The coal industry wants us to believe that we can get cheap coal power for decades. Sounds tempting. But are coal industry claims reliable? Remember, these are the same people who consider the hospital expenses victims of coal pollution incur as “external” expenses – and therefore irrelevant. Appalling behavior. But educational.
Always remember to consider your source's motivations – and follow the money.
Let's first follow the money in a related example; the oil industry. We have reached what would could be called “effective peak oil.” It appears that the world's consumption of oil has exceeded its economical production. Norway's production has dropped by 25% since its peak in 2001. Britain's production is down by 43%. Alaska's Prudhoe Bay is down by 65%. And Russia's and Mexico's production are down also. On top of this, demand for oil from China and India is up. It's becoming glaringly obvious that we're running out of cheap oil. Bad news for us. But are the oil companies hurting? Not at all! They're making record profits in the multi-billions!
Can you imagine what the “captains” of the coal industry are thinking about all of this? Might they be scheming to also get deep into your pocketbook? And when can they expect “peak coal” profits? Sooner than you think.
Apparently, the so-called “proven” coal reserves are not so “proven” after all. That 250 year U.S. supply of coal you've heard about. Well, forget about it. The National Academy of Sciences predicts a 100 year supply, at today's consumption. Which, with up to 150 new coal burners, means we'll start see a drop in production far sooner than expected.
Yes, the coal industry keeps telling us there is plenty of coal. But the USGS has estimated that over 90% of the Appalachian coal reserves are fully exploited. Peak coal, for Virginia, was back in 1990.
The Energy Watch Group predicts that world production of coal will peak when China's production peaks – some time around 2025. At that point, it won't matter how many more years supply exist in the U.S. The price of coal will rise everywhere, just like the price of oil is now.
Worldwide, the price of coal is already starting to rise. Coal prices have actually been rising faster than oil prices for the past six months. Predictions have been made that the price of coal will double (or even triple) within months... It seems China's demand for coal has effectively exceeded it's economical supply sooner than expected.
Fossil fuel prices are on the rise, and Americans' electricity bills are already going up. Analysts are predicting big U.S. electricity price increases within months. Therefore, coal is looking like a bigger and bigger gamble for the American consumer. But the gamble is looking quite different from the coal industry perspective. They stand to make billions, just like the oil industry is now.
Its obvious why the coal industry wants more coal-fired power plants. Every new coal-fired power plant is a 30 to 60 year commitment to millions of tons of coal consumption. Does the coal industry care that ultimately the U.S. consumer will pay more? Of course not. That's not how corporations commandeer oil industry sized profits.
But the problem is bigger than that. Not all of those proposed coal-fired power plants will be built. Not only has the price of coal risen, but the price of building a coal-fired power plant has doubled. And with carbon taxes, coal power plant investments have become altogether too risky. Investors are getting very cautious. And their caution means that very little new power generation of any kind is being built. Combine sparse new generation with a continued growth in U.S. consumption, and power prices are bound to rise even more. That's just supply and demand.
But we don't have to run ever faster on that treadmill.
Others have already broken the path.
Since 1991, Sweden has been, by the use of carbon taxes, promoting the development of clean energy. Sweden intends to phase out all fossil fuels by 2020. They're economy's growth rate is now three times that of the U.S.
Iceland, in the 1970's, was one of the poorest economies in Europe. Iceland is now 100 percent energy independent. Iceland is now ranked by the International Monetary Fund as the fourth most affluent nation on the planet.
These two countries are excellent real world examples of the financial gains to be had by reducing our dependence on fossil fuels.
However, the coal industry only wants you to know what they want you to know.
The coal industry doesn't want you to know that:
Wind power generation globally has surpassed 100 GigaWatts. And solar power costs are getting closer and closer to coal costs. In some places, at times, wind is cheaper than coal. And thermal solar generates power even after the sun goes down.
What the coal industry really doesn't want us to know is that we don't have to be dependent upon them. We don't need them to generate our power. And in the long run, America can save billions by not demanding a limited supply of coal.
