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Coal in the United States

Excerpts from a long article. For the full text see the original at Global Public Media

Because the US has the world’s largest coal reserves, it has sometimes been called "the Saudi Arabia of coal." It is the world’s second-largest coal producer, after China, but surpasses both the number three and four producer nations (India and Australia) by nearly a factor of three.

Wood was this nation’s primary fuel until the mid-1880s, when deforestation necessitated greater reliance on abundant coal resources. Coal then remained America’s main energy source until the 1930s, when it was overtaken by oil. Today coal fuels about 50 percent of US electricity production and provides about a quarter of the country’s total energy.

The US currently produces over a billion tons of coal per year, with quantities increasing annually. This is well over double the amount produced in 1960. However, due to a decline in the average amount of energy contained in each ton of coal produced (i.e., declining resource quality), the total amount of energy flowing into the US economy from coal is now falling, having peaked in 1998. This decline in energy content per unit of weight (also known as "heating value") amounts to more than 30 percent since 1955. It can partly be explained by the depletion of anthracite reserves and the nation’s increasing reliance on sub-bituminous coal and even lignite, a trend that began in the 1970s. But resource quality is declining even within each coal class.

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Implications

With oil and natural gas prices rising at alarming rates, the return of the US to a greater reliance on coal might seem inevitable. The nation is currently paying over $620 billion per year for petroleum imports, and this ongoing transfer of wealth abroad cannot help but have a substantial negative impact on the domestic economy. There are three ways to moderate that impact: reduce consumption of liquid fuels through conservation; produce more fuels domestically; or electrify transport, which will require more electricity. Coal could help with either of the latter two strategies. Given that the nation possesses so much coal, and that energy from coal is still relatively cheap, it would seem inevitable that strong arguments will be made for a dramatic increase in coal production to help solve the nation’s energy problems.

Yet if most of the recent analyses cited here are correct, this strategy has a short shelf life. Within the planning horizon for any coal plant proposed today lie much higher coal prices and perhaps even resource scarcity.

The sheer amounts of coal that will be needed in order to offset any significant proportion of oil (and perhaps also natural gas) consumption, and to meet the projected increased demand for electricity, are mind-boggling. Coal is a lower-quality fossil fuel in the best case, and America is being forced to use ever lower-quality coal. Just to offset the declining heating value of US coal while meeting EIA forecasts for electricity demand growth by 2030, the nation will then have to mine roughly 80 percent more coal then than it is doing currently. If carbon sequestration and other new technologies for consuming coal are implemented, they will increase the amount of coal required in order to produce the same amount of energy for society’s use, since the energy penalty for capture and sequestration is estimated at up to 40 percent. A broad-scale effort to produce synthetic liquid fuels from coal (CTL) will also dramatically increase coal demand. If the current trend to expand coal exports continues, this would stimulate demand even further. Altogether, there is a realistic potential for more than a doubling, perhaps even a tripling, of US coal demand and production by 2030—which would hasten exhaustion of the resource from many current mining regions and draw the inevitable production peak closer in time.

Assuming this higher demand scenario (from CTL, increased exports, and growing electricity consumption), by 2030 the nation’s dependence on coal will be much greater than is currently the case, and coal’s proportional contribution to the total US energy supply will have grown substantially. But at the same time, prices for coal are likely to have increased precipitously because of transport bottlenecks and higher transport costs (due to soaring diesel prices), falling production trends in many current producing regions, and the lack of suitable new coalfields. The interactions of high and rising coal prices with efforts to maximize output are hard to predict.

As limits to domestic coal production appear, exports could diminish and there could instead be efforts to import more coal, probably from South America. But in that case the US economy would suffer increasingly from economic dependencies and geopolitical vulnerabilities that already hobble the nation as a result of its oil imports.

It may be tempting to think of coal as a transitional energy source for the next few decades, while a longer-term energy strategy emerges. But in that case, an important question arises: Will there be sufficient investment capital and technical resources in three or four decades to fund the transition to the next energy source, whatever it may be? By that time (assuming EIA projections are reasonably accurate), demand for energy will be higher. The price of oil, gas, and coal will be higher—perhaps much higher—and so the nation will be spending proportionally much more of its GDP on energy than it does now. Meanwhile, the energy cost of building new infrastructure of any kind will be higher. Therefore it is likely that insufficient investment capital will be available for the large number of new energy projects required. The transition if deferred will thus be more expensive and difficult than it would be now. Indeed, the longer a transition to an ultimate (and sustainable) energy regime is put off, the harder that transition becomes.

Coal currently looks like a solution to many of America’s fast-growing energy problems. However, this is a solution that, if applied on a broad scale, seems certain only to exacerbate the nation’s energy dilemma in the long run, as well as contributing to an impending global climate catastrophe.

(Note: This article is a draft chapter from a forthcoming book, currently titled Coal’s Future/Earth’s Fate, to be published by Post Carbon Press in spring 2009. The author wishes to thank Werner Zittel, David Rutledge, Jean Laherrère, David Strahan, Julian Darley, and Jason Brenno for assistance with this article.

Editorial Notes: Excerpts from a long article. For the full text see the original at Global Public Media. -BA

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