It’s possible that I shall make an ass of myself. But in that case one can always get out of it with a little dialectic. I have, of course, so worded my proposition as to be right either way (K.Marx, Letter to F.Engels on the Indian Mutiny)
'Nothing else here:' Why it's so hard for world to quit coal
by Aniruddha Ghosal
An Indian laborer smiles as she takes a break from loading coal into a truck in Dhanbad, an eastern Indian city in Jharkhand state, Friday, Sept. 24, 2021. A 2021 Indian government study found that Jharkhand state—among the poorest in India and the state with the nation's largest coal reserves—is also the most vulnerable Indian state to climate change. Efforts to fight climate change are being held back in part because coal, the biggest single source of climate-changing gases, provides cheap electricity and supports millions of jobs. It's one of the dilemmas facing world leaders gathered in Glasgow, Scotland this week in an attempt to stave off the worst effects of climate change. Credit: AP Photo/Altaf Qadri
Every day, Raju gets on his bicycle and unwillingly pedals the world a tiny bit closer to climate catastrophe.
Every day, he straps half a dozen sacks of coal pilfered from mines—up to 200 kilograms, or 440 pounds—to the reinforced metal frame of his bike. Driving mostly at night to avoid the police and the heat, he transports the coal 16 kilometers (10 miles) to traders who pay him $2.
Thousands of others do the same.
This has been Raju's life since he arrived in Dhanbad, an eastern Indian city in Jharkhand state in 2016; annual floods in his home region have decimated traditional farm jobs. Coal is all he has.
This is what the United Nations climate change conference in Scotland, known as COP26, is up against.
Earth desperately needs people to stop burning coal, the biggest single source of greenhouse gases, to avoid the most catastrophic impacts of climate change—including the intense flooding that has cost agricultural jobs in India. But people rely on coal. It is the world's biggest source of fuel for electric power and so many, desperate like Raju, depend on it for their very lives.
"The poor have nothing but sorrow ... but so many people, they've been saved by coal," Raju said.
Mining is in progress at an open-cast mine near Dhanbad, an eastern Indian city in Jharkhand state, Friday, Sept. 24, 2021. Efforts to fight climate change are being held back in part because coal, the biggest single source of climate-changing gases, provides cheap electricity and supports millions of jobs. It's one of the dilemmas facing world leaders gathered in Glasgow, Scotland this week in an attempt to stave off the worst effects of climate change. Credit: AP Photo/Altaf Qadri
Alok Sharma, the United Kingdom's president-designate of the conference, said in May that he hoped the conference would mark the moment where coal is left "in the past where it belongs."
While that may be possible for some developed nations, it is not so simple for developing countries.
They argue they should be allowed the "carbon space" to grow as developed nations have, by burning cheap fuels like coal, which is used in industrial processes such as steelmaking along with electric power generation. On average, the typical American uses 12 times more electricity than the typical Indian. There are over 27 million people in India who don't have electricity at all.
Power demand in India is expected to grow faster than anywhere in the world over the next two decades as the economy grows and ever more extreme heat increases demand for air conditioning that so much the rest of the world takes for granted.
A woman is silhouetted as she carries a basket of coal scavenged from a mine near Dhanbad, an eastern Indian city in Jharkhand state, Friday, Sept. 24, 2021. A 2021 Indian government study found that Jharkhand state—among the poorest in India and the state with the nation's largest coal reserves—is also the most vulnerable Indian state to climate change. Efforts to fight climate change are being held back in part because coal, the biggest single source of climate-changing gases, provides cheap electricity and supports millions of jobs. It's one of the dilemmas facing world leaders gathered in Glasgow, Scotland this week in an attempt to stave off the worst effects of climate change. Credit: AP Photo/Altaf Qadri
Meeting that demand will not fall to people like Raju, but to Coal India, already the world's largest miner, which aims to increase production to over 1 billion tons a year by 2024.
D.D. Ramanandan, the secretary at the Centre of Indian Trade Unions in Ranchi said that conversations of moving beyond coal were only taking place in Paris, Glasgow or New Delhi. They had hardly begun in India's coal belt. "Coal has continued for 100 years. Workers believe it will continue to do so," he said.
The consequences will be felt both globally and locally. Unless the world drastically cuts greenhouse gas emissions the planet will suffer even more extreme heat waves, erratic rainfall and destructive storms in coming years, according to the Intergovernmental Panel on Climate Change.
And a 2021 Indian government study found that Jharkhand state—among the poorest in India and the state with the nation's largest coal reserves—is also the most vulnerable Indian state to climate change.
Indian laborers load coal into a truck in Dhanbad, an eastern Indian city in Jharkhand state, Friday, Sept. 24, 2021. A 2021 Indian government study found that Jharkhand state—among the poorest in India and the state with the nation's largest coal reserves—is also the most vulnerable Indian state to climate change. Efforts to fight climate change are being held back in part because coal, the biggest single source of climate-changing gases, provides cheap electricity and supports millions of jobs. It's one of the dilemmas facing world leaders gathered in Glasgow, Scotland this week in an attempt to stave off the worst effects of climate change. Credit: AP Photo/Altaf Qadri
But there are roughly 300,000 people working directly with government-owned coal mines, earning fixed salaries and benefits. And there are nearly 4 million people in India whose livelihoods are directly or indirectly linked to coal, said Sandeep Pai, who studies energy security and climate change at the Center for Strategic and International Studies in Washington.
India's coal belt is dotted by industries that need the fuel, like steel and brick making. The Indian railways, country's largest employers, earns half their revenue by transporting coal, allowing it to subsidize passenger travel.
"Coal is an ecosystem," Pai said.
For people like Naresh Chauhan, 50 and his wife Rina Devi, 45, India's economic slowdown resulting from the pandemic has intensified their dependence on coal.
The two have lived in a village at the edge of the Jharia coalfield in Dhanbad all their lives. Accidental fires, some of which have been blazing for decades, have charred the ground and left it spongey. Smoke hisses from cracks in the surface near their hut. Fatal sinkholes are common.
A young woman holds a torch in her mouth as she collects coal from a mine near Dhanbad, an eastern Indian city in Jharkhand state, Friday, Sept. 24, 2021. A 2021 Indian government study found that Jharkhand state—among the poorest in India and the state with the nation's largest coal reserves—is also the most vulnerable Indian state to climate change. Efforts to fight climate change are being held back in part because coal, the biggest single source of climate-changing gases, provides cheap electricity and supports millions of jobs. It's one of the dilemmas facing world leaders gathered in Glasgow, Scotland this week in an attempt to stave off the worst effects of climate change. Credit: AP Photo/Altaf Qadri
The couple earn $3 a day selling four baskets of scavenged coal to traders.
Families who've lived amid coal mines for generations rarely own any land they can farm and have nowhere else to go. Naresh hopes that his son would learn to drive so that he, at least, could get away. But even that may not be enough. There's less work for the city's existing taxi drivers. Wedding parties, who in the past reserved cars to ferry guests, have shrunk. Fewer travelers come to the city than before.
"There is just coal, stone and fire. Nothing else here."
That could mean even harder times for the people in Dhanbad as the world eventually does turn away from coal. Pai says this is already happening as renewable energy gets cheaper and coal becomes less and less profitable.
India and other countries with coal-dependent regions have to diversify their economies and retrain workers, he said—both to protect the livelihoods of workers and to help speed the transition away from coal by offering new opportunities.
Murti Devi, who scavenges coal for living, prepares a hearth fueled by coal at a village near Dhanbad, an eastern Indian city in Jharkhand state, Friday, Sept. 24, 2021. The 32-year-old single mother of four lost the job she had all her life when the mine she worked for closed four years ago. Nothing came of the resettlement plans promised by the coal company so she, like so many others, turned to scavenging coal. On good days, she'll make a dollar. On other days, she relies on neighbors for help. "If there is coal, then we live. If there isn't any coal, then we don't live," she said. Credit: AP Photo/Altaf Qadri
A truck loaded with coal drives past a stationary freight train carrying coal at Chainpur village near Hazaribagh, in eastern state of Jharkhand, Sunday, Sept. 26, 2021. A 2021 Indian government study found that Jharkhand state—among the poorest in India and the state with the nation's largest coal reserves—is also the most vulnerable Indian state to climate change. Efforts to fight climate change are being held back in part because coal, the biggest single source of climate-changing gases, provides cheap electricity and supports millions of jobs. It's one of the dilemmas facing world leaders gathered in Glasgow, Scotland this week in an attempt to stave off the worst effects of climate change. Credit: AP Photo/Altaf Qadri
A man climbs a steep ridge with a basket of coal scavenged from a mine near Dhanbad, an eastern Indian city in Jharkhand state, Friday, Sept. 24, 2021. A 2021 Indian government study found that Jharkhand state—among the poorest in India and the state with the nation's largest coal reserves—is also the most vulnerable Indian state to climate change. Efforts to fight climate change are being held back in part because coal, the biggest single source of climate-changing gases, provides cheap electricity and supports millions of jobs. It's one of the dilemmas facing world leaders gathered in Glasgow, Scotland this week in an attempt to stave off the worst effects of climate change. Credit: AP Photo/Altaf Qadri
A boy stands next to small pile of coal burning after scavenging from an open-cast mine near Dhanbad, an eastern Indian city in Jharkhand state, Thursday, Sept. 23, 2021. A 2021 Indian government study found that Jharkhand state—among the poorest in India and the state with the nation's largest coal reserves—is also the most vulnerable Indian state to climate change. Efforts to fight climate change are being held back in part because coal, the biggest single source of climate-changing gases, provides cheap electricity and supports millions of jobs. It's one of the dilemmas facing world leaders gathered in Glasgow, Scotland this week in an attempt to stave off the worst effects of climate change. Credit: AP Photo/Altaf Qadri
Light trails are left by passing traffic as they drive past the statue of an unknown coal miner in the middle of a square in Dhanbad, an eastern Indian city in Jharkhand state, Thursday, Sept. 23, 2021. A 2021 Indian government study found that Jharkhand state—among the poorest in India and the state with the nation's largest coal reserves—is also the most vulnerable Indian state to climate change. Efforts to fight climate change are being held back in part because coal, the biggest single source of climate-changing gases, provides cheap electricity and supports millions of jobs. It's one of the dilemmas facing world leaders gathered in Glasgow, Scotland this week in an attempt to stave off the worst effects of climate change. Credit: AP Photo/Altaf Qadri
Laborers load coal onto trucks for transportation near Dhanbad, an eastern Indian city in Jharkhand state, Friday, Sept. 24, 2021. A 2021 Indian government study found that Jharkhand state—among the poorest in India and the state with the nation's largest coal reserves—is also the most vulnerable Indian state to climate change. Efforts to fight climate change are being held back in part because coal, the biggest single source of climate-changing gases, provides cheap electricity and supports millions of jobs. It's one of the dilemmas facing world leaders gathered in Glasgow, Scotland this week in an attempt to stave off the worst effects of climate change. Credit: AP Photo/Altaf Qadri
Smoke hisses from the cracks in the ground as a villager holds his child in front of houses damaged due to subsidence near Dhanbad, an eastern Indian city in Jharkhand state, Friday, Sept. 24, 2021. A 2021 Indian government study found that Jharkhand state—among the poorest in India and the state with the nation's largest coal reserves—is also the most vulnerable Indian state to climate change. Efforts to fight climate change are being held back in part because coal, the biggest single source of climate-changing gases, provides cheap electricity and supports millions of jobs. It's one of the dilemmas facing world leaders gathered in Glasgow, Scotland this week in an attempt to stave off the worst effects of climate change. Credit: AP Photo/Altaf Qadri
A young woman carries a basket of coal scavenged from a mine near Dhanbad, an eastern Indian city in Jharkhand state, Thursday, Sept. 23, 2021. A 2021 Indian government study found that Jharkhand state—among the poorest in India and the state with the nation's largest coal reserves—is also the most vulnerable Indian state to climate change. Efforts to fight climate change are being held back in part because coal, the biggest single source of climate-changing gases, provides cheap electricity and supports millions of jobs. It's one of the dilemmas facing world leaders gathered in Glasgow, Scotland this week in an attempt to stave off the worst effects of climate change. Credit: AP Photo/Altaf Qadri
Members of coal workers' community fetch drinking water from a pipe at a coal depot near an open-caste mine in Dhanbad, an eastern Indian city in Jharkhand state, Friday, Sept. 24, 2021. A 2021 Indian government study found that Jharkhand state—among the poorest in India and the state with the nation's largest coal reserves—is also the most vulnerable Indian state to climate change. Efforts to fight climate change are being held back in part because coal, the biggest single source of climate-changing gases, provides cheap electricity and supports millions of jobs. It's one of the dilemmas facing world leaders gathered in Glasgow, Scotland this week in an attempt to stave off the worst effects of climate change. Credit: AP Photo/Altaf Qadri
A washerman uses coal to heat up iron in Dhanbad, an eastern Indian city in Jharkhand state, Saturday, Sept. 25, 2021. A 2021 Indian government study found that Jharkhand state—among the poorest in India and the state with the nation's largest coal reserves—is also the most vulnerable Indian state to climate change. Efforts to fight climate change are being held back in part because coal, the biggest single source of climate-changing gases, provides cheap electricity and supports millions of jobs. It's one of the dilemmas facing world leaders gathered in Glasgow, Scotland this week in an attempt to stave off the worst effects of climate change. Credit: AP Photo/Altaf Qadri
Naresh Chauhan, 50, his wife Rina Devi, 45 fill sacks with coal in Dhanbad, an eastern Indian city in Jharkhand state, Friday, Sept. 24, 2021. The two have lived in a village at the edge of the Jharia coalfield in Dhanbad all their lives. The couple earn $3 a day selling four baskets of scavenged coal to traders. For people like Chauhan and Devi, India's economic slowdown resulting from the pandemic has intensified their dependence on coal. Credit: AP Photo/Altaf Qadri
Restaurants along a food street use coal hearths in Dhanbad, an eastern Indian city in Jharkhand state, Saturday, Sept. 25, 2021. A 2021 Indian government study found that Jharkhand state—among the poorest in India and the state with the nation's largest coal reserves—is also the most vulnerable Indian state to climate change. Efforts to fight climate change are being held back in part because coal, the biggest single source of climate-changing gases, provides cheap electricity and supports millions of jobs. It's one of the dilemmas facing world leaders gathered in Glasgow, Scotland this week in an attempt to stave off the worst effects of climate change. Credit: AP Photo/Altaf Qadri
Flames rise out of the fissures in the ground above coal mines in the village of Liloripathra near Dhanbad, an eastern Indian city in Jharkhand state, Friday, Sept. 24, 2021. A 2021 Indian government study found that Jharkhand state—among the poorest in India and the state with the nation's largest coal reserves—is also the most vulnerable Indian state to climate change. Efforts to fight climate change are being held back in part because coal, the biggest single source of climate-changing gases, provides cheap electricity and supports millions of jobs. It's one of the dilemmas facing world leaders gathered in Glasgow, Scotland this week in an attempt to stave off the worst effects of climate change. Credit: AP Photo/Altaf Qadri
A laborer poses for a photograph while taking a break from loading coal into a truck in Dhanbad, an eastern Indian city in Jharkhand state, Friday, Sept. 24, 2021. A 2021 Indian government study found that Jharkhand state—among the poorest in India and the state with the nation's largest coal reserves—is also the most vulnerable Indian state to climate change. Efforts to fight climate change are being held back in part because coal, the biggest single source of climate-changing gases, provides cheap electricity and supports millions of jobs. It's one of the dilemmas facing world leaders gathered in Glasgow, Scotland this week in an attempt to stave off the worst effects of climate change. Credit: AP Photo/Altaf Qadri
Murti Devi, who scavenges coal for living, prepares a hearth fueled by coal at a village near Dhanbad, an eastern Indian city in Jharkhand state, Friday, Sept. 24, 2021. The 32-year-old single mother of four lost the job she had all her life when the mine she worked for closed four years ago. Nothing came of the resettlement plans promised by the coal company so she, like so many others, turned to scavenging coal. On good days, she'll make a dollar. On other days, she relies on neighbors for help. "If there is coal, then we live. If there isn't any coal, then we don't live," she said. Credit: AP Photo/Altaf Qadri
A truck loaded with coal drives past a stationary freight train carrying coal at Chainpur village near Hazaribagh, in eastern state of Jharkhand, Sunday, Sept. 26, 2021. A 2021 Indian government study found that Jharkhand state—among the poorest in India and the state with the nation's largest coal reserves—is also the most vulnerable Indian state to climate change. Efforts to fight climate change are being held back in part because coal, the biggest single source of climate-changing gases, provides cheap electricity and supports millions of jobs. It's one of the dilemmas facing world leaders gathered in Glasgow, Scotland this week in an attempt to stave off the worst effects of climate change. Credit: AP Photo/Altaf Qadri
Otherwise, more will end up like Murti Devi. The 32-year-old single mother of four lost the job she had all her life when the mine she worked for closed four years ago. Nothing came of the resettlement plans promised by the coal company so she, like so many others, turned to scavenging coal. On good days, she'll make a dollar. On other days, she relies on neighbors for help.
"If there is coal, then we live. If there isn't any coal, then we don't live," she said.
Australian thermal coal at Newcastle Port, the benchmark for the vast Asian market, has climbed 106% this year to more than $166 per metric ton, according to the latest weekly assessment by commodity price provider Argus.
The Newcastle weekly index, which stood at a 2020 low of $46.18 in early September, now appears to be closing in on an all-time high of $195.20 from July 2008.
The resurgence of thermal coal, which is burned to generate electricity, raises serious questions about the so-called “energy transition.”
A freight train transports coal from the Gunnedah Coal Handling and Prepararation Plant, operated by Whitehaven Coal Ltd., in Gunnedah, New South Wales, Australia, on Tuesday, Oct. 13, 2020. David Gray | Bloomberg | Getty Images
LONDON — Soaring electricity demand, infrastructure woes and a surge in global gas prices have triggered an extraordinary rally for the world’s least liked commodity.
Australian thermal coal at Newcastle Port, the benchmark for the vast Asian market, has climbed 106% this year to more than $166 per metric ton, according to the latest weekly assessment by commodity price provider Argus.
The Newcastle weekly index, which stood at a 2020 low of $46.18 in early September, now appears to be closing in on an all-time high of $195.20 from July 2008. Its South African equivalent, the Richards Bay index, ended the week through to Aug. 13 at $137.06 per metric ton, up more than 55% this year.
To put thermal coal’s remarkable rally into some context, international benchmark Brent crude is one of few assets to have recorded comparable gains this year. The oil contract is up 33% year-to-date.
The resurgence of thermal coal, which is burned to generate electricity, raises serious questions about the so-called “energy transition.” To be sure, coal is the most carbon-intensive fossil fuel in terms of emissions and therefore the most important target for replacement in the pivot to renewable alternatives.
Yet, as policymakers and business leaders repeatedly tout their commitment to the demands of the deepening climate emergency, many still rely on fossil fuels to keep pace with rising power demand.
It comes shortly after the world’s leading climate scientists delivered their starkest warning yet about the speed and scale of the climate crisis. The Intergovernmental Panel on Climate Change’s landmark report, published Aug. 9, warned a key temperature limit of 1.5 degrees Celsius could be broken in just over a decade without immediate, rapid and large-scale reductions in greenhouse gas emissions.
U.N. Secretary-General, António Guterres, described the report’s findings as a “code red for humanity,” adding that it “must sound a death knell for coal and fossil fuels before they destroy our planet.”
Earlier this year, Guterres pushed for all governments, private companies and local authorities to “end the deadly addiction to coal” by scrapping all future global projects. The move to phase out coal from the electricity sector was “the single most important step” to align with the 1.5-degree goal of the Paris Agreement, he said.
Outlook for thermal coal prices
Yulia Buchneva, director in natural resources at Fitch Ratings, told CNBC that thermal coal remains a key global energy source, noting the commodity still has a more than 35% share in global power generation.
“We expect that the share of coal in energy generation will decline driven by the energy transition agenda, however this will have a rather longer-term impact on the market. In the medium-term demand for coal in emerging markets with less strict environmental agenda, in particular in India, Pakistan, and Vietnam, where coal-fired power dominates generation, is expected to rise,” Buchneva said.
By comparison, Buchneva said that since the U.S. and EU account for only 10% of worldwide demand for coal, an expected contraction in these regions would have a limited impact on the global market.
When asked whether thermal coal prices could push even higher in the coming months, Buchneva replied: “The current high thermal coal prices have decoupled from costs and are therefore not sustainable. We expect that prices will normalize during the remainder of the year.”
Fitch Ratings assumes the price of high energy Australia coal will decline toward $81.
A bucket-wheel reclaimer stands next to a pile of coal at the Port of Newcastle in Newcastle,
New South Wales, Australia, on Monday, Oct. 12, 2020. David Gray | Bloomberg | Getty Images
Energy analysts cited a variety of reasons for thermal coal’s breakneck rally. These included rebounding power demand in China, Beijing’s informal ban on coal imports from Australia, supply disruptions in Australia, South Africa and Colombia, and rising global gas prices.
For the latter, analysts at Argus said Europe had incurred unseasonably low gas storages, weak liquified natural gas imports and modest pipeline imports from Russia. It has coincided with gas prices rising more sharply than coal and thus led to an increased incentive to burn coal at the expense of gas for power generation.
“Coal as an expensive substitute, especially in Europe given the need to buy pollution offsets via emission futures, is likely to continue into the winter period,” Ole Hansen, head of commodities research at Saxo Bank, told CNBC via email.
“This in response to low gas stock levels both in the US and Europe following a high demand season driven by extreme heat and economic activity,” he continued. “All in all, coal is in demand despite raised focus on climate change.”
Hansen said this was simply due to the lack of supplies from coal’s biggest competitor: natural gas. Financing coal projects to become more difficult
“I’m reluctant to get into how this is going to continue to play out over the next few months. I think things are fairly fluid in terms of the impact of the virus on various economies and it doesn’t take much of a slowdown for things to really start impacting a commodity like coal,” Seth Feaster, energy data analyst at IEEFA, a non-profit organization, told CNBC via telephone.
“One thing I can say is that prices have been very volatile. And from a U.S. perspective, when coal companies talk about exports being their savior, we find that pretty suspect because volatility makes it very difficult for coal companies to have any kind of long-term plan around thermal coal exports.”
Smoke and steam rises from the Bayswater coal-powered thermal power station located near the central New South Wales town of Muswellbrook, New South Wales, in Australia. David Gray | Getty Images News | Getty Images
Feaster said that while some countries appeared hesitant to move away from coal, it is becoming “abundantly clear” that financing for coal projects is drying up. “It is going to be very difficult going forward to fund any kind of new power projects for coal,” he continued.
“I think that that’s really going to become a pariah around the world for anybody to finance coal projects. It is going to become more expensive and more difficult.”
US coal exports on the mend despite mixed long-term outlook
The amount of coal shipped from U.S. shores rose during the second quarter, buoyed by robust demand from international markets, particularly in Asia.
Exports of U.S. coal jumped 52.5% year over year to 20.6 million tonnes in the June quarter from 13.5 million tonnes, according to an S&P Global Market Intelligence analysis.
In 2020, the COVID-19 pandemic caused electricity consumption to tank, decimating demand for U.S. coal. But the economic recovery in 2021, combined with stronger international coal demand, especially from China, has led to a resurgence in coal exports. What is more, low investment in coal over roughly the past decade made it challenging for the industry to keep supply on pace with demand when markets did recover.
"When you put that all together, these factors have created — at least for the time being — a better environment for the U.S. coal industry, particularly Eastern producers that are able to export," said Benjamin Nelson, global lead analyst for coal at Moody's Investors Service.
Of the top 10 U.S. ports analyzed by Market Intelligence, only two recorded year-over-year declines in seaborne shipments: the ports in Mobile, Ala., and Seattle. The remaining eight ports booked increased second-quarter shipments compared to the same quarter of 2020.
Coal shipments from New Orleans, which exports a significant amount of Illinois Basin coal, surged in the second quarter to 2.8 million tonnes, 398.5% more than in the same quarter in 2020.
"With coal prices up, a lot of Illinois Basin coal production can now be reasonably exported again," Nelson told Market Intelligence. "That helps explain why exports from New Orleans' ports were up so much during the quarter. It's a function of where that coal is coming from and what is going on there."
A significant portion of the country's metallurgical coal, a primary ingredient in steelmaking, departed from Norfolk, Va., during the three-month period. Producers shipped about 6.2 million tonnes of metallurgical coal from Norfolk, a 31.7% increase from the 4.7 million tonnes of metallurgical coal exported during the second quarter of 2020.
Total coal export volumes from Baltimore also jumped during the June quarter, by 101.5% year over year to total 5.1 million tonnes. Producers in Northern and Central Appalachia service ports in Baltimore and Norfolk.
Help from China
As domestic demand for U.S. thermal coal wanes, several major coal operators have their eyes on supplying international markets. Coal companies shipped an average of 12.1 million tonnes of coal from the U.S. during each week of June, about 47% more than in June 2020, according to a Market Intelligence report by analyst Steve Piper.
U.S. coal exports could reach 90 million tons by the end of 2021, an increase of approximately 30% from 2020, according to the U.S. Energy Information Administration's Aug. 10 short-term energy outlook.
"High global steel prices are driving these increases in coal exports, and trade tensions between China and Australia continue to support U.S. thermal coal exports," the report stated.
The U.S. saw a boom in coal demand from China at the end of 2020 after an unofficial ban on Australian coal imports pressured buyers to turn to comparable sources. U.S. exports of coal to China spiked 251.8% year over year in the final three months of 2020.
Pennsylvania-based Consol Energy Inc.'s total coal shipments soared during the second quarter, increasing to 5.9 million tonnes, from 2.3 million tonnes during the year-ago quarter, on the back of strong demand from seaborne markets, according to the company.
"We continue to focus on our strategy of further reducing our exposure to a declining U.S. coal market for power generation with a heightened focus on increasing our industrial business," Consol Energy CEO and President James Brock said during an Aug. 3 earnings call. "We have seen sustained improvements in the seaborne thermal coal market since the end of the third quarter of 2020."
British Columbia-based Teck Resources Ltd. said the favorable price environment for exports of coal to China boosted the company's second-quarter earnings. Of the 6.2 million tonnes of steelmaking coal sold during the June quarter, about 2 million tonnes went to China "at significantly higher prices than FOB Australia prices," the company stated in its earnings report.
"We will continue to prioritize available spot sales volumes to China, which is expected to continue to result in favorable price realization," CEO and President Donald Lindsay said during a July 27 earnings call.
The U.S. thermal coal sector will continue its structural decline in 2022, according to Nelson. Although coal export volumes are likely to grow in 2022, domestic consumption of coal will ultimately fall more than exports will rise.
Thursday, November 23, 2023
FutureCoal CEO Suggests ‘Cancel Coal’ Mantra Is Short-Sighted, Abated Coal Solutions Must Be Part of Energy Transition
Formerly known as the World Coal Association, FutureCoal: The Global Alliance for Sustainable Coal The group’s rebranding was launched this week.
Aaron Larson Wed, November 22, 2023
Speaking at the 5th annual India Coal Conference in New Delhi, FutureCoal CEO Michelle Manook said, “Government and finance policies, which embrace a ‘cancel coal’ mantra, are short-sighted and undermine the very ambitions we seek to achieve as a global community.” Formerly known as the World Coal Association, FutureCoal: The Global Alliance for Sustainable Coal is a multi-lateral organization representing the entire coal value chain including coal producers, suppliers, and consumers such as power, steel, cement, and aluminum industry companies. The group’s rebranding was launched this week. “The reality is, coal will be here for the foreseeable future, and the future of coal beyond combustion gains steady momentum. As a coal value chain, we need to transform, unite, and ensure that a responsible narrative informs global policy setting,” said Manook (Figure 1). “We need to reframe this debate to the reality. There is no legitimate reason for coal not to participate in any energy transition. Abated coal solutions exist and they must be embraced.”
1. FutureCoal CEO Michelle Manook. Courtesy: FutureCoal[/caption]
FutureCoal says coal’s enduring presence acknowledges countries’ autonomy in selecting energy sources that meet their specific needs, complementing renewables during intermittent periods and serving as a crucial factor for coal-dependent nations to ensure energy security, affordability, and reliability. The group points to the global energy crisis of 2021–2023 as a case in point for the importance of coal. FutureCoal noted the resilience of coal as a power generation source mitigated severe consequences that could have escalated without coal as a backup. “The closure of European industrial operations and the risk of populations suffering through unaffordable energy costs or no energy at all exemplifies the crucial role of coal,” FutureCoal said. According to the International Energy Agency’s (IEA’s) most recent Coal Market Update, issued in July 2023, a new record global high of 10,440 TWh of electricity was generated from coal in 2022. This figure represented 36% of the world’s total electricity generation. While many industry observers believe coal use in the electricity sector will decline substantially in coming decades, FutureCoal says some experts predict coal will remain the single largest source of electricity worldwide through 2040. “Despite the growing emphasis on renewable energy sources, coal remains a key player due to its abundance, cost-effectiveness, and established infrastructure in many countries,” the group said. Coal does play an important role in the energy supply of more than 80 countries, not only in terms of electricity, but also for heat production. In many countries, coal is used for residential heating during colder months from district heating systems supplied by coal-fired combined heat and power (CHP) plants. FutureCoal says while the focus is often on electricity generation, “it’s important to remember that coal’s contribution to global heat supply is also significant.” FutureCoal said coal abatement technologies can capture up to 99% of some harmful emissions. Existing coal abatement technologies include a range of efficient solutions that support both power and heat utilities. These include high-efficiency and low-emissions (HELE) plants such as ultrasupercritical (USC) units; CHP facilities; integrated gasification combined cycle (IGCC)-based technology; and co-firing coal with biomass. To achieve high rates of emission control, sulfur dioxides (SOx), nitrogen oxides (NOx), and particulate matter (PM) can all be captured to various degrees, and the waste byproducts reused in industry and construction. Other emissions, such as heavy metals, can also be captured to a large extent and safely managed. While FutureCoal does not focus greatly on carbon capture and storage (CCS) or carbon capture, utilization, and sequestration (CCUS), it does promote a Sustainable Coal Stewardship (SCS) program. SCS has a strong focus on abated coal innovation and technologies. Under SCS, abated coal has a broader definition. “It encompasses a range of responsible practices, emissions controls, efficiency gains, and advanced coal opportunities,” FutureCoal says. Many power industry insiders believe hydrogen (H2) is poised to play a pivotal role in the transition to cleaner energy resources. Surprisingly, FutureCoal says hydrogen can be produce more cheaply with coal than through other sources. “The cost of producing hydrogen from coal with CCUS [is] three times less expensive than producing low-carbon hydrogen through water electrolysis,” the group said. Specifically, it said electrolysis costs from $3 to $7.50 per kilogram (kg) of H2 produced, while the IEA reportedly pegs the average cost of producing hydrogen from coal with CCUS at $1.40–$3.10/kg H2. Meanwhile, FutureCoal said another source suggests that coal gasification with CCUS typically costs $1.90−$2.40/kg H2, with costs as low as $1.60/kg H2 in China. And clean coal-to-hydrogen projects are not just a concept. The world’s largest coal-to-hydrogen project was placed in operation in Yulin, central Shaanxi, China, in September last year. The plant boasts a total hydrogen production capacity of 350,000 tonnes annually and is expected to reduce carbon dioxide emissions by approximately 220,000 tonnes annually. “The conversion of coal to hydrogen represents an innovative application of coal abatement technologies. It simultaneously assists coal-dependent nations in achieving their development goals and decarbonization ambitions,” FutureCoal said. “A misinformed coal narrative, misinforms the market. This narrative must be corrected if we are to achieve global economic and sustainability goals,” Manook said.
—Aaron Larson is POWER’s executive editor (@POWERmagazine).
