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A strategic vision to save the coal industry and save our, collective, future

July 1st, 2009 · No Comments

Last evening, Devilstower spoke of his regrets that there had not been more attention to this post when first published last fall and that this had not pursued as a path to ‘win’ coal companies’ agreement on a path forward to tackle climate change. Thus, with Devilstower’s permission, a guest post discussion of an innovative strategic vision for continued (expanded) coal industry profits and significant cuts in US greenhouse gas (GHG) emissions that is not dependent on massive investments in the chimera of “clean coal“.

Coal mining may be the most misunderstood industry in America.

Many people think of it as a Dickensian endeavor, or consign it to the realm of old Loretta Lynn songs. They certainly don’t have a coal bin at their home, and think of the industry as something that only affects poor, remote parts of the country. However, coal is actually an enormously consequential industry responsible for more than half the nation’s electricity. Just because there hasn’t been a coal stove at your house since grandpa was a kid, doesn’t mean you didn’t cook your breakfast using coal.

Others have visions of whole towns where the men-folk march off to the mines each morning carrying a lunch bucket and a carbide lamp. While there are still many underground mines, the truth is that improving technology has completely altered both the job and the numbers of coal miners. Nobody yells “fire in the hole.” Nobody shovels sixteen tons in a day. Nationwide there are now around 80,000 coal miners — about the same number as the number of autoworkers in Indiana alone. Even in the states where coal is produced, people tend to get the equation backwards. They overestimate the impact of coal on the employment picture, and discount the connection between coal and the light switch.

I understand that the reaction from many people to this title of this post will be “why?” In recent years, the two things that most people hear about coal are the increased mining deaths brought on by relaxed regulation and enforcement, and increased environmental damage brought on by… um, relaxed regulation and enforcement. Why save an industry that destroys mountains, spoils waterways, and contributes a large percentage of the greenhouse gases that are pumped into our air?

The simple answer is, because we need to. In the short term, we can’t do without either the electricity we draw from coal or the jobs the industry provides. President Obama understood this when he frequently mentioned “clean coal” as a part of his energy plan.

This should not for a moment be taken as “hands off coal mining.” Clean coal is a fuel that doesn’t exist outside theory and bench-scale lab tests. It may never exist. If we really intend to develop technology to limit CO2 emissions from burning coal, it will take an investment of billions of dollars — money that won’t be spent on alternatives. Despite the white “clean coal” hats handed out at political events across the country, the industry itself doesn’t expect to deliver on the clean coal promise for two decades.

While we wait for promise of clean coal, the industry should understand one thing clearly: they’re at risk. There are other energy sources out there, energy sources that are clean now, and as those energy sources expand and diversify, there’s a greater and greater risk that people will simply say “enough.” We might not be able to flip the switch and turn off coal today, but we can certainly put a plan in place that phases coal out. And we very likely will.

Forget for a moment the CO2 pouring from the power plants. Coal will get no support as long as it’s seen an industry that disregards both its workers and the environment. It needs to clean up the rest of its act if it hopes to be around when clean coal emerges from the lab.

So what steps should the industry take if it expect the public support it requires to survive?

Stop Mountaintop Removal

It may seem odd to start a list intended to save an industry by talking about shutting a part of it down, but there’s a very good reason to end mountaintop removal. It’s a disaster. Even compared to other forms of surface mining, mountaintop removal is a environmental and social catastrophe. It’s visible. It’s ugly. And every moment that it continues the industry will be at the focus of a completely justifiable firestorm.

Worst of all, the industry doesn’t even need it. The amount of coal that can be removed by mountaintop removal and by no other method is vanishingly small. So why rip the top of a mountain, toss the rubble into rivers, and leave behind a wasteland if you don’t need to? Profit. Mountaintop removal isn’t necessary, it’s just cheaper. MTR uses far fewer miners than other techniques that might recover this coal. It’s fast, cheap, and dirty. The Bush administration has spent the last eight years making it easier and easier to practice this destruction, and the industry has begged for more. That has to end.

For the Obama administration, this one should be a no-brainer: every step the Bush administration took to ease the use of MTR should immediately be reversed. Day one. And not one penny more for clean coal research until mountaintop removal is completely and permanently halted. Coal mining can certainly survive without mountaintop removal, but we need to make it absolutely clear that it can’t survive with it.

There’s an upside to this for the established players in the industry. MTR is so cheap and easy to practice, that it’s the favored means of mining for companies that dip into coal mining as a kind of hobby — road building or construction companies who discover that, when other jobs are running low and the price of coal is running high, their gear is perfecty capable of making a mess of a mountainside. Eliminating mountaintop removal will increase the cost of mining, yes, but by raising the cost of entry and restricting mining to more specialized equipment, it will mean that the dilettantes (who also happen to be those most likely to dodge environmental and safety rules) will be forced from the industry.

Biofuel mix

Though we’re a long way away from being able to contain the greenhouse gases produced from coal-fired power plants, there is a way we can reduce these emissions in the short term: burn less coal. For individuals, this means conservation. For the utilities, this means bringing biofuels into the mix.

Pelletized grass, now used in some home heating systems, can reach a BTU value of around 8000 BTU/lb, which is comparable to the most commonly used coal in electrical generation, the sub-bituminous coal from the Powder River Basin of Wyoming. This pelletized grass could be mixed directly with coal in existing generation systems without requiring major changes to boilers or generators.

We can’t make enough pelletized grass to completely replace coal, but if we can replace 1%, that’s like taking six of the over six hundred coal power plants off line. There are advantages here for the utility industry, in that they can source this material locally and involve nearby landowners who otherwise might be none too happy about the leviathan power plant in their midst. The coal companies can also get involved, as the larger companies hold hundreds of thousands of acres of land, much of it lying fallow. And the grasses most suitable for pelletizing grow well across the Midwestern strip when coal fired plants are most dominant.

Both utilities and mining companies should get behind this push, and some portion of clean coal funding should be set aside for developing this alternative.

Support electric vehicles

Battered, money-losing car companies are trying to get electric vehicles on the road. While automakers have been failing, coal companies have enjoyed high prices for coal, rising productivity, and record profits. And coal companies have more to gain from seeing electric vehicles on the road than car companies.

The growth rate for electrical demand alone is slow, around 2% a year, and as Americans take more steps toward conservation and the economy puts a halt to the spread of McMansions, even that growth is in doubt. On the other hand, 40% of our energy is now spent on transportation driven by oil. Coal companies, and utilities with coal-fired plants, should be looking at that number like dogs eying a T-bone.

Coal companies should be pushing the development of electric vehicles by being first in line to purchase electric fleets and providing incentives for their employees to drive electric. They should consider investing directly in those companies pushing electric vehicles into the marketplace.

Does this mean that buying an electric car will mean more coal-fired plants? No. However, there’s no doubt that more wind, solar, and other alternative sources will be coming on line. If those sources come in faster than demand (and we should all hope they do), that means that some existing plants will be switched off. Dirty coal plants will be at the top of the list for retirement. Unless coal works hard to see that electric transportation expands their market, there will be no market well before “clean coal” is possible.

Tougher MSHA regulations

This one is so obvious that the truth is few in the coal industry would say otherwise. While there are rogue actors in the industry, most coal companies long ago figured out that getting their employees injured or killed was bad for business in a number of ways.

That doesn’t mean they won’t push the boundaries. The Bush administration came into office hating safety regulations. They cut back on both regulations and enforcement — and mining deaths spiked. That’s a result as certain as the connection between deregulation and our current economic problems. Improve regulations and stiffen enforcement. The majority of companies will cheer; the rest will grumble and go along. And more miners will survive to go home to their families.

Tougher EPA regulations

The emissions that come from power plants are just one end of the pipeline. The rest of the system — exploration, mining, and transportation — all needs a regulatory review. Mining is an old business and for several decades now most states have held “primacy” over mining regulations, giving them the right to create their own rules.

While the intention was that federal regulation would represent the “floor” and every state would regulate to tougher standards than that floor, over the years the rules have become embroidered with enough changes and executive branch interpretations that there are loopholes you could drive a coal truck through. It’s past time for a top to bottom review of mining law, from the way that permits are awarded to the way land is reclaimed.

All this should happen after mountaintop removal mining is outlawed.

Support the union

This may seem the most counterintuitive of all the suggestions. The union was created in response to the abuses and excesses of the companies. Since then, there’s been a constant cold — and often hot — war between the two sides.

And the companies are winning that fight. As the focus of coal mining has shifted from Appalachia and the Midwest to western reserves, the companies worked with right-to-work state governments to squeeze the unions out. Then they used competition with those western mines to purposely crush their own union operations and force changes on the previously union-centric states. The industry did such a beautiful job of blaming this on environmental laws that they took states like Kentucky and West Virginia, and dipped them in deep red.

The final result is that mining came back into the union areas with non-union operations under the protection of anti-union state and federal governments. With few exceptions, they’ve been able to limit the union to older operations. Even Blair Mountain in West Virginia, where Mother Jones led early union supporters in a battle that included the US government using Army Martin MB-1 bombers to attack miners, is now targeted for a non-union mountaintop removal operation.

Why should the companies change their tactics? Because those tactics have hurt them badly. Under the unions, companies got a steady stream of workers who saw mining as a stable industry and a source of a decent living. Post-union, they’ve had a much harder time getting young workers to sign on. As experienced hands start to retire, companies are finding themselves short of replacements. Mining engineering scholarships often go unclaimed. Supervisor roles are harder and harder to fill.

Mining companies need the union to hold onto an experienced, committed workforce.

Invest in your competitors

Because the truth is, long term, you’re done for. If the industry works hard — if it gets rid of MTR, if it supports deployment of electric cars, if it cooperates in the establishment of tougher regulations and works together with the union — the industry can hold off a serious public effort to crush it. But when you look out past the next decade, there’s no way coal mining can hold back the future.

Forget the environmental impact. After decades of mining wringing out every last ounce of productivity from mining, solar and wind are just getting started. Within not too many years, building a coal-fired plant simply won’t be an economically viable alternative. Then it will be a bigger and bigger effort just to tread water.

The best way for a coal company to survive in the long term? Stop beng a coal company.

Tags: business practice · carbon dioxide · coal · commerce · Energy