power, and the like) remains uncertain.
In addition to those considerable advantages, several recent historical factors have also contributed to the coal boom in the U.S. Californias rolling blackouts in January 2001 underscored the need for new investment in electricity generation and transmission. The collapse of Enron helped throw the natural-gas market into turmoil, sending prices skyrocketing and making coal extremely cheap by comparison. The 2000 presidential election was another turning point. Coal-industry executives knew that if the Democratic candidate, Al Gore, were elected, regulations to limit or tax CO2 emissions would soon follow. So Big Coal threw its money and muscle behind George W. Bush. President Bush reciprocated by staffing regulatory agencies with former coal-industry executives and lobbyists, and by inviting Big Coal to play a prominent role in crafting the nations new, unabashedly coal-friendly energy policy. Finally, the terrorist attacks of September 11, 2001, made many people reconsider the high cost of depending on oil from the Middle East.
Whats most remarkable about Americas current coal boom is that, unlike other recent booms, which were driven by a (perhaps irrational) exuberance, this one is driven by overwhelming fear: fear that the world is running out of energy, fear that the U.S. is losing its edge, and, most of all, fear that if Americans dont burn more coal, not only the economic health of the nation but civilization itself is at risk. Have you ever been in a blackout? one coal executive asked me. Do you remember how dark the whole world gets? Do you remember how scary it is?
Big Coal frequently argues that todays coal boom is not like coal booms of the past. And in some ways, thats true. Mining practices in some regions have vastly improved, and the industry is safer than it was thirty years ago. Emissions of sulfur dioxide and nitrogen dioxide at new coal plants are much lower than they are at old plants. Increasingly clean is the industrys favorite sound bite.
But the truth of the phrase leans heavily on the word increasingly. The scrubbers on new coal plants might be better, but the plants still release plenty of arsenic, cadmium, lead, mercury, sulfur dioxide, and soot particles. They still require prodigious amounts of water for cooling, and generate millions of tons of coal ash, laden with heavy metals. Nor does increasingly clean exactly describe the mountains of Appalachia being blasted away to supply the fuel for the new plants. Mountaintop-removal mining, as this practice is called, is a recent innovation.
And many of the new coal plants are much like earlier generations of plants in one crucial way: they, too, discharge hundreds of millions of tons of CO2 into the atmosphere. Prairie State, for instance, will emit more than 11 million tons of CO2 a year, only marginally less than a plant of similar size built thirty years ago. That is why the coal boom is so alarming.
Right now about one quarter of the worlds CO2 emissions come from coal-burning power plants; all the worlds uses of coal together account for about 40 percent of emitted CO2. The 1,350 gigawatts of new coal-fired generating capacity projected for construction in the next twenty-four years will, if built, add roughly 572 billion tons of CO2 to the atmosphere during the new plants sixty-year operating lives. That is about as much CO2 as was released by all the coal burned by everyone, for every purpose, during the past 250 years. Adding that much CO2 to the atmosphere will make it much harder to limit global warming to the relatively safe increase of 3.5 degrees F.
Cheap coal also wouldnt seem such a bargain if its numerous hidden costs were calculated into the price of power rather than off-loaded onto the public, as they now are. Those costs include the blighted mountains and economic ruin of many coal-mining regions, the medical bills for treating the heart attacks and asthma caused by air pollution, the lost future incomes of children adversely affected because they were exposed in the womb to mercury from fish eaten by their mothers. Using data from a widely respected ten-year study by the European Commission, Robert H. Williams, a physicist at Princeton University, estimates that the effects of air pollution from U.S. coal plants on public health would add about thirteen dollars, or 25 percent, per megawatt-hour to the price of coal-fired energy. For the oldest, dirtiest plants, the added costs could reach thirty-three dollars. In comparison, the cost of such externalities for a natural-gas plant is only about forty cents. In a market that accurately reflected true energy costs, coal would not be such an attractive option.
There is a better way to take advantage of coals abundance: a relatively new technology that goes by the unfortunately complicated name of integrated gasification combined cycle, or IGCC. Instead of burning coal directly, as conventional coal plants do, IGCC plants cook off major impurities as they convert coal into a synthetic gas, which is then burned to generate electricity. IGCC plants burn nearly as cleanly as natural-gas plants, are 10 percent more efficient than conventional coal plants, consume 40 percent less water, and produce half as much ash and solid waste. But more important, it is far easier and cheaper to remove CO2 from coal at an IGCC plantbecause CO2 is concentrated during gasificationthan it is at a conventional coal plant. The CO2 could then be sequestered underground or perhaps under the sea. Carbon dioxide sequestration is still a controversial idea that is just beginning to be tested. But the combination of IGCC technology and CO2 capture and sequestration at least offers a plausible way to continue burning coal without trashing the climate.
Out of the hundred or so coal-powered plants slated for construction in the U.S., however, only a handful are now planning to incorporate IGCC technology. Why? First, Big Coal argues, the plants are expensive: an IGCC plant costs between 10 and 20 percent more to build than a conventional coal plant does. That may be true, but if you factor in the likelihood of future limits on CO2 emissions, the advantages of carbon capture and sequestration would enable IGCC to operate more cheaply by nearly 20 percent. In the long run, electricity from IGCC plants will almost certainly be cheaper than electricity from conventional coal plants.
Second, Big Coal asserts, IGCC is still an unproven technology. Yet engineers have been gasifying coal for 150 years, and coal-gasification plants in the U.S. and elsewhere have been generating electric power since 1984. Some of the biggest names in power-plant engineeringGeneral Electric Company, the Shell Group, Bechtel Corporationare starting to promote IGCC. But Big Coal has been pushing instead for one more generation of old combustion plants, rebranded as clean by bolting on some new scrubbers.
In China, coal is everywhere. Its piled up on sidewalks, pressed into bricks, and stacked near the back doors of homes. Its stockpiled into small mountains in open fields, and carted around behind bicycles and old wheezing locomotives. Plumes of coal smoke rise from rusty stacks on every urban horizon. Soot covers every windowsill and rings the collar of every white shirt.
The cost of Chinas replay of the western Industrial Revolution is obvious. The World Health Organization estimates that in East Asia (predominantly China and South Korea) 355,000 people a year die from the effects of urban outdoor air pollution. All over China, limestone buildings are dissolving in the acidic air, and acid rain is falling on a third of the country, crippling agricultural production. Not surprisingly, pollution is becoming a focus of political unrest.
The CO2 released by Chinas ravenous consumption of coal poses a grave threatnot just within Chinas borders but to the entire world. The Kyoto Protocol, now ratified by 162 nations (though, notably, not by the U.S. and Australia), calls for cutting greenhouse-gas emissions by 5.2 percent from 1990 levels by 2012. The coal-fired power plants that China plans to build by 2012 will generate more than twice that amount of greenhouse gases (as a developing nation, China need not reduce its emissions even though it ratified the treaty). By 2025, if China continues down its current path, it will overtake the U.S. as the worlds largest greenhouse-gas polluterand the chances of avoiding drastic climate change will become virtually zero.
In spite of such dire projections, China has done a lot to clean up its act. It has banned the use of coal for heating and cooking in cities such as Beijing and Shanghai; it has moved coal-fired power plants out of urban areas and replaced them with plants that burn natural gas; it has tightened energy-efficiency requirements on new buildings; and it is building one of the worlds largest offshore wind farms. In some ways, China has already leapfrogged ahead of the U.S. In 2005 the Chinese government announced that by 2020, renewable sources would generate 15 percent of the countrys energy. Whether that prediction is an aspiration or a firm commitment remains to be seen, but in 2005 a similar provision was stripped out of the U.S. energy bill. China also has passed vehicle fuel-efficiency standards that are much stricter than the ones in the U.S. But even with all those measures, China still has a long way to go.
The world faces two enormous challenges in the coming years: the end of cheap oil and the arrival of global warming. Coal may provide a solution to the first challenge, but only by exacerbating the second. Any serious effort to address global warming must target greenhouse-gas emissions by coal-powered plants, particularly in the U.S. and China. Americans can argue about the best way to do thisratify the Kyoto treaty and persuade China to adopt its emissions limits, tax CO2 emissions, provide bigger subsidies to clean-power development, mandate that new coal plants use IGCC technology and carbon sequestration, or give away free bicyclesbut do it we must.
The biggest impediment to such changes is the idea that Americans are dependent on the very thing that is killing us. That claim is made all the time: Passing laws that limit CO2 emissions, or require cleaning up dirty coal plants, or restrict mountaintop-removal mining, it is argued, will cause the price of electricity to skyrocket and the economy to collapse. And it is true that reforming the industry could cause electricity prices to rise, and bring genuine economic hardship to some areas. But the costs and consequences of global warming are simply too high to continue the indulgence in cheap coal.
Blind faith in technology is unwarranted; but people can certainly figure out less destructive ways to create and consume the energy the world needs. Ultimately, the most valuable fuel for the future is not coal or oil, but imagination and ingenuity.