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September-October 2006 Vol. 40, No. 5

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Economics

A Bold Step Backward? Coal in the 21st Century
By Patrick Tucker

Technology is making a dirty fuel look new.

With so much talk about hydrogen solar, wind, and other alternative fuels, few people realize that the world's principal source of household energy remains the same as it was during the nineteenth century: coal. As the developing global economy hungers for more electricity, and as countries like the United States put greater emphasis on energy independence, the world's use of coal will only increase in the years ahead (around 1.5% per year, according to the World Coal Institute). If that increase isn't managed properly, the effects could be disastrous.

"The United States is more dependent on coal today than ever before. The average American consumes about 20 pounds of it a day. We don't use it to warm our hearths anymore, but we burn it by wire whenever we flip on the light switch or charge up our laptops," writes veteran journalist Jeff Goodell in his book, Big Coal: The Dirty Secret Behind America's Energy Future (Houghton Mifflin, 2006).

According to the World Coal Institute, 39% of the world's electricity comes from coal, and electricity use is on the rise. Goodell points out that U.S. coal consumption rose to more than a billion tons in 2005, an increase of 1.9% over 2004 when revenues for the industry stood at $260 billion. (By way of comparison, the rebuilding costs from Hurricane Katrina are estimated at $200 billion.) Goodell sees increased use of energy-hungry computers and other high-tech gadgets as the key force driving energy (thus coal) consumption in the United States. "We may not like to admit it, but our shiny white iPod economy is propped up by dirty black rocks," he writes.

The expanding high-tech gadget market is only one factor in the rise of coal usage worldwide. The Chinese economic boom is also fueled largely by this highly polluting but abundant fuel. The ill effects of that boom are making themselves known. Poor air quality is already creating health and agricultural problems throughout the region. In China and South Korea, roughly 355,000 people a year die from the effects of urban outdoor air pollution, according to the World Health Organization. Coal burning is also a leading source of mercury pollution and, of course, greenhouse gases such as carbon dioxide.

Ironically, global warming, to which coal consumption is a major contributor, is itself a driver of coal use. In his book, Goodell relates a conversation he had with a Chinese man in a recently drought-plagued province: "'People are very concerned about [global warming]. Seven or eight years ago, no one needed an air conditioner in Ürümqui. Now it is necessary. It is of course expensive, and it means burning more coal to create the electricity to power those air conditioners. It is a difficult situation. More power, more pollution, more power." Goodell refers to this circular phenomenon of higher-temperatures and greater coal use as the greenhouse spiral.

One of the most effective and practical solutions to the energy dilemma, according to Goodell, would be for coal-burning countries such as China and the United States to mandate that all new coal-powered plants use integrated gasification combined cycle, or IGCC, technology. Regular coal plants simply burn coal and release most of the pollution into the atmosphere, while IGCC plants convert the coal into a synthetic gas to burn in a turbine. Unlike other supposedly "clean coal" initiatives, IGCC, in combination with new technologies like scrubbers, could make coal virtually emissions free.

IGCC plants "are 10% more efficient than conventional coal plants, consume 40% less water, produce half as much ash and solid waste, and are nearly as clean burning as natural gas plants. But more important, it is far easier and cheaper to capture CO2 from coal at an IGCC plant than at a conventional coal plant," Goodell writes.

He estimates that, on a straight cost basis, an IGCC plant is 10% to 20% more expensive to build than a conventional plant, but added efficiency (and perhaps taxpayer subsidies) could mitigate most of those costs. To make IGCC the industry standard, Goodell recommends legislation to limit CO2 emissions from coal plants, with tax subsidies acting as positive reinforcement for the industry to develop IGCC facilities.

When it comes to other nations with different infrastructure needs, Goodell sees a separate set of solutions coming into play. For instance, in the case of China, more free-market competition and good regulations could help the nation bankroll cleaner energy initiatives. According to one Chinese dissident he spoke with, "I believe if anything is going to save China from an environmental catastrophe, it's capitalism."

While governments and the free market can play important roles in the public's response to coal pollution, Goodell reminds readers that it's up to them to examine their own consumption habits and demand better, both of industry and of themselves.

"We have to educate ourselves about the price of power and realize that there is nothing natural about the monopoly that the electric power companies--and by extension Big Coal--have over our lives," he writes.

The cost of implementing these and other proposals may seem high, but the price of not acting on coal pollution, particularly as we use more of it, may be far greater. In addition to the already high human costs from air pollution are the economic dangers posed by global warming--which threatens to drive up the price of disaster insurance and which may create drought conditions in the world's most economically vulnerable countries. On the surface, the problem is nothing if not daunting: The human race needs more energy to fuel development, but the only fuel abundant enough to meet our growing needs is poisonous, both for humans and for the climate.

Despite these challenges, Goodell sees cause for optimism: "The most valuable fuel for the future is not coal or oil, but imagination and ingenuity. We have reinvented our world before. Why can't we do it again?"

Just as our attitude toward coal runs both hot and cold, so future generations will surely question our continued reliance on a patently obsolete source of energy. After all, the mixed legacy of coal--progress, pollution, industrial capacity, and smog-filled skies--is our legacy as well.

In the end, the best we can hope for is that our posterity regards our infatuation with coal as a necessary phase, rather than as a disaster in the making.

Source: Big Coal: The Dirty Secret Behind America's Energy Future by Jeff Goodell. Houghton Mifflin. 2006. 336 pages. $25.95.

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