Saturday, April 26, 2008

It's Not Just Peak Oil: It's Peak Coal, Too

Way back on October 30, 2007 I received this startling email from well-informed reader D.L.F.:
We always hear about "peak oil," but I ran across this article and chart for "peak coal:"
Appalachian Coal: the faucet is almost dry.

I was finally nudged into doing further research by frequent contributor Riley T., who sent in this link to energyshortage.org which tracks energy shortages worldwide.

Various pundits and cheerleaders in the media and the coal industry ceaselessly tout the "fact" that the U.S. supposedly has 400 years of coal supply, and hence (or so we are to assume) we don't need no stinkin' oil, we'll just burn coal. We can gasify it, using the same technology the Nazis deployed in World War II. (Why does that factoid leave us less than reassured?)
But a funny thing happened on the way to energy independence on the strong back of limitless coal: the Department of Energy reckons Appalachia has about 10-15 years of coal left. Oops. First, Peak Oil, then Peak Natural Gas, and now Peak Coal. Dang.

I hope you're not too surprised when I tell you Peak Coal isn't even the worst of it. Not even close. Details, details; don't you hate it when facts disrupt your rosy scenario? Facts like the railroads can't haul any more coal, and the price of coal is rising rapidly, with no end in sight. Talk about inconvenient realities.

Building more coal-fired power plants:big mistake; Environmental expert explains why investors and power companies getting fired up for coal growth will get burned financially:

The rising costs of plant construction and coal transportation are also a major factor: New cost estimates are far higher than the old cost estimates. Coal-fired power plants were expected to cost approximately $1 billion apiece to build, but the big ones are costing closer to $3 billion apiece. Early cost estimates looked at what would happen if each plant was built by itself, but if we build dozens at a time, the competition for engineers and steel and concrete becomes very acute. So there’s major international competition going on.

In terms of fuel price, a lot of these plants are being built because people estimated that the price of coal would be relatively low for years to come, but coal prices today are about twice what they were two years ago. And US coal is now being sold overseas—put on ships and taken to markets that really need it and are willing to bid a higher price than we’ve been used to seeing. That’s a problem especially because when analysts predict that these plants are cost-effective, they’re assuming 30-50 years to pay off the bonds raised to construct them. In other words, the plants only make sense if you think that the fuel will be accessible for the next 40-50 years.

Finally, the railroads needed to get coal from mines to power plants are already overloaded—they’re operating at over 90 percent capacity. We don’t have the rail system in place to carry all the coal that would be needed to build 60 or 80 new power plants, and building those railways is going to be very expensive."

Have you ever passed by a large coal-fired electrical generation plant? The first thing you notice is the long, seemingly endless line of rail cars lined up outside. That's because a typical large plant burns 4 million tons of coal a year. At $56/ton, that's $224,000,000 a year for the fuel. If that were to double--which industry experts are predicting--then the bill for one large coal-fired plant would top $500 million. Each. How "cheap" is that electricity now?
Surging Coal Price:
BHP Billiton is close to a deal with South Korean steel giant Posco for a price of $US300 ($325) a tonne for coking coal in 2008-09, up from $US97 in 2007-08.

Thermal coal, which is used for power stations rather than steel-making, is expected to more than double from its existing level of $US56 a tonne."

Despite the near-certainty of doubling/tripling prices, Peak Coal, emissions of sulfur dioxide (cause of acid rain), the world is so desperate to maintain the status quo that more plants are being built, even in Europe:

Europe Turns Back to Coal, Raising Climate Fears (NYT, April 23 2008)

Efforts to curb greenhouse-gas emissions have yet to dent enthusiasm for coal (The Economist)

Meanwhile, China is famously building a new coal-fired plant a week: Pollution From Chinese Coal Casts a Global Shadow.

In the event you are skeptical about coal price increases, please check the statistics gathered by the Energy Information Administration. The first column is for Central Appalachian coal (12,500 Btu), the second Northern Appalachian (13,000 Btu), the third, Illinois Basin (11,800 Btu) and the fourth Uinta Basin (11,700 Btu).

Please go to www.oftwominds.com/blog.html to view the tables and charts.

(The first two are metals grade, the second two thermal grade.)
Those are increases of 10% - 20% in three out of the four regions within the space of six weeks. If that isn't "spiraling out of control," then what is it? "Modest adjustment for inflation"? What happens to all those rosy predictions of "cheap electricity" if coal doubles in price and then doubles again?

And recall that prices are set internationally for commodities. If a U.S. producer can sell wheat for $13/bushel, do you reckon he or she will sell it in the U.S. for $6? The same pricing mechanism is in play for coal. If U.S. producers can sell coal overseas for $100/ton, that will be the price here, too.

That's capitalism, baby. There are no discounts just because you expected the price to stay "cheap" for decades to come.

So is that the worst? Not by a long shot. It seems that burning 700 million tons of coal every year to generate about 50% of the electricity in the U.S. is releasing 1,000 tons of radioactive uranium and thorium every year.

The irony is a wee bit thick, isn't it? Here we all are, convinced by ceaseless decades of propaganda (or shall we say "one-sided presentations"?) about dangerous, horrible nuclear plants, while all the while burning entire mountains of coal that's releasing 1,000 tons of radioactive material into our environment every year--1,000 tons more than the radioactive materials released by all the nuclear plants put together and twice as much as all the uranium fuel burned to make 15% of the electricity in the U.S.

(Let me note right here I know the problem with nuclear waste disposal/storage, and I am not suggesting nuclear power is a panacea; I am simply pointing out that 1,000 tons of radioactive material, on top of CO2 and sulfur dioxide does not make coal "clean" or "healthy" for the people living around the plants, or "cheap".)

Let's turn now to a fascinating report issued by the Oak Ridge National Laboratory. Since it's a nuclear facility, we can expect some kind words for nuclear power; nonetheless, the facts are the facts, and here are the facts. Burning coal produces stunning quantities of radioactive materials.

Coal Combustion: Nuclear Resource or Danger

"First, coal combustion produces carbon dioxide and other greenhouse gases that are suspected to cause climatic warming, and it is a source of sulfur oxides and nitrogen oxides, which are harmful to human health and may be largely responsible for acid rain. Second, although not as well known, releases from coal combustion contain naturally occurring radioactive materials--mainly, uranium and thorium.

The article "Radiological Impact of Airborne Effluents of Coal and Nuclear Plants" in the December 8, 1978, issue of Science magazine concluded that Americans living near coal-fired power plants are exposed to higher radiation doses than those living near nuclear power plants that meet government regulations. This ironic situation remains true today and is addressed in this article.

The fact that coal-fired power plants throughout the world are the major sources of radioactive materials released to the environment has several implications. It suggests that coal combustion is more hazardous to health than nuclear power and that it adds to the background radiation burden even more than does nuclear power. It also suggests that if radiation emissions from coal plants were regulated, their capital and operating costs would increase, making coal-fired power less economically competitive.

Because existing coal-fired power plants vary in size and electrical output, to calculate the annual coal consumption of these facilities, assume that the typical plant has an electrical output of 1000 megawatts. Existing coal-fired plants of this capacity annually burn about 4 million tons of coal each year.

Based on the predicted combustion of 2516 million tons of coal in the United States and 12,580 million tons worldwide during the year 2040, cumulative releases for the 100 years of coal combustion following 1937 are predicted to be:
U.S. release (from combustion of 111,716 million tons):
Uranium: 145,230 tons (containing 1031 tons of uranium-235)
Thorium: 357,491 tons
Worldwide release (from combustion of 637,409 million tons):
Uranium: 828,632 tons (containing 5883 tons of uranium-235)
Thorium: 2,039,709 tons
Consequently, the energy content of nuclear fuel released in coal combustion is more than that of the coal consumed! Clearly, coal-fired power plants are not only generating electricity but are also releasing nuclear fuels whose commercial value for electricity production by nuclear power plants is over $7 trillion, more than the U.S. national debt.

This figure is based on current nuclear utility fuel costs of 7 mils per kWh, which is about half the cost for coal. Consequently, significant quantities of nuclear materials are being treated as coal waste, which might become the cleanup nightmare of the future, and their value is hardly recognized at all.

How does the amount of nuclear material released by coal combustion compare to the amount consumed as fuel by the U.S. nuclear power industry? According to 1982 figures, 111 American nuclear plants consumed about 540 tons of nuclear fuel, generating almost 1.1 x 10E12 kWh of electricity. During the same year, about 801 tons of uranium alone were released from American coal-fired plants. Add 1971 tons of thorium, and the release of nuclear components from coal combustion far exceeds the entire U.S. consumption of nuclear fuels. The same conclusion applies for worldwide nuclear fuel and coal combustion."

So let's see: Peak Coal, prices skyrocketing with no end in sight, limited rail capacity to ship more coal, rising cost of transporting coal, intractable pollution/health problems, including a thousand tons of radioactive material released into the environment every year--what's not to like? Everything. Coal as savior? Not if you consider the financial and health-related issues.

Yes, it may be technologically feasible to scrub all the sulfur dioxide and all the radioactive particulates out of the millions of tons of coal ash and other combustion products released by the burning of 700 million tons of coal: but at what cost? If coal is no longer "cheap" even if you don't add in the health and environmental costs, then to call it cost-effective is delusional.

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