As another coal mine closes, the government says to expect more closures in the future

By Philip Bump

Peabody Energy announced yesterday that it was closing its Willow Lake coal mine, a facility that employed around 400 people in southern Illinois. Earlier this month, one of those employees was killed by a piece of mining equipment, a factor cited in the closure. But the reason coal companies like Peabody are shutting down mines and declaring bankruptcy is simpler: economics.

I wrote a piece earlier this week at Slate.com that is sort of a beginner’s guide to why coal is doomed over the long term. It is called “Coal Is Doomed,” just to get the point across. The argument, in short: Coal is both unhealthy (over the short and long term) and getting less cheap compared to natural gas and renewables. To be even passably healthy, use of coal needs to get more expensive. Even the industry acknowledges the need to be cleaner. And that’s the game. (The full piece is a lot more words, so you should go read that, at some point.)

denverjeffrey

Farewell, my friends.

The Peabody closure is still on the leading edge of coal’s decline and may in fact be an outlier. But a new report from the U.S. Government Accountability Office [PDF] largely echoes the argument above: Coal is slipping, badly.

Two broad trends are affecting power companies’ decisions related to coal-fueled generating units — recent environmental regulations and changing market conditions, such as the recent decrease in the price of natural gas. Regarding retirements, forecasts GAO reviewed based on current policies project that power companies may retire 15 to 24 percent of coal-fueled generating capacity by 2035 — an amount consistent with GAO’s analysis. GAO’s statistical analysis, examining data on power companies that have announced plans to retire coal-fueled units, found that these power companies are more likely to retire units that are older, smaller, and more polluting. … Regarding new coal-fueled units, these are likely to be less polluting as they must incorporate advanced technologies to reduce emissions of regulated pollutants. Coal-fueled capacity may decline in the future as less capacity is expected to be built than is expected to retire.

Deeming coal plants to be “less polluting” requires containment of two sorts of pollutants. The first are those that can cause acute and long-term health problems: particulates, mercury, and so on. The second are those that contribute to global warming — specifically, carbon dioxide. For years, proponents of “clean coal” — the hollow industry mantra aimed at reframing the toxic rocks — have touted carbon capture and storage as a solution to the second type of pollution. The idea is that coal-burning plants could, perhaps obviously, capture and then store the carbon dioxide they emit. But as noted in The New York Times yesterday, that’s unlikely to happen, mostly due to economics.

Carbon capture and storage could be a boon for the gas and power industry because — if plants could be built economically — it offers a way to use fossil fuels like coal and gas to generate electricity for decades while also meeting greenhouse gas targets. But today, building a gas or coal-fired power station equipped with carbon capture apparatus roughly doubles the cost. That is a big problem now, especially in Europe, which is paring back its commitment to green energy. …

Carbon capture is touted by organizations like the International Energy Agency as a major component of the global effort to reduce greenhouse gases. The I.E.A. calls for 100 carbon capture projects by 2020 and 3,400 by 2050.

But those goals seem more appropriate to a few years ago, when there was money to burn. The Global CCS Institute, an industry group in Canberra, reports that there are only eight large carbon capture projects operating in the world today. In fact, they are so rare that some executives in the carbon capture industry have never seen one. …

Further hurting the prospects for carbon capture are fears that the gas will somehow bubble up to the surface. These concerns, along with a lack of onshore oil and gas production, mean that it is hard to dispose of gas on land in Western Europe. Depleted North Sea oil fields are a more acceptable repository, but pumping CO2 under the sea is also more expensive.

The numbers don’t add up. Or, rather, they do add up — just to smaller and smaller amounts. The United States is still the second-largest user of coal in the world, behind China. But as the math and the GAO suggest, coal use will keep going down. Which will mean companies like Peabody are going to have to start closing mines that aren’t outliers — until, eventually, Peabody itself closes its doors.

Philip Bump writes about the news for Gristmill. He also uses Twitter a whole lot.

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As another coal mine closes, the government says to expect more closures in the future