Coal is a complex topic. On one hand, it is one of the most ideal of energy sources. It comes out of the ground ready for use and even comes in a very handy form for shipping. Then, it has a high yield, lending itself to highly efficient power plants. Take a look here to see which states use coal the most.
But, on the other hand, digging it out of the ground is environmentally damaging. Burning coal is the number one source of sulfur and nitrogen compounds in the air, causing all sorts of chemical problems, including acid rain. It is the number one source of mercury in the environment, poisoning the food supply and leading to neurological diseases in people who eat it. It is the number one source of manmade radiation in the air, a known carcinogen. It is the number one source of particulate matter, leading to a whole host of respiratory and pulmonary issues. And, the waste product is highly poisonous and contains, among other things, lethal levels of arsenic - an element and does not degrade. Nuclear foes beat the drum that nuclear waste can be poisonous for thousands of years. Well, coal waste is poisonous for all time.
And, of course, there are the CO2 emissions driving global warming and climate change. A recent study showed the heat trapped by CO2 emissions is as much as 100,000 times greater than the heat generated from the actual burning.
Given the fact that there are plenty of alternative fuel sources today, the conclusion I easily reach is we need to get off coal all together. I believe we need to shut down all coal mines and close all coal burning power plants. And, I don't believe that is a radical statement. What would be radical is to suggest we should continue to poison the planet and ourselves, and destroy the environment at the expense of our own safety and well-being. That is the radical position.
But, is that simply a pipe-dream? There is a massive amount of money involved in the coal industry. It is very safe to assume the coal interests will not merely shutter the mines and go away. However, the market is indicating that it may not be their choice. It is being made for them. Regulations to clean-up coal's act and alternative energy forms may be doing the job.
Natural gas appears to have kept 160 coal-fired plants from being built in recent years. Coal plants representing roughly 7 percent of the nation's power generating capacity will be closed this year. I estimate wind power kept about $1 billion worth of coal in the ground last year alone in just Canada and the U.S. Solar power is generating as much as 50% more than previously estimated and that amount is growing daily.
It is becoming more difficult for coal to be profitable and the markets are paying attention. In 2011, shares of Peabody Energy, one of the largest coal producers in the country, were selling for $72. Today, they sell for under $2. Recently, Alpha Natural Resources filed for Chapter 11 bankruptcy, stating "The Board of Directors of Alpha Natural Resources authorized the
filing of the Chapter 11 cases to enhance the company's future as it
weathers a historically challenged coal market." Walter Energy, another coal mining company, filed for bankruptcy in July. Coal prices are down 70% from four years ago. The coal industry's market capitalization is down 80% since April 2011. Many countries are distancing themselves from coal and renewable energy is cheaper than coal in many places.
European oil giants have petitioned international governments to set carbon-pricing standards in order to provide a stable environment. The idea is to essentially charge carbon producing companies a fee commensurate with the cost of the damage they do to the environment and the public. This would not be good for coal. The efficiency of coal rests on the fact that it is easy to mine and burn, but only when you pass the indirect costs on to others. If coal has to start paying for the damage it does it will be unable to compete economically. By the way, ExxonMobil and Chevron were not parties to that petition. Nor do Democrats from coal-producing states support the idea.
However, coal isn't dead. Interestingly, billionaire George Soros has recently invested millions of dollars in coal companies, including Peabody Energy. Soros has long been a critic of coal, so this move has generated plenty of speculation. Is he putting his money where his mouth is and planning on shutting down coal operations? Or, is he merely a money-grubbing SOB who sees a chance to make a profit at the world's expense? Soros is not one of my favorite people, despite his stance on climate change, so I'm expecting it is the latter.
Additionally, the International Energy Agency estimates coal demand will continue to rise, albeit at a slower rate, through 2019 and will peak out at 9 billion tons per year. The majority of that demand will be in China, despite its efforts to reign in coal burning, and undeveloped countries which will typically burn it in inefficient plants.
Coal defenders are quick to claim this will spell disaster for the world. Funny how they claim bad things for them is a disaster, but climate scientists predicting bad things are 'alarmists.' The fact is, it will not be a bad thing for the world economy. The energy industry has shifted before and the results were far from bad. In fact, coal accounted for about 80% of the world's energy production in 1900, but only about 20% today. The revolution has already occurred. Now, we need to finish it.
The trend is certainly there - coal is on the way out. We just need to make it happen faster.