Americans don’t want American coal any more. The large resources of shale gas and oil trapped in ancient rock formations beneath their houses and land is the fuel source that has them excited, along with the environmental benefits provided by renewable sources, such as solar panels and wind turbines.
Thise message was hammered home earlier this year when the Environmental Protection Agency (EPA) announced its proposals to ensure that the country cuts its carbon emissions by 30% below 2005 levels by 2030.
In order for it to achieve its target, the US will need to transform the emissions from power stations.s, responsible for more than a third of those emissions . Coal power stations, contributing around 25% of carbon emissions, will bear the brunt of the impact, with less carbon heavy and increasingly superior alternative gas-powered plants taking its place.
The transition will, of course, take a long time to be completed, but declining long-term prospects in the domestic market have already impacted on the sector, with more than half a dozen companies going under and many more cutting jobs and selling off assets. All in all, the domestic prospects for US coal are very bleak. If it is to survive long term, it will be foreign markets that provide with new life.
American coal burns cleaner in Korea
Recent research, led by Dalia Patino-Echeverri, assistant professor of energy systems and public policy at Duke University, argued that not only could exporting US coal to Asia provide long term economic benefits, but also deliver a significant cut in carbon emissions. The paper, which was funded by the National Science Foundation, conducted life-cycle air-emissions and economic analysis to compare US coal continuing to be burnt at coal plants retrofitted to meet EPA standards to provide power in the US with an alternative scenario where it is shipped to Korea for consumption.
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The paper, funded by the National Science Foundation, was based on life-cycle air-emissions and economic analysis, which compared US coal – burnt at coal plants retrofitted to meet EPA standards – with an alternative scenario where it is shipped to Korea for consumption.
In the export scenario – where the research team based their analysis on Ambre Energy’s proposal to ship 8.8 million tons of coal from Oregon to Asian markets by rail, river and ocean freight – the paper claimed that greenhouse gas emissions would be 21% per cent lower while sulphur dioxide and nitrogen oxide levels would also drop.
The basis of the claim is that because South Korea’s coal-powered plants are more energy efficient, the emissions accumulated through transportation would be more than outweighed by the efficiency gains.
According to Patino-Echeverri, said: "Despite the large amount of emissions produced by shipping the coal such a long distance, our analysis shows that the total emissions would drop because of the superior energy efficiency of South Korea’s newer coal-fired power plants."
"This significant difference in results highlights the importance of analyzing domestic energy policies in the context of the global systems they affect."
Compromising climate change to preserve coal industry
The finding is not without issue though. While the exportation to South Korea could bring about a reduction in carbon emissions, without stringent international trade agreements,the coal could just as easily be end up sent elsewhere in the Asian market, like China, where the power plants are less efficient than the US.In that scenario, the carbon emissions would rise rather than fall. In addition, environmentalists argue that even the most efficient coal-fired power plants pollute the environment more than alternative power plants and that any short-term benefits would be overridden by the long-term delays to transitioning to cleaner methods of power generation.
But for the coal industry, the proposition is attractive, which is why Ambre Energy applied to build the terminal at the Port of Morrow used in the study. The project, which would have initially transported 3.5t tons of coal along the Powder River Basin, through the Columbia River and onto ocean freight vessels to South Korea, was promoted on the promise of creating more than 3,000 jobs in the locality.
The Oregon Department of State Lands however rejected the proposal on the grounds that it was "not consistent with the protection, conservation and best use of the state’s water resources" and that it could disrupt the fish population and industry.
Mary Abrams, DSL director, said: "We believe our decision is the right one, considering our regulatory parameters laid out in Oregon law, and the wealth of information we have received from the applicant and the public." Ambre Energy appealed the decision but was again denied. The state’s decision was welcomed by environmental groups, including Greenpeace, as a victory for the fight against climate change, but not all agreed that it was the right choice.
Coal industry unlikely to give up
Frank Wolak, professor of commodity price studies at Stanford University, said: "The only thing Oregon did is prevent the creation of good-paying jobs in the Powder River Basin coal region, high-paying jobs that don’t require an advanced degree. China’s continually built power plants. They’re not going to sink those costs and then shut them down."
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While Ambre Energy has been denied at its first attempt, its attempts to open up new routes to Asia continue. In a statement following the rejection, the company said: "Ambre Energy is focused on developing new port infrastructure in the US.S. to facilitate an emerging coal export and marketing business. Ambre will be able to guarantee the supply of high-quality US.S. coal to customers in Korea, Japan and the Asia Pacific region from its operations."
Plans to expand both the Millennium Bulk terminals as well asnd the Gateway Pacific Terminal in Washington State are currently being processed;, if they go through, the capacity to export US coal will be significantly increased, offering the industry a real chance to pursue growth in Asia.
The coal industry has experienced declining fortunes at home, but it remains in demand by those looking for the least costly fuel, and the industry now has the chance to build a narrative around the bizarre finding that it can emit less carbon when sold to a different continent.