June 6, 2008
Coal will continue to be the engine that carries the nation forward. But it will have to be re-invented to comport with changing environmental and economic standards.
That is the tone set by the National Coal Council, which in a presentation to the U.S. Department of Energy says that "clean coal" will become the foundation of national energy policy. It provides energy security and economic prosperity -- all at a time when the global demand for power and gas is expected to continue rising.
The coal group has a tough job ahead. The international community is focused on reducing global warming pollution and on promoting the use of alternative fuels. As such, state regulators in this country are clamping down on proposed coal facilities while key investment bankers have said they will compute the cost of carbon emissions when deciding how much to charge for such loans.
But pragmatics suggests coal will remain central to both the U.S. and global economies. New ideas must therefore come to the fore, which will invariably lead to more inventive uses of coal. Market-based economies are built on the free flow of capital and the formation of new innovations. With the right incentives and under the proper conditions, enterprises will introduce relevant products and services. Innovation is needed in the energy sector, where fuel shortages and high prices rule the day.
To put the matter in perspective, this country comprises about five percent of the world population but uses about 30 percent of the energy. Clearly, China and India will be bidding on the same resources as the United States. Prices will invariably rise. In fact, the U.S. Energy Information Administration projects oil consumption to increase by a third through 2030 while electricity demand will rise by 50 percent over the next decade. Coal, now, provides more than half of the fuel used for electric generation.
"Coal is an essential part of the world's energy future," says Georgia Nelson, chair woman of PTI Resources and National Coal Council Chair. "Recent energy events remind us that much of the world remains behind the energy eight-ball. The urgency is reflected in $4 per gallon gas, families doing without essentials to keep the lights on, and more than 2 billion people around the world that lack adequate access to electricity or have no electricity at all."
The coal report, titled 'Coal: America's Energy Future,' points out that oil prices have risen from $56 per barrel in 2006 to more than $130 a barrel right now. That escalation not only affects transportation prices but it also increases cost of production for steel, materials and labor. Meantime, the rising demand for oil and natural gas also means that power generators and industrial plants will be hard up for basic feedstock that helps fuel the American economy.
Solutions Exist
Oil is the primary commodity that moves world markets. If oil prices go up by 100 units, natural gas costs would rise by 60 units while coal prices would increase by 40 units, say experts. A rise in oil prices provides the opportunity for all other commodities to demand more money. Coal is then left in the driver's seat because it is the cheapest and most abundant alternative. And the Energy Information Administration projects its use to climb over the next two decades.
Solutions exist, and many involve coal. There is coal-to-liquids, which is a technology that takes coal and breaks it down to form a fuel oil. While a lot cheaper per barrel than oil, it is an expensive undertaking -- one that necessitates oil prices stay high to motivate investors to risk their capital. And some of the most highly publicized undertakings are coal gasification plants, which are power facilities that are expected to cleanse all the impurities from coal before it is burned and sent out the smokestack.
"Like many other countries, the U.S. is experiencing population growth and economic expansion that is putting significant pressure on our electricity and energy supply," says Peabody Energy Senior Vice President Fred Palmer. "There is an urgent need to use our technological resources to tap the broad potential in clean coal. This includes using coal-to-liquid technologies as a national security imperative to provide an adequate fuel source for our military and civilian aviation industries."
At the same time, the Electric Power Research Institute and its utility and coal supporters tout the plug-in hybrid as a way to circumvent the gas pump. After years of research, the hope is that the first few vehicles that could be re-charged from a wall socket will be on the road by 2010.
The environmental community is skeptical of coal-based power. For starters, many say that the term "clean coal" is oxymoronic. Others, though, are willing to see if the pending technologies will bear fruit and namely the ability to capture and bury carbon dioxide that is tied to global warming. In the meantime, however, they are asking Congress to place mandatory restrictions on those emissions -- a view that bucks those held by most utility and coal companies. They are espousing voluntary rules until the technologies to permit such progress are commercialized.
Certainly, many viable options exist to help wean the global dependence on oil and natural gas. And, for better or worse, coal is one of them. "Once we get past the choosing of one fuel form over another, there are a lot of synergistic opportunities," such as blending coal with biomass, says Mike Eastman, technical analyst for the National Energy Technology Laboratory in Pittsburgh. "We can still improve the environment and we can still have a powerful economy."
At a time of rising energy demand, it would negligent to disregard coal's potential. But if the fuel source is to step up, the industries that burn it must be obligated to use the best available technologies to minimize emissions.
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