Coal energy inequality

Published on April 4th, 2014 | by Tina Casey

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Hey, Peabody: Stop Trying To Make “Energy Inequality” Happen!

April 4th, 2014 by  

The phrase “energy inequality” has popped up now and then without gaining much traction, but when the world’s largest privately held coal company, Peabody Energy, decides to make energy inequality a thing you’re probably going to hear a lot more about it. So, let’s take a look and see exactly what Peabody means by this somewhat vague phrase.

The energy inequality reference appears several times (we lost count after five or six) in a Peabody press release that went out over PR Newswire late yesterday, which summarized  a recent public interview with Peabody Chairman and CEO Gregory H. Boyce.

Peabody Energy touts energy inequality

Peabody Energy (cropped) by Paul Sableman.

Energy Inequality Is A Thing

In terms of access to electricity, Boyce is on familiar ground with the relationship between energy, public health, and economic development.

He throws out the following numbers in support of the argument that energy access is a significant global issue:

Globally 3.5 billion people lack proper energy access, and 1.2 billion are children.

About half the children in the developing world attend schools without electricity.

Some 1 billion people receive substandard healthcare because of a lack of electricity.

The global population is expanding by more than 200,000 people each day, and by 2050, the world’s population is forecast to exceed 9.6 billion, with over two-thirds living in cities.

As for energy inequality itself, we mentioned previously that the phrase is rather vague. In terms of affordability and raw kilowatt hours of consumption, there is a significant degree of energy inequality right here in the US.

That’s patently obvious even to Boyce, who states:

More energy is needed to create energy access for billions, to sustain growth for a new global middle class and improve access to low-cost electricity.  Too many families in developed nations face the tough choice of paying for food or energy.

We’re picking nits here because when you are trying to make buzz words happen, words are important. The numbers Boyce initially cites deal with access, not necessarily with inequality.

While there is some overlap between energy access and energy inequality as a general concept, the two are not equivalent, and we’re still not sure exactly what Boyce means by energy inequality.

Global Warming Is Not The Problem

Now, here’s where the seams start showing. With a thinly veiled reference to the latest warnings from the IPCC (Intergovernmental Panel On Climate Change), Boyce positions energy inequality as the “greatest environmental crisis we confront today.”

No, for realz. Here’s the money quote from the press release:

The greatest environmental crisis we confront today is not a crisis predicted by computer models but a human crisis fully within our power to solve.

Okay, so now we’re finally clear on where Boyce is going with this. For Boyce, energy inequality is the equivalent of lack of access to low cost energy, and the solution is obvious:

Boyce called for driving policies and actions that increase access to reliable, low-cost power using today’s advanced coal technologies that extends lives, builds economies and improves natural and indoor environments.

Clean Power Is Not The Solution

As a corollary to Boyce’s argument, alternative energy including wind and solar are not solutions because they are more expensive than coal:

Policies that force use of more expensive, less reliable energy push costs throughout the economy and place the heaviest burden on the world’s poor and low-income citizens.

Boyce seems to be a bit behind the times because grid upgrades, smart technology, distributed energy, and advanced energy storage technologies have knocked the stuffing out of that “less reliable” argument against wind and solar power, to which we assume Boyce is referring (why doesn’t he just come out and say what he means?).

However, let’s give the argument the benefit of the doubt. Since Boyce has taken the whole global warming issue out of the equation, we’ll follow suit, set aside the already observable impact of global warming on developing countries, and consider Boyce’s about concern for the world’s poor and low-income citizens.

Even without considering climate change, it’s no secret that conventional coal technologies drag quite a bit of economic and public health baggage behind them throughout the lifecycle including impacts on communities that host mining operations, transportation routes, power plants, and ash disposal sites.

Boyce asserts that “advanced coal” is the solution, but if he means the next generation of lower-emission coal power plants, that involves greater costs. Coal plants in the US are already shutting down mainly due to cost-competitive natural gas, along with greater availability and demand for wind and solar power.

Given the rapid drop-off in wind and solar costs there is even more competition in store for coal (our friends over at Israel’s Arava Power are probably looking at that right now).

In short, Boyce’s call for greater reliance on coal could lock developing countries into massive investments that will leave them holding the bag while the US and other developed countries race ahead with increasingly cheaper, cleaner forms of energy.

It’s also important to consider that the true cost of sustainable coal has yet to be determined. Take a look at just two recent coal-related disasters in West Virginia and North Carolina, and you can see what’s in store for developing countries that bet the ranch on coal.

But — But — Poor People!

As for Boyce’s concern for the world’s poor, hey, with friends like these, who needs enemies? Those of you familiar with labor issues may recall that Peabody spun off its destructive mountaintop removal operations in Appalachia into Patriot Coal in 2007, before it could get stuck holding the bag for environmental lawsuits.

Patriot filed for bankruptcy in 2012 and petitioned to release itself from $1.5 billion in pension obligations to more than 20,000 United Mine Workers of America retirees and their beneficiaries in five states.

Keep in mind that in addition to the financial crisis that any retiree would face in that situation, many coal industry retirees are dealing with major health issues directly related to their employment.

Things looked pretty dark for the retirees early last year but at a partial settlement was reached last fall, which according to at least one theory had more to do with face-saving for Patriot and Peabody than a sincere attempt to help 20,000 people avoid poverty in their old age.

Make #EnergyInequality Happen!

Well, if you feel like giving Peabody a hand with this energy inequality thing, there is already a #EnergyInquality circulating around the tubes from a while ago, but from the tweets it’s gathered there seems to be a focus on clean, distributed energy, not the problematic, centralized juice you get from coal, so my guess is that Peabody is not trying to trend on Twitter. Yet.

Have at it.

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About the Author

specializes in military and corporate sustainability, advanced technology, emerging materials, biofuels, and water and wastewater issues. Tina’s articles are reposted frequently on Reuters, Scientific American, and many other sites. Views expressed are her own. Follow her on Twitter @TinaMCasey and Google+.



  • mk1313

    All I had to see was Peabody and I knew it was a spin doctored call for more coal. Their BS is sooo transparent!

  • TinaCasey

    Thank you guys for yet another lively discussion. I corrected that typo (mispelled Boyce’s name — twice!) and I’d just like to add that arne-nl nailed the key point. Boyce wants developing countries to invest in centralized coal fired power plants and build a greater dependency on imported fuel, while developed nations are moving rapidly toward locally sourced renewable energy and distributed generation models.

  • Tree

    And you’re telling me wind isn’t less reliable than coal? WHAT?????????????? Is that a serious statement? You clearly don’t understand what reliability means in the power generation business. Let me explain it. When the wind isn’t blowing, wind farms aren’t producing power. That makes it less reliable than coal plants, which can run at full capacity 80-90% of the time. That’s the most basic part of this argument that you’re apparently completely oblivious to. Certainly hurts your credibility to discuss anything more complex

    • Again, more shouting and parading your ignorance. Reliability is more than absence of fluctuations at the power plant (= wind farm) level. Wind power aggregated over a large area is much more constant. Additionally, wind power is predictable so generation can be scheduled a day ahead.

      Aaahh that favourite sentence ‘when the wind doesn’t blow’. Please tell me when that happened the last time. Wind always blows. You’re uncapable of things beyond your puny human standpoint it seems. The level of a power grid or (since grids have interconnects) an entire country is what determines the amount of renewable generation at any moment.

      Combined with other renewable technologies (the idea is and always has been to deploy a mix of technologies, not just wind) like solar, biomass, hydro, geothermal, the variability goes down even further.

      Conventional plants can suddenly trip. A GW of power or more disappears from one minute to the next. This doesn’t happen with wind power, since it is a collection of smaller generators, each too small to matter, a wind turbine going off line isn’t noticeable.

      Your conventional power plants are not so invulnerable after all it seems:
      http://bizbeatblog.dallasnews.com/2014/01/ercot-cold-knocked-out-two-power-plants.html/
      http://news.nationalgeographic.com/news/energy/2012/08/120817-record-heat-drought-pose-problems-for-electric-power-grid/

      Each technology has pros and cons, but in case of renewables, the pros will prevail. Prepare to see fossil fuels sink into deep ocean of history. It is already happening. The orchestra is still playing, but the water level is getting awfully close to the deck.

  • Tree

    And way to pick nits with Boyce’s wording when his intent is very clear and then go on to get his name wrong several times in your article. You’re a joke.

  • Tree

    Hey Guys, RENEWABLES ARE WAY MORE EXPENSIVE THAN COAL!!!!!!!!! Thats the point you’re missing. Developing countries can’t use solar or wind because they can’t afford it. Coal is easily the cheapest form of electricity generation. Also easily the dirtiest. But there’s a cost/benefit analysis to be done. Where you come down on that is up for debate. The costs are electricity generation are not. It isn’t even close.

    • Your triumphant tone and shouting only serve to draw attention to the fact that you are utterly wrong.

      By comparing the calculated levelized cost of $133 per MWh in 2008 dollars for a new conventional coal-fired power facility with the combined weighted average levelized contract prices in Table 2, the cost of all renewable energy technologies is less than the coal guidepost rate

      source:

      http://www.michigan.gov/documents/mpsc/implementation_of_PA295_renewable_energy_411615_7.pdf

      more info:
      http://www.bloomberg.com/news/2013-02-01/first-solar-may-sell-cheapest-solar-power-less-than-coal.html

      even more:
      http://about.bnef.com/press-releases/renewable-energy-now-cheaper-than-new-fossil-fuels-in-australia/

      • Tree

        HAHAHAHAHA. This is literally too good to be true. Straight from your article:

        “Incentives vary widely by location and aren’t included in the London-based research company’s levelized pricing models.”
        Thats the point – they can only compete when HEAVILY subsidized by the tax base. Of course renewables are cheaper when the government pays for them. Do you honestly not realize that’s what makes them competitive?
        Guess who can’t afford enormous government subsidies for their energy? Developing countries. And the US for that matter.

        • Yeah and keep silent about the hundreds of billions of subsidies to fossil fuels.

          And the hidden subsidies: the health care bill is a massive subsidy to coal too. You must be familiar with the Harvard paper on the true cost of coal: http://onlinelibrary.wiley.com/doi/10.1111/j.1749-6632.2010.05890.x/abstract

          “We estimate that the life cycle effects of coal and the waste stream generated are costing the U.S. public a third to over one-half of a trillion dollars annually.”

          Price of coal with all hidden and non-hidden subsidies is more than the $133/MWh. Meanwhile, more recent contracts for renewable energy (wind and solar) were closed for much less than $100/MWh.

          You’re just cherry-picking your way through the evidence to keep your argument afloat.

        • Bob_Wallace

          Cut the all caps stuff. That sort of behavior is not accepted here.

    • Bob_Wallace

      Citigroup just released a study of new energy prices.

      The LCOE for new coal is around 15.6 cents/kWh.

      The average PPA price for onshore wind in the US for 2011 and 2012 was 4 cents/kWh. Add back in the subsidy and it’s just under 5.5 cents.

      Solar is now signing PPA in the US SW for 5 cents/kWh. Add in subsidy and it’s just under 6.5 cents.

      Developing countries are installing solar and wind rapidly. Right now many are spending as much as 25 cents/kWh for diesel generation.

      A micro-solar system can be purchased by poor people living off the grid for less than what they pay for kerosene and candles. In a year or so they system is paid off and that very scarce money is freed up for other things the family needs.

      Stick around for a while. Read some articles and find out what is really happening in the world.

    • Larry

      Your statement is simply BOGUS. If you were a regular reader of this newsletter you would have plenty of information which refutes yourassertion. Coal generated electricity is cheapest?? Does that include the cost of financing a new generating station and Carbon capture and sequestration (assuming it could even be done) ? Wake Up. This is the 21st century, not the 19th

      • Bob_Wallace

        Require coal to pay its external costs and it becomes our #1 most expensive electricity.

        Right now we are paying the very high cost of coal generation with tax and insurance dollars.

        • Larry

          Correct you are, Bob. Anyone who watched “60 Minutes” on CBS this weekend saw how the coal industry has shifted the medical costs for treating Black Lung Disease and other mining related illnesses (Emphysema, COPD, etc.) to the Federal, State, and Local Governments. Put those costs where they rightly belong (On the Coal Companies) and the economics of coal hits a major speedbump

          • Bob_Wallace

            I’ll bet taxpayers end up having to pay for the ash dump cleanups. Most likely the owners of coal companies will find some way to isolate the coal plants as stand alone corporations and then just let them go bankrupt.

            At least there will likely be enough salvage steel in the plants to pay for their tear down. And we won’t have to wait a century or two before the steel has dropped radiation level enough to reuse.

            And we will only have to clean up the sites to brownfield levels. Then we can cover it over with solar panels.

          • Larry

            Right you are my friend

  • Michael Berndtson

    Dear Heirs and beneficiaries to and of Peabody Coal Mining,

    As a relatively poor person (RPP), compared to Peabody’s upper management and its public relations contractors, I’d like to live in a world powered more and more by renewable energy and less and less by fossil fuel. I see no benefit in not slowing down the leak, so to speak. The leak would be the exit at the emission stacks. The leaking fluid would be products of combustion, including carbon dioxide and other greenhouse gases.

    Sincerely,

    Michael J. Berndtson, RPP

    p.s. for your listening enjoyment, here’s John Prine, circa Maywood, IL days I believe, singing “Paradise” (aka Mr. Peabody’s coal train)

    http://www.youtube.com/watch?v=XyPTIOJuWws

  • Jimbo Jones

    Many people have never burned a piece of coal. A little piece of coal gives of a very very large quantity of heat.

    • Bob_Wallace

      It certainly does.

      And if that was all it gave off we wouldn’t be in the mess we’re in today.

      • Jimbo Jones

        I think you are over dramatizing the problem to reach a political goal.

        • Bob_Wallace

          I have no political goal.

          I have the goal of trying to prevent the destruction of our way of life.

          And there is nothing “dramatic” about that. If we don’t get our “stuff” together very quickly we will face massive human die off.

          • Jimbo Jones

            That is good. I like people who want to do good, for goodness sake. But people need jobs too.

          • Bob_Wallace

            You would be OK with people working as hit men and knocking off innocent others for money?

            If not, how do you justify jobs that lead to about 7,500 US deaths per year?

            Take the workers out of coal and give them good, safer jobs installing and maintaining renewables.

          • If your daily job is working in a coal mine, how does this office view look to you:
            http://i.dailymail.co.uk/i/pix/2010/10/30/article-1324172-0BCC390E000005DC-531_964x641.jpg

            This argument comes from the people who’s money is tied up in coal. They’re protecting their wealth through false arguments. Be smarter than that, don’t fall for that lie.

            Coal needs replacement. There are good jobs, I would even say better jobs in the renewable energy sector. Miners have to learn another profession, that’s all there is to it.

  • Will E

    give the poor Solar panels for free and they pay back with the profits using the electricity generated for free, starting day one. In this way all poor have electricity.
    When they need more give more Solar panels for free, When they have to much energy they can sell and make a profit.
    dig for, transport and burn coal is historie, there is too much sun everywhere.

  • Jim Seko

    By the way, the environmentalists in St. Louis are actively fighting Peabody and Arch Coal with protests, letters to the editor, engagement of city and state represtentatives, petitions, etc.

  • JamesWimberley

    “Advanced coal” is cousin to thorium reactors and high-altitude wind machines. Can I sell you a carload of unobtanium?

    • Bob_Wallace

      Actually we can substitute extraordinarilyexpensiveium for unobtainium.

      That frees dreamers to dream on….

  • Jim Seko

    I read the whole article but I really didn’t have to read past the headline to know what’s up. Each and every time a conservative pretends to care about inequality they’re trying to obfuscate some issue.

  • “In short, Boyce’s call for greater reliance on coal could lock developing countries into massive investments that will leave them holding the bag while the US and other developed countries race ahead with increasingly cheaper, cleaner forms of energy”

    That is a very succinct and eloquent way to obliterate the whole ‘the world needs fossil fuels to lift the poor our of poverty’ canard.

    In addition I would like to add two very strong arguments of my own.

    The first one is based on the prime law of economics: supply and demand. How in the world can they maintain their position that increasing our use of finite fossil fuels helps the poor? We all know that increasing demand drives the price up. The contrary is true: a shift to renewable energy will drive down prices of fossil fuels, and thus reduce energy inequality.

    Although, of course, we don’t want the poor to increase their energy use by increasing fossil fuel consumption, and there comes my second argument: our increased use of renewable energy will drive mass production and R & D, both with the effect of driving down the price of alternative energy.

    • Banned by Bob

      So, it’s not up to us to keep energy availability away from the poor of the world. It’s one of the single largest drivers to improve the quality of life and life expectancy.

      That said, many remote areas depend on expensive diesel and LPG now. This will be a great place for energy competition. There’s no reason why distributed solar shouldn’t be the hands down favorite to win these kind of battles.

      So rather than complain, let’s see solar compete. We already know that it is price competitive against these kind of fuels in developing countries. If it wins in a heads up battle, no PR campaign will matter.

      • Complain? Huh? Was that meant for me?

        Yes, in the end solar and other renewables will win on their own strengths. The question isn’t whether it will happen or not. The question is how fast it will happen.

        There are powerful forces wanting to keep things the same. This has always been so and always will be. We must expose these forces and their empty arguments to hasten the transition. This is much more complicated than just a simple matter of which technology delivers the cheapest kWh’s.

        • Tree

          I agree (but think its unlikely) that at some point wind may compete on its own merits. If so, great, but its purely the government subsidies that make these projects feasible

          • Bob_Wallace

            And you think fossil fuels aren’t heavily subsidized?

            Let coal and oil start paying their own way and we’ll have shifted to renewables in 15 years or less.

          • JamesWimberley

            I’ll take the bait: stop lying. This site has linked to numerous studies (the latest is by well-known commie mouthpiece Citibank) showing the contrary. Wind is even competitive in the USA with natural gas if you (correctly) impute a carbon charge to the latter. The PTC is a rough substitute for this, so it’s not a subsidy. Kindly cite credible sources for your opinion, back off, or shut up.

            The element of truth in this talking-point is that wind and solar used to be dependent on government subsidies. Quite right too. These policies, in four or five countries, aimed at lowering costs to competitive levels by economies of scale and technical progress (look up “learning curve”). They succeeded.

            The subsidies are no longer necessary. Brazilian wind for instance does not get any, it just wins the auctions. The argument for extending the American tax credits is simply a level playing field.

            The learning is not however over. There is no reason to think that technical progress and economies of scale have come to an end in wind or, still less, solar. In 2020, wind could easily be 80% of 2010 prices (here, page vi). Solar could be 30% (at the historic learning rate of 22% and doubling time 2 years). These projections are quite conservative; they assume steady technical progress but no major breakthroughs, unlikely for wind but quite possible for solar. At that point the truth will be obvious even to you.

          • jeffhre

            That point for wind was September 2013. Anyone not vested in a thermal plant engineering office, who is planning most any fossil fuel plants after that date, will have their proposals shoved violently back at them by their CFO. Non transport related energy production reached a remarkable new financial hierarchy at that point in time. If you do not see it from the many posts here, look up the latest generation costs for your self.

    • Tree

      What are the cheaper forms od energy? Do you know what gas prices are outside of north america?

      • Bob_Wallace

        Are we talking about new energy?

        If so, then in order – wind, PV solar/NG (depending on where), nuclear, coal.

        Are we talking about energy from paid off plants?

        If so, then in order – PV solar, wind, (some) nuclear, NG, coal.

        Of course I’m including the external costs. To not do so would be dishonest.

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