Kellow: The Surprisingly Sustainable Case for Coal

ST. LOUIS, MO (March 14, 2019) – Peabody President and CEO Glenn Kellow recently published a column entitled “The Surprisingly Sustainable Case for Coal” in conjunction with his participation at CERAWeek:
Amid a fuel that is so often miscast as a Hollywood villain, I’d like to briefly lay out what I would call the surprisingly sustainable case for coal … with three key observations. 
First Observation: The story of global energy is not one of good versus evil. It is a tale of the pursuit of two “goods” – affordable, reliable energy and reduced emissions. Maximizing the benefits while minimizing the costs are what so many of us are about every single day. 
First, the basics: The world uses some 8 billion tons of coal per year. A bit more than one out of every four units of energy in the world comes from coal – and the International Energy Agency (IEA) has noted that this share has actually edged up in the past four decades – and off of a much larger base. 
For the first time ever in 2018, global coal-fueled generating capacity topped 2,000 gigawatts (GW). That’s a massive 62% increase since the year 2000 … and each GW can use about 3 million tons of coal per year. Some 300 GW of new coal-fueled generation is under construction in Asia alone – more than the entire existing U.S. coal fleet. More than 40 nations have added coal-fueled generation since 2010.
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Seaborne Coal Demand Outweighs Trade Concerns

CLEARWATER, FL (March 7, 2019) – International hunger for higher-heat coal is supporting demand for US resources, but concerns about Washington’s ongoing trade tensions with other countries remain, participants at the American Coal Council’s 2019 Spring Coal Forum said today.
“The trade war is bad for energy, period. You lose market access and market development while creating economic friction,” energy research firm Clearview Energy Partners managing director Kevin Book said. While trade concerns are easing “they are not going away entirely.”
Coal exports as a percentage of US production were at their highest level in 35 years last year, S&P Global Platts coal analytics director Joe Aldina said. And buyers are absorbing the additional costs associated with tariffs.
Demand in 2018 for the US’ high-Btu coal was nearly double that of 2016, said Ted O’Brien, US coal trader Xcoal Energy and Resources’ manager of capital markets and marketing. While Indonesia was responsible for most of the global trade growth in 2018, the country’s resources are largely low-grade coal and lignite, he said.
The demand for higher-quality coal likely will continue through 2020 and support exports, despite the current downtick in API 2 prices, O’Brien said.
O’Brien pointed to Asia, where “real demand growth is happening.”
Demand in China and India remains strong. China continues to show demand for US metallurgical coal with the full knowledge that buyers will have to absorb a 28pc tariff, O’Brien said. He added that coal will likely become a bargaining chip for China as trade talks continue. 

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The ‘New Energy Economy’: An Exercise in Magical Thinking

By Mark P. Mills
Manhattan Institute
NEW YORK (March 26, 2019) – A movement has been growing for decades to replace hydrocarbons, which collectively supply 84% of the world’s energy. It began with the fear that we were running out of oil. That fear has since migrated to the belief that, because of climate change and other environmental concerns, society can no longer tolerate burning oil, natural gas, and coal—all of which have turned out to be abundant.
So far, wind, solar, and batteries—the favored alternatives to hydrocarbons—provide about 2% of the world’s energy and 3% of America’s. Nonetheless, a bold new claim has gained popularity: that we’re on the cusp of a tech-driven energy revolution that not only can, but inevitably will, rapidly replace all hydrocarbons.
This “new energy economy” rests on the belief—a centerpiece of the Green New Deal and other similar proposals both here and in Europe—that the technologies of wind and solar power and battery storage are undergoing the kind of disruption experienced in computing and communications, dramatically lowering costs and increasing efficiency. But this core analogy glosses over profound differences, grounded in physics, between systems that produce energy and those that produce information.

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In Letter to AOC Big Labor Says Green New Deal Would Cause ‘Immediate Harm’ to Union Workers

By Louis Casiano
Fox News
WASHINGTON, DC (March 14, 2019) – The AFL-CIO, which represents 12.5 million union workers, outlined its opposition to the proposal in a recent letter to its leading sponsors: U.S. Sen. Ed Markey, D-Mass., and U.S. Rep. Alexandria Ocasio-Cortez, D-N.Y.
“We welcome the call for labor rights and dialogue with labor, but the Green New Deal resolution is far too short on specific solutions that speak to the jobs of our members and the critical sections of our economy,” the AFL-CIO Energy Committee told the congresswoman and the senator in a letter dated March 8.
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The Case Against a Carbon Tax 

By Jordan McGillis
Institute for Energy Research
Image result for IERWASHINGTON, DC (April 2019) – In early 2019 the Congressional Progressive Caucus has sought to shift the Overton window for energy and environmental policy. February’s resolution “recognizing the duty of the Federal Government to create a Green New Deal” communicates a consistent, if nebulous, view: government must dictate our energy choices to us, lest we careen toward environmental disaster. Short on specific mechanisms, the Green New Deal is not so much a concrete policy proposal, but rather a repudiation of capitalism as such. In response, various conservatives, libertarians, Republicans, and others who tend to support a free-market economic system have groped for an answer of their own to the climate change question. While some are proposing subsidizing their pet technologies, others—the more intellectually ambitious—are coalescing around the carbon tax.
Unlike support for the Green New Deal, support for a carbon tax does not necessarily arise from categorical opposition to capitalism, but often arises from a concern that the burning of coal, oil, and natural gas—despite the benefits—in some way jeopardizes our future. With its mimicking of a price system, the carbon tax offers a less flagrant, more sophisticated means of economic intervention than the Green New Deal’s command-and-control approach. Some carbon tax proponents go so far as to claim that a carbon tax is a means of “unleash(ing) the power of our free enterprise system.” This optimism is unfounded. Carbon taxes are nonobjective, they are coercive, and they are impediments to prosperity. As this paper will make clear, the carbon tax lacks merit as a public policy.
This paper comprises six core points against the carbon tax:

  • Carbon taxes are set arbitrarily.
  • The climate change mitigation goals of the world’s leading political bodies are at odds with the climate economics literature.
  • A U.S. tax-and-rebate plan would slow economic growth.
  • Carbon taxes have unexpected, adverse tax effects.
  • A U.S. carbon tax would be irrelevant.
  • A U.S. carbon tax that would replace existing regulations and/or taxes is not politically viable.
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Trump Signs Orders Targeting States’ Power to Slow Energy Projects

By Jeff Mason and Timothy Gardner
CROSBY, TX and WASHINGTON, DC (April 9, 2019) – President Donald Trump signed two executive orders in the heart of the Texas energy hub on Wednesday targeting the power of states to delay natural gas, coal and oil projects as he looks to build support ahead of next year’s election.
Trump’s orders direct his Environmental Protection Agency to change a part of the U.S. clean water law that has allowed states to delay projects on environmental grounds. New York has delayed pipelines that would bring natural gas to New England, for example, and Washington state has stopped coal export terminals.
“My action today will cut through destructive permitting delays and denials ... what takes you 20 years to get a permit, those days are gone,” said Trump, surrounded by workers in hard hats and yellow vests.
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Gordon, Enzi Applaud Trump Energy Orders

By Staff
Gillette News Record
GILLETTE, WY (April 9, 2019) – Wyoming Gov. Mark Gordon is hailing a pair of executive orders signed by President Donald Trump that aim to make it more difficult for states to block pipelines and other energy projects because of environmental concerns.
The move is an important one for Wyoming, which is blocked from exporting coal to Asian markets because Washington state has repeatedly denied a coal export port because of coal’s impact on the environment.
“I am delighted President Trump issued his Executive Order directing the Environmental Protection Agency to modernize guidance on the application of section 401 of the Clean Water Act,” Gordon said. “I stand with governors across the land in asserting our states’ rights to access markets foreign and domestic as well as to protect the water, air and environment of our respective states.”
He said Trump’s order recognizes that “states along the West Coast have abused their authority … to unfairly discriminate against Wyoming coal.”
It also “sets the stage to help correct the misapplication of the Clean Water Act that has been used inappropriately by some states to stymie the industries and commerce of others, and I commend him for that,” the governor said.
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Department of Energy Announces $87 Million for Coal Research and Development Projects

U.S. Department of Energy
WASHINGTON, DC (April 10, 2019) – Today, the U.S. Department of Energy (DOE) announced up to $87.3 million in federal funding for cost-shared research and development (R&D) projects for advanced coal technologies and research. DOE Assistant Secretary for Fossil Energy Steven Winberg announced this R&D funding at the Annual Project Review Meeting for Crosscutting, Rare Earth Elements, Gasification, and Transformative Power Generation at the National Energy Technology Laboratory.
“Coal-fueled power plants are a significant source of electrical power generation in the United States. The goal with these projects is to ensure that the United States can have a fleet of coal-fired power plants that provides stable power generation with operational flexibility, high efficiency, low emissions, and lower costs for consumers,” said Assistant Secretary for Fossil Energy Steven Winberg. “By investing in this R&D, we will enable the United States to continue maximizing its domestic energy resources while protecting our supply of reliable and affordable electricity.”

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East Kentucky Co-op to keep Spurlock, Cooper Coal-Fired Power Plants Running for Another 15 Years

By Bob Matyi 
S&P Global Platts
LOUISVILLE, KY (April 2, 2019) – A Kentucky Power Cooperative intends to keep nearly 1,700 MW of coal-fired generating capacity running through the 15-year period covered by its latest integrated resource plan, which was filed late Monday with the state Public Service Commission.
Nick Comer, a spokesman for the Winchester, Kentucky-based generation and transmission co-op, said Tuesday there are no plans to retire either the 1,346-MW Spurlock plant or the 341-MW Cooper facility in the state’s Mason and Pulaski counties. Both are considered core assets that have many years of life remaining, he added.
Spurlock consists of four units and was built between 1977 and 2009. The two newest units, both rated at 268 MW, use fluidized bed technology.
Spurlock and Cooper generally burn regional Central Appalachian coal.
The co-op retired all four units at its smallest coal plant, the 150-MW Dale facility, in 2015 and 2016.
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