Saturday, April 26, 2014

Facing Coal's Inevitable Decline

As I noted in my last post, Sen. Fred Thomas would have you believe that over the last couple of decades, coal fired power plants have achieved dramatic reductions in carbon pollution. And he also claims, without offering a shred of evidence or explanation, that requiring new power plants to meet EPA emissions standards will bring all development of new carbon pollution control technology to a screeching halt (you can read Thomas’s Missoulian column here).  But before you decide you can rely on the power industry to usher in a brave new energy future all by itself, you’d better take a closer look at what’s really going on here.

You can start with the fact that carbon emissions from burning coal grew by 81% between 1973 to 2005, and only after that did they begin to fall. And here’s the thing: over those same years, according to the US Energy Information Agency, the amount of carbon emitted per ton of coal burned did not change at all.* That means, of course, that the decline in emissions after 2005 could only have come from one source: burning less coal.  That happened because coal was getting displaced as a fuel by natural gas and renewables, and at the same time, the thermal efficiency of coal fired power plants improved some, meaning that it was possible to generate the same amount of juice with less fuel.

Now if you’re a coal enthusiast like Thomas, the fact that emissions have gone down because less coal has been burned is not a good thing. No, what you want is to reduce emissions but dig up and burn more coal.** That means reducing emissions per ton of coal burned, which sounds, and is, pretty hard to do, since it requires the deployment carbon sequestration technology. That simply hasn’t happened, and isn’t likely to happen unless emission standards are so tough that the only way coal fired plants can stay in the game is by successful sequestration, aided perhaps by a substantial public investment in developing the requisite technology.

Thomas has this point backwards: he implies that first the technology comes along, apparently out of the blue, and then emission standards can be set to match what’s possible. But that won’t work. Absent standards or subsidies or regulations, there is no incentive for sequestration. No company is going to attempt it, particularly with no guarantee of success, out of the goodness of its corporate heart. On the contrary, it has to be told, or be paid, to toe the line. So Thomas is shooting himself in the foot here: he is opposing the one regulation that might make it possible to arrest climate change and stop coal’s slide into oblivion.

But Thomas may be  on to something here: maybe the EPA regulations aren’t the best way to cut carbon emissions.

The problem here is that there are all sorts of strategies to reduce carbon pollution: residential energy conservation and efficiency, better vehicle mileage, displacement of fossil fuels with renewables or coal with natural gas, improved public transportation, carbon sequestration and many, many more.***  Inevitably, any comprehensive policy to arrest climate change (assuming it’s not too late) is going to rely on a mix of these strategies, and the premium in selecting that mix should be on minimizing the cost of reducing emissions. We can’t fool ourselves here: as much as we might wish it were otherwise, arresting climate change is going to be costly and adopting high cost strategies to get us there will be a luxury we can’t afford.

That’s where sequestration comes in. No matter how good we get at it, it is unlikely that sequestration will be cost competitive enough to become the only or even the principal method we rely on to reduce emissions.  And since almost everything else we can do means using less coal, we need to face the fact that an efficient and cost effective national policy to arrest climate change inevitably means that less coal is going to get mined and burned. If the EPA regulations have the effect of forcing the pace of sequestration and delaying that inevitability, they are arguably standing in the way of progress.

Because Montana is an energy producing state, and because energy producing interests tend to dominate the conversation, it is perhaps predictable that Montanans tend to look at climate policy through the wrong end of the telescope. We don’t ask what’s the most efficient and effective way for the world to get to where it desperately needs to be. Instead we usually ask what’s in it for us here in Montana: how many jobs, how much tax revenue, how many dollars to spend. The two aren’t the same thing, and while it may be understandable that Montanans think that coal jobs are sacrosanct, it is also understandable that the rest of the world, faced with the climate change crisis, might find that attitude hopelessly self-indulgent.

* The data point I am referring to here is carbon emissions per BTU of energy consumed by burning coal. The US EIA doesn’t calculate this number for you, but you can do it yourself using the data in Tables 1.3 and 12.1 in the March 2014 Monthly Energy Review.

** Actually, it’s not clear that Thomas cares about reducing carbon emissions.

***Back in 2007 Governor Schweitzer created a Climate Change Advisory Committee which was charged with identifying policy options for reducing Montana’s green house gas emissions. The committee produced a report (available here) which unfortunately got lost in the shuffle when the Great Recession claimed all of the attention of the public and state government.