Matt Krupnick
THE GUARDIAN
Fri, November 26, 2021
Photograph: Radek Hofman/Alamy
When the coal-fired power plant just outside the tiny town of Nucla, Colorado, closed in 2019, it had the makings of a disaster.
The plant, which opened in 1959, shut down three years ahead of schedule when it ran out of coal, leaving the town shocked and facing the loss of its largest employer. The facility provided nearly half the tax revenue to the region, said Deana Sheriff, executive director of the West End Economic Development Corp, which serves Nucla and the surrounding area between Telluride and Grand Junction in western Colorado.
Left without vital funding for its fire department and school district, the town was terrified about its future.
We’re not going to die because one industry went away
Deana Sheriff
But despite the early plant closure, and an unemployment rate that more than doubled overnight, Nucla had done enough to prepare. The town has leaned on tourism, driven by outdoor activities, and the recent opening of dozens of small businesses to survive.
“Initially we saw a lot of frustration and concern, mostly about selling homes and folks moving away,” Sheriff said. But the town has adapted fairly well, she said: “We’ve diversified our economy enough that we’re not going to die because one industry went away.”
Increasingly outpaced by cheaper alternatives, including renewables, and under pressure from climate concerns, at least two dozen US coal power plants – many of them in small, rural communities – are expected to close or downsize in the next 10 years, as are most of the coalmines that supply them, according to the Environmental Protection Agency and experts. Most coal communities face the same challenges as Nucla: how to replace the jobs and tax dollars that have kept these towns afloat for decades?
In some cases, such as in Nucla, local officials started planning early. In others, the closures appear to have taken leaders by surprise.
The huge Navajo Generating Station in northern Arizona, within the Navajo Nation, also shut down in 2019. Local leaders complained that plant operators closed the facility decades ahead of schedule, although the region did have two years to prepare after the announcement. Little planning appears to have preceded the closure.
“What does ‘prepare’ mean?” said the Coconino county supervisor Lena Fowler. Regional leaders didn’t see many options for replacing the money and jobs as the closure loomed, she said.
The lack of preparation in Arizona – compounded by the subsequent pandemic that shut down tourism in the picturesque region near the Grand Canyon and a drought that has devastated the popular boating destination Lake Powell – has had dire consequences. Coconino county has lost $40m a year in property taxes since the plant, just outside the town of Page, closed, Fowler said. Families have been separated as one parent left for a job at another power plant, and there are concerns the Navajo Nation could cut essential services because of the tax losses.
Fri, November 26, 2021
Photograph: Radek Hofman/Alamy
When the coal-fired power plant just outside the tiny town of Nucla, Colorado, closed in 2019, it had the makings of a disaster.
The plant, which opened in 1959, shut down three years ahead of schedule when it ran out of coal, leaving the town shocked and facing the loss of its largest employer. The facility provided nearly half the tax revenue to the region, said Deana Sheriff, executive director of the West End Economic Development Corp, which serves Nucla and the surrounding area between Telluride and Grand Junction in western Colorado.
Left without vital funding for its fire department and school district, the town was terrified about its future.
We’re not going to die because one industry went away
Deana Sheriff
But despite the early plant closure, and an unemployment rate that more than doubled overnight, Nucla had done enough to prepare. The town has leaned on tourism, driven by outdoor activities, and the recent opening of dozens of small businesses to survive.
“Initially we saw a lot of frustration and concern, mostly about selling homes and folks moving away,” Sheriff said. But the town has adapted fairly well, she said: “We’ve diversified our economy enough that we’re not going to die because one industry went away.”
Increasingly outpaced by cheaper alternatives, including renewables, and under pressure from climate concerns, at least two dozen US coal power plants – many of them in small, rural communities – are expected to close or downsize in the next 10 years, as are most of the coalmines that supply them, according to the Environmental Protection Agency and experts. Most coal communities face the same challenges as Nucla: how to replace the jobs and tax dollars that have kept these towns afloat for decades?
In some cases, such as in Nucla, local officials started planning early. In others, the closures appear to have taken leaders by surprise.
The huge Navajo Generating Station in northern Arizona, within the Navajo Nation, also shut down in 2019. Local leaders complained that plant operators closed the facility decades ahead of schedule, although the region did have two years to prepare after the announcement. Little planning appears to have preceded the closure.
“What does ‘prepare’ mean?” said the Coconino county supervisor Lena Fowler. Regional leaders didn’t see many options for replacing the money and jobs as the closure loomed, she said.
The lack of preparation in Arizona – compounded by the subsequent pandemic that shut down tourism in the picturesque region near the Grand Canyon and a drought that has devastated the popular boating destination Lake Powell – has had dire consequences. Coconino county has lost $40m a year in property taxes since the plant, just outside the town of Page, closed, Fowler said. Families have been separated as one parent left for a job at another power plant, and there are concerns the Navajo Nation could cut essential services because of the tax losses.
The trio of concrete stacks at the Navajo Generating Station near Page, Arizona, being demolished on 19 December 2020. Photograph: George Hardeen/Navajo Generating Station/AP
A second Navajo power plant, Four Corners, is due to close in the next decade, as is the Cholla plant just outside the Nation. A nearby coalmine on the Hopi reservation, which supplied the Navajo Generating Station, has also closed. The Navajo Nation president, Jonathan Nez, did not respond to an interview request.
“The Nation didn’t do enough planning,” said Nicole Horseherder, a Navajo water rights activist who leads the Tó Nizhóní Ániup environmental non-profit. “They should have been planning for this the day the coal plant signed the leases. We can’t just be dependent on something we knew wasn’t going to last for ever.”
Cultural and regional differences have a huge bearing on how communities prepare and recover from a coal plant closure. Secluded towns that have relied on coal for decades – including power plant jobs that pay an average of $90,000 or more – can be reluctant to talk about a coal-free future. And don’t even bring up solar or wind power in some places.
“Renewables, for the workforce there, are the antichrist,” said Clint McRae, who owns the Rocker Six Cattle Company near the Colstrip coal power plant in Montana and is a member of the Northern Plains Resource Council, an advocacy group that fights for water quality protections. Some communities remain very loyal to coal and consider energy sources such as solar and wind as a threat to their way of life.
“It’s a very difficult subject to talk about over there. It’s going to take time to absorb in the community,” McRae said.
The Colstrip plant is scheduled to be retired in 2025, according to its operator’s latest estimates, and McRae and others worry about the pollution it will leave behind. Like other plants, Colstrip has been collecting coal ash – a toxic byproduct – in ponds. That pollution has seeped into the groundwater.
The Colstrip coal burning power plant in Colstrip, Montana, is scheduled to close by 2025.
Photograph: Matt Brown/AP
Coal ash can often be the most dangerous legacy of a closed plant. In 2014, 39,000 tons of ash and 27m gallons of contaminated water from a plant owned by Duke Energy that had closed two years earlier spilled into North Carolina’s Dan River.
Duke Energy has two other plants in North Carolina’s Person county that are expected to close within six years. Among those who have tried to get the community to transition its coal-based economy is state senator Mike Woodard, who admits it’s been a tough hill to climb in an area that has yet to accept the reality of coal’s future.
“Person county is going to have to accept that there’s a new way of doing business there,” said Woodard, a Democrat who helped negotiate the state’s recently enacted clean energy law. Renewable energy, not coal, is the future, he added. “We’re all going to be in the rowboat together and it would be great if we were rowing in the same direction.”
Some states have done better than others helping to row the boat. With a slew of coal closures coming to Colorado, the state has established an office to help communities plan for the transition.
Led by director Wade Buchanan, the Office of Just Transition has tried to steer local officials and residents away from the coal v renewables argument and to think about the transition in more economic terms. Buchanan compares the transition to that faced by timber communities in the Pacific north-west, which successfully transformed their economy when lumber mills began to close.
“I think we make a mistake thinking about this as uniquely coal-related or uniquely energy-related,” Buchanan said. “There is a cultural factor that makes it unique. But when you step back and think about how to transition away from this, there are other places that have relied on one industry or employer for a while.”
Buchanan pointed to Nucla as an example of how to manage that transition effectively, with more than 100 diverse small businesses opening in the area since the plant closed, thanks in part to tax breaks and other financial incentives. States and outsiders need to let rural communities figure out their own transitions, he said.
Related: When Wall Street came to coal country: how a big-money gamble scarred Appalachia
The Nucla area has leaned on its strengths to recover from the closure, Sheriff said. Residents are trying to open small bed and breakfasts rather than large hotels. Sheriff’s organization runs a grain mill for local businesses and is considering building a meat processing plant to make life easier for local ranchers. Other new businesses include catering companies, coffee shops, organic markets and ATV rentals.
Residents have made it clear they like Nucla’s quiet atmosphere, Sheriff said, and they don’t want to replace the coal plant with huge distribution centers or call centers or offices. “We’re not asking Google to come in and create a new tech location here,” she said. “It’s finding the right mixture of businesses that want that rural lifestyle. We’re isolated and we like it that way.”
The Nucla model isn’t always replicable in less picturesque areas. While western Colorado and the region near the Navajo Generating Station are obvious tourism destinations, it can be difficult for other communities to replace coal dollars with tourist dollars. Amanda Ormond, who formerly led the Arizona energy office and now is a director with the Western Grid Group, urged community leaders to think about their unique assets and then to research federal funding options to make the most of them and fill the gaps.
Then there’s the question of what to do with the sites of shuttered plants. Utilities across the country have discussed replacing coal plants with gas-powered plants, which has been criticized by activists who urge an end to fossil fuel use, while other plants have become college athletic facilities, restaurants and cannabis growing sites, according to Bloomberg.
Communities should look at non-energy possibilities for old power plants, relying on facilities already in place, Buchanan said. “There’s often railroad, water rights, transmission lines,” he said. “There’s a lot of energy infrastructure and that’s an asset to build on.”
Coal ash can often be the most dangerous legacy of a closed plant. In 2014, 39,000 tons of ash and 27m gallons of contaminated water from a plant owned by Duke Energy that had closed two years earlier spilled into North Carolina’s Dan River.
Duke Energy has two other plants in North Carolina’s Person county that are expected to close within six years. Among those who have tried to get the community to transition its coal-based economy is state senator Mike Woodard, who admits it’s been a tough hill to climb in an area that has yet to accept the reality of coal’s future.
“Person county is going to have to accept that there’s a new way of doing business there,” said Woodard, a Democrat who helped negotiate the state’s recently enacted clean energy law. Renewable energy, not coal, is the future, he added. “We’re all going to be in the rowboat together and it would be great if we were rowing in the same direction.”
Some states have done better than others helping to row the boat. With a slew of coal closures coming to Colorado, the state has established an office to help communities plan for the transition.
Led by director Wade Buchanan, the Office of Just Transition has tried to steer local officials and residents away from the coal v renewables argument and to think about the transition in more economic terms. Buchanan compares the transition to that faced by timber communities in the Pacific north-west, which successfully transformed their economy when lumber mills began to close.
“I think we make a mistake thinking about this as uniquely coal-related or uniquely energy-related,” Buchanan said. “There is a cultural factor that makes it unique. But when you step back and think about how to transition away from this, there are other places that have relied on one industry or employer for a while.”
Buchanan pointed to Nucla as an example of how to manage that transition effectively, with more than 100 diverse small businesses opening in the area since the plant closed, thanks in part to tax breaks and other financial incentives. States and outsiders need to let rural communities figure out their own transitions, he said.
Related: When Wall Street came to coal country: how a big-money gamble scarred Appalachia
The Nucla area has leaned on its strengths to recover from the closure, Sheriff said. Residents are trying to open small bed and breakfasts rather than large hotels. Sheriff’s organization runs a grain mill for local businesses and is considering building a meat processing plant to make life easier for local ranchers. Other new businesses include catering companies, coffee shops, organic markets and ATV rentals.
Residents have made it clear they like Nucla’s quiet atmosphere, Sheriff said, and they don’t want to replace the coal plant with huge distribution centers or call centers or offices. “We’re not asking Google to come in and create a new tech location here,” she said. “It’s finding the right mixture of businesses that want that rural lifestyle. We’re isolated and we like it that way.”
The Nucla model isn’t always replicable in less picturesque areas. While western Colorado and the region near the Navajo Generating Station are obvious tourism destinations, it can be difficult for other communities to replace coal dollars with tourist dollars. Amanda Ormond, who formerly led the Arizona energy office and now is a director with the Western Grid Group, urged community leaders to think about their unique assets and then to research federal funding options to make the most of them and fill the gaps.
Then there’s the question of what to do with the sites of shuttered plants. Utilities across the country have discussed replacing coal plants with gas-powered plants, which has been criticized by activists who urge an end to fossil fuel use, while other plants have become college athletic facilities, restaurants and cannabis growing sites, according to Bloomberg.
Communities should look at non-energy possibilities for old power plants, relying on facilities already in place, Buchanan said. “There’s often railroad, water rights, transmission lines,” he said. “There’s a lot of energy infrastructure and that’s an asset to build on.”
Coal's last boom? World's dirtiest fuel isn't being put out of business anytime soon
Bianca Bharti
Dancing on the edge of climate disaster: Why COP26 was both a triumph and a disaster
Energy crunch drives carbon to record as Europe burns more coal
The big switch: Meet the Alberta utility that pivoted to natural gas despite lure of cheap coal
Why China and India won’t quit coal
The pandemic helped make Mordy’s bet on coal a profitable one. Another unpredictable crisis, such as further waves of COVID-19 infections or more natural disasters, could force countries back into old, dirty habits.
“As long as coal production remains a big component of power generation and the ability to find a dispatchable source of electricity, I think the possibility of this happening in the future remains,” Blumenfeld said.
Financial Post
• Email: bbharti@postmedia.com | Twitter: biancabharti
_____________________________________________________________
Bianca Bharti
© Provided by Financial Post Commodity markets show coal remains very much in demand.
At the end of the climate conference in Glasgow, Scotland, Alok Sharma, president of the United Nations’ 26th Conference of the Parties (COP26), fought tears as he announced that 197 countries had only been able to agree to “phasing down” the use of coal, rather than “phasing out” one of the main sources of global warming.
“May I say to all delegates I apologize for the way this process has unfolded and I am deeply sorry,” Sharma, a minister in British Prime Minister Boris Johnson’s cabinet, said at the culmination of the two-week summit on Nov. 13.
China and India, each a big polluter with populations that exceed one billion people, refused at the last minute to commit to quitting coal. Sharma’s failure to secure a consensus to end coal’s reign wouldn’t have surprised anyone watching commodity markets. The pandemic has stirred up multiple economic forces that undermine the prevailing narrative that the dirtiest fuel source is on its way out.
“Is this the final market run for coal? I would say probably not,” Andrew Blumenfeld, who analyzes North American coal markets at IHS Markit, said in an interview.
Commodity markets show coal remains very much in demand. In October, the price of coal for delivery in northwest Europe surged by more than 300 per cent to US$231, compared with prices that were hovering around US$50 before the pandemic, according to McCloskey price assessments provided by IHS Markit. In southern China, prices spiked to US$251 from about US$80 in February 2020.
Few saw such a dramatic swing coming.
Until about a decade ago, thermal coal had been one of the predominant energy sources mined and burned to produce electricity and heat. In 2010, it made up nearly 45 per cent of the energy mix in the United States, compared with 25 per cent for natural gas, about 20 per cent for nuclear, eight per cent for hydro, and three per cent for wind, according to the U.S. Energy Information Administration (EIA).
EIA data for China and India is less comprehensive, but fossil fuels made up 80 per cent of their energy mix a decade ago, and most of that would have been coal, Blumenfeld said.
But as governments began taking climate change more seriously, and technological advances lowered the cost of cleaner energy sources, the overriding narrative was that greener politicians or market forces were well on their way to putting coal out of business.
For example, Ontario eliminated all coal-fired electricity in 2014 , primarily replacing the source of a quarter of its power with hydro and nuclear. Recent policy initiatives by the current Alberta government set the province on a course to close all coal power plants by 2023 — accelerating an earlier timeline of 2061 — and Nova Scotia, which relies on coal for more than 60 per cent of its electricity, is set to cut off coal by 2030, according to the Pembina Institute and Canada Energy Regulator .
In the U.S., natural gas became more economical than thermal coal beginning around 2008, Blumenfeld said. Stricter environmental regulations raised the costs associated with coal, giving natural gas an additional edge.
Natural gas took over coal’s place as the dominant fuel source by 2020, accounting for about 40 per cent of total energy, compared with 20 per cent for coal. (Wind climbed to 8.5 per cent, while solar entered the picture and represented about three per cent of the energy mix.)
At the end of the climate conference in Glasgow, Scotland, Alok Sharma, president of the United Nations’ 26th Conference of the Parties (COP26), fought tears as he announced that 197 countries had only been able to agree to “phasing down” the use of coal, rather than “phasing out” one of the main sources of global warming.
“May I say to all delegates I apologize for the way this process has unfolded and I am deeply sorry,” Sharma, a minister in British Prime Minister Boris Johnson’s cabinet, said at the culmination of the two-week summit on Nov. 13.
China and India, each a big polluter with populations that exceed one billion people, refused at the last minute to commit to quitting coal. Sharma’s failure to secure a consensus to end coal’s reign wouldn’t have surprised anyone watching commodity markets. The pandemic has stirred up multiple economic forces that undermine the prevailing narrative that the dirtiest fuel source is on its way out.
“Is this the final market run for coal? I would say probably not,” Andrew Blumenfeld, who analyzes North American coal markets at IHS Markit, said in an interview.
Commodity markets show coal remains very much in demand. In October, the price of coal for delivery in northwest Europe surged by more than 300 per cent to US$231, compared with prices that were hovering around US$50 before the pandemic, according to McCloskey price assessments provided by IHS Markit. In southern China, prices spiked to US$251 from about US$80 in February 2020.
Few saw such a dramatic swing coming.
Until about a decade ago, thermal coal had been one of the predominant energy sources mined and burned to produce electricity and heat. In 2010, it made up nearly 45 per cent of the energy mix in the United States, compared with 25 per cent for natural gas, about 20 per cent for nuclear, eight per cent for hydro, and three per cent for wind, according to the U.S. Energy Information Administration (EIA).
EIA data for China and India is less comprehensive, but fossil fuels made up 80 per cent of their energy mix a decade ago, and most of that would have been coal, Blumenfeld said.
But as governments began taking climate change more seriously, and technological advances lowered the cost of cleaner energy sources, the overriding narrative was that greener politicians or market forces were well on their way to putting coal out of business.
For example, Ontario eliminated all coal-fired electricity in 2014 , primarily replacing the source of a quarter of its power with hydro and nuclear. Recent policy initiatives by the current Alberta government set the province on a course to close all coal power plants by 2023 — accelerating an earlier timeline of 2061 — and Nova Scotia, which relies on coal for more than 60 per cent of its electricity, is set to cut off coal by 2030, according to the Pembina Institute and Canada Energy Regulator .
In the U.S., natural gas became more economical than thermal coal beginning around 2008, Blumenfeld said. Stricter environmental regulations raised the costs associated with coal, giving natural gas an additional edge.
Natural gas took over coal’s place as the dominant fuel source by 2020, accounting for about 40 per cent of total energy, compared with 20 per cent for coal. (Wind climbed to 8.5 per cent, while solar entered the picture and represented about three per cent of the energy mix.)
© Money Sharma/AFP via Getty Images A woman burns coal for domestic use at Singrauli in India’s Madhya Pradesh state on Nov. 18, 2021.
Even in China and India, where worsening air quality over the past decade has created major health and political issues, authorities appeared keen to end their dependence on coal.
Fossil fuels now make up about 66 per cent and 76 per cent of their energy mix, respectively. Renewables are growing, if slowly. Solar makes up four per cent of the supply for both countries, while wind makes up six per cent in China and five per cent in India.
However, government rhetoric about the urgency of a green transition hasn’t translated into enough investment in renewables to make coal redundant, at least not yet.
Storage capacity technology isn’t advanced enough to make wind and solar a reliable energy source, ensuring that coal remains part of the mix, even in countries with solid green reputations such as Germany, Blumenfeld said
Even in China and India, where worsening air quality over the past decade has created major health and political issues, authorities appeared keen to end their dependence on coal.
Fossil fuels now make up about 66 per cent and 76 per cent of their energy mix, respectively. Renewables are growing, if slowly. Solar makes up four per cent of the supply for both countries, while wind makes up six per cent in China and five per cent in India.
However, government rhetoric about the urgency of a green transition hasn’t translated into enough investment in renewables to make coal redundant, at least not yet.
Storage capacity technology isn’t advanced enough to make wind and solar a reliable energy source, ensuring that coal remains part of the mix, even in countries with solid green reputations such as Germany, Blumenfeld said
.
Further stoking the demand for coal was an especially cold winter last year in parts of the Northern Hemisphere, and unusually hot summers in the past couple of years, said Edward Gardner, a commodities economist at Capital Economics.
The global recovery from the COVID-19 crisis put even more pressure on energy supplies. China led the rebound, and because it remains a big user of coal, demand surged beyond existing supply. Miners hadn’t invested in new production because all indications were that demand was fading.
Extreme flooding in China, combined with stricter rules governing mine safety, added to supply constraints by hobbling the country’s domestic sources, forcing the country to enter international markets. Indonesia, another big coal producer, also suffered floods that forced mines to close, squeezing global stockpiles.
These factors — the weather, dwindling investment and a surprisingly strong recovery — created “the perfect storm” for prices and production to jump, Gardner said. And because these factors still persist, it suggests the market surge has exposed a gap between coal and renewables that could make kicking coal difficult.
“The last thing any country wants is to be short of electric power, especially in winter,” Blumenfeld said.
Natural gas prices also spiked this year due to a mismatch between demand and supply, forcing many countries to return to coal as a replacement for the cleaner fuel. But the U.S. and Russia have indicated they will increase supplies of natural gas, which could reduce demand for coal. Indeed, coal prices in northwestern Europe have plunged by 35 per cent from their October peak, and prices in southern China dropped 17 per cent.
Still, coal prices remain elevated compared to last winter. In the midst of power outages last month, China commanded its domestic producers to boost coal production and placed a cap on their prices in order to encourage utility companies to keep electricity flowing.
Though China promised to end financing of new coal power plants abroad at the UN General Assembly in September, it didn’t make immediate commitments that would curb domestic usage. It even still has domestic coal power plant projects in the pipeline, said Ilaria Mazzocco, fellow with the Trustee Chair in Chinese Business and Economics at the Center for Strategic and International Studies.
Further stoking the demand for coal was an especially cold winter last year in parts of the Northern Hemisphere, and unusually hot summers in the past couple of years, said Edward Gardner, a commodities economist at Capital Economics.
The global recovery from the COVID-19 crisis put even more pressure on energy supplies. China led the rebound, and because it remains a big user of coal, demand surged beyond existing supply. Miners hadn’t invested in new production because all indications were that demand was fading.
Extreme flooding in China, combined with stricter rules governing mine safety, added to supply constraints by hobbling the country’s domestic sources, forcing the country to enter international markets. Indonesia, another big coal producer, also suffered floods that forced mines to close, squeezing global stockpiles.
These factors — the weather, dwindling investment and a surprisingly strong recovery — created “the perfect storm” for prices and production to jump, Gardner said. And because these factors still persist, it suggests the market surge has exposed a gap between coal and renewables that could make kicking coal difficult.
“The last thing any country wants is to be short of electric power, especially in winter,” Blumenfeld said.
Natural gas prices also spiked this year due to a mismatch between demand and supply, forcing many countries to return to coal as a replacement for the cleaner fuel. But the U.S. and Russia have indicated they will increase supplies of natural gas, which could reduce demand for coal. Indeed, coal prices in northwestern Europe have plunged by 35 per cent from their October peak, and prices in southern China dropped 17 per cent.
Still, coal prices remain elevated compared to last winter. In the midst of power outages last month, China commanded its domestic producers to boost coal production and placed a cap on their prices in order to encourage utility companies to keep electricity flowing.
Though China promised to end financing of new coal power plants abroad at the UN General Assembly in September, it didn’t make immediate commitments that would curb domestic usage. It even still has domestic coal power plant projects in the pipeline, said Ilaria Mazzocco, fellow with the Trustee Chair in Chinese Business and Economics at the Center for Strategic and International Studies.
© Greg Baker/AFP via Getty Images A worker uses a torch to cut steel pipes near the coal-powered Datang International Zhangjiakou Power Station at Zhangjiakou, one of the host cities for the 2022 Winter Olympics, in China’s northern Hebei province.
At COP26, climate watchers had hoped Chinese President Xi Jinping would set a firm date when he reiterated the country’s pledge to reduce carbon emissions by 2030, but they were disappointed. The earliest China observers can expect a date on peaking emissions is 2026, when the government is set to release its next Five Year Plan on the direction of the economy.
“The Chinese leadership does seem very committed to decarbonization, but they’re also committed to doing it on China’s timeline,” Mazzocco said.
In the U.S., there isn’t a carbon emissions limit. Instead, federal agencies are slowly tackling the coal industry. The Environmental Protection Agency last month delivered a deadline to comply with new rules that would require generators to retrofit their facilities to clean their wastewater of toxic heavy metals by 2025. However, there’s a provision to allow power plants to remain online without retrofits, prolonging operations, until they are forced to shut down in 2028 for non-compliance.
Evidence of a quicker pulse in the coal industry might even rekindle investor interest, which could result in increased production, at least on the margins.
Tyler Mordy, chief executive at Forstrong Global Asset Management Inc. in Toronto, has exposure to coal through mixed-energy exchange-traded funds. He recognizes that coal is “a left-for-dead asset class,” but sees opportunity in fossil fuels overall.
At COP26, climate watchers had hoped Chinese President Xi Jinping would set a firm date when he reiterated the country’s pledge to reduce carbon emissions by 2030, but they were disappointed. The earliest China observers can expect a date on peaking emissions is 2026, when the government is set to release its next Five Year Plan on the direction of the economy.
“The Chinese leadership does seem very committed to decarbonization, but they’re also committed to doing it on China’s timeline,” Mazzocco said.
In the U.S., there isn’t a carbon emissions limit. Instead, federal agencies are slowly tackling the coal industry. The Environmental Protection Agency last month delivered a deadline to comply with new rules that would require generators to retrofit their facilities to clean their wastewater of toxic heavy metals by 2025. However, there’s a provision to allow power plants to remain online without retrofits, prolonging operations, until they are forced to shut down in 2028 for non-compliance.
Evidence of a quicker pulse in the coal industry might even rekindle investor interest, which could result in increased production, at least on the margins.
Tyler Mordy, chief executive at Forstrong Global Asset Management Inc. in Toronto, has exposure to coal through mixed-energy exchange-traded funds. He recognizes that coal is “a left-for-dead asset class,” but sees opportunity in fossil fuels overall.
Dancing on the edge of climate disaster: Why COP26 was both a triumph and a disaster
Energy crunch drives carbon to record as Europe burns more coal
The big switch: Meet the Alberta utility that pivoted to natural gas despite lure of cheap coal
Why China and India won’t quit coal
The pandemic helped make Mordy’s bet on coal a profitable one. Another unpredictable crisis, such as further waves of COVID-19 infections or more natural disasters, could force countries back into old, dirty habits.
“As long as coal production remains a big component of power generation and the ability to find a dispatchable source of electricity, I think the possibility of this happening in the future remains,” Blumenfeld said.
Financial Post
• Email: bbharti@postmedia.com | Twitter: biancabharti
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