Coal Going Away First

Solving global warming means burning less fossil fuel and use renewable sources instead. Most of the reserves need to stay in the ground.

That raises the question of which of the three big fossil fuels will be phased out first.

My bet is on coal.

Nobody runs cars on coal. That is a strategic advantage gas and oil have over coal.

Coal used to be the cheapest alternative because all the health and global climate costs conveniently left out of the balance sheet. Those days are over.

Coal has the highest CO2 cost.

And the opposition to coal is strongest. There is a “war on coal”, but not yet a “war on gas” or a “war on oil”.

Mike Grunwald describes this “war on coal” in detail in this recent article at Politico.

The Sierra Club “Beyond Coal” campaign has seen some success in stopping new coal power plant projects. And in retiring existing coal power plants. Their latest scoreboard shows 190 plants in the “retired” and 333 plants in the “to go” column.

Grunwald’s article quotes the campaign in closing like this:

“Once we’ve taken out coal, we’ll need to take on oil, and who better to help than our new friends in the utility sector who can make money from electrification?” Nilles says with a grin. “It’s a long fight. This is how we win.”

While it may be true that the reduction of coal use may go faster than that of gas or oil use, it will still take some time to move the numbers. It’s a long fight, as Nilles says.

The way for the coal industry to stay profitable under these circumstances would be to call for a cap on supply that is lower than what will happen under business as usual anyway. Make the market pay more per unit in exchange for accepting less units. Phaseout Profit Theory again.

And in the long run, look at ways of using coal as raw material for petrochemicals. At a lot higher prices per unit compared to now, of course. These are extremely valuable resources that have taken millions of years to form. The future coal industry should make the market pay a fair value for the fact that these raw materials can be used only once.

 

Published by kflenz

Professor at Aoyama Gakuin University, Tokyo. Author of Lenz Blog (since 2003, lenzblog.com).

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