King Coal Is Dying a Slow Death in America
Photo Credit: VanderWolf Images / Shutterstock
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You’ve seen the photos or read the stories. In some of China’s cities you can’t even see the sun. People walk down the streets wearing surgical masks. Tourists pose for photos in front of fake landmarks since the real ones are obscured. China’s economic salvation might end up its undoing... and ours. The country’s prosperity is clouded in a thick haze of smog belched from coal-burning power plants.
In cities choked by pollution and a world coming to grips with the realities of climate change, what future does coal really have? Is this prehistoric energy source headed for extinction? Or will we hang on to it and risk the same fate?
While China’s hunger for coal seems insatiable — it gobbles up 4 billion tons a year, about half of global supply — the story is different in the U.S. Here, coal’s share of electricity production has fallen from nearly 53 percent in 2000 to below 40 percent today. Coal companies face economic hardships, dwindling market shares and increasing regulations.
But don’t dance on King Coal’s grave just yet. The industry may continue to limp along for decades, with little growth, but lots of greenhouse gas emissions nonetheless.
“No one wants to say it — but the U.S. coal industry is in the process of slowly and quietly folding up shop,” said Richard Heinberg, a fellow at the Post Carbon Institute and author of many energy books including, Blackout: Coal, Climate and the Last Energy Crisis. “It won’t happen overnight and it won’t happen this decade. But it’s certainly not a growth industry.”
Coal’s future hinges on how a few key things play out in the next few years: public pressure, regulations, exports, technology, friends in high places, and most importantly, the amount of economically recoverable coal.
200 or 20 Years?
How much coal do we have left? It depends on whom you ask. The Energy Information Administration says that “estimated recoverable coal reserves” give us about 200 years worth of coal. But not everyone agrees with that figure.
A report by Leslie Glustrom for Clean Energy Action says that, “The belief that the U.S. has a ‘200 year’ supply of coal is based on the faulty reporting by the EIA of U.S. coal deposits as ‘reserves.’ Most U.S. coal is buried too deeply to be mined at a profit and should not be categorized as reserves, but rather as ‘resources.’”
Glustrom relied on many studies, including information from the United States Geologic Survey. The USGS has examined coalfields across the country and their numbers weren’t quite as rosy as the EIA. Take the Powder River Basin in Wyoming and Montana; it’s the country’s single biggest source of coal. The USGS found about 1 trillion short tons of coal resources there. But of that, the agency’s research deemed that only “25 billion short tons of coal resources met the definition of economically recoverable resources.
That may seem like a lot, but the U.S. currently produces 1 billion short tons a year, of which about 40 percent comes from the Powder River Basin — which give the region just over 20 years of coal.
The crux is not really how much remains underground but how much is profitable to extract. “If coal can’t be mined at a profit, not much of it will be mined,” wrote Glustrom. “It is unclear how long the U.S. coal industry will produce large quantities of coal and at what price, but the current financial distress of U.S. coal mining companies could lead to significant changes in U.S. coal production in less than a decade.”
That doesn’t mean that we’ll run out of coal in 10 years, simply that mining it will start becoming a losing bet for coal companies. It’s easy to see how that could happen. Natural gas prices have already edged coal out of some key markets and the prices of renewable energy are falling. Renewables are already becoming cost competitive in some places. Just like with oil and gas, the cheap and easy coal is gone. Production costs are rising and that’s being passed on to utilities. The prices that utilities have to pay for coal has increased about 7 percent a year since 2004.