Monday, May 19, 2014

No more coal! (Let's burn it in Europe!)

Coal use in the U.S. has declined significantly in the last 24 years. Nationwide, we used to burn coal for 55% of our electric generation megawatts; now it's down to 39%. Mostly, as coal plants have shut down at the end of their useful lives, they've been replaced by natural gas combined-cycle units. There have been no new coal plants built in the last five years. 

So what's the coal industry to do? Sell their product to Europe!

But wait... haven't many countries in Europe adopted climate change rules to cut carbon emissions. Why yes, they have. They're just ignoring them now. In fact, 19 of 28 European Union (EU) countries have been subject to formal complaints about carbon emission rules. 

As the Great and Powerful Wizard of Oz said, "Pay no attention to the man behind the curtain!"

The Wall Street Journal reported in early May that U.S. exports of coal are on track for a record-setting third year, to more than 100 million tons. Exports to the EU alone in the past 10 years have more than tripled, from 13.6 million tons in 2003 to 47.2 million tons in 2013. 

Even green Germany, which decided to phase out nuclear power after the Fukushima nuclear disaster in Japan, has turned to coal. Europe was happy to favor the environment when the economy was good (pre-recession), but the result of investing in renewable energy is higher electricity prices and reduced grid reliability. That, they could not accept. 

Related sidebar... I was watching Real Time with Bill Mahr this weekend, and Bill said in passing something like, "Germany generates 74% of their electricity from renewable energy - wind and solar." I was a bit shocked, and wondered if it was true. How does one check that factoid? Fortunately, Ian Bremmer, Author and President of Eurasia Group, was there as a guest to clarify. "That's just for one particular day, Bill." 

One day. And Bill Mahr was prepared to let stand, uncontested, the statement that Germany generates 74% of its electricity with renewable energy every day. That's the last time I depend on comedians for my news.

Here's what it all means. It's complicated. De-carbonizing the economy is not an easy task, and will take many years. We're not building any more coal plants, so over the next 30 years, and perhaps sooner, we'll be generating electricity in the U.S. from something other than coal. Emissions of carbon will drop by 40-50%. No regulations needed, just the natural order of business. 

On second thought, perhaps it's not complicated. 

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