Coal news and updates

Greg Boyce, who leads the world’s biggest publicly traded coal company, wants people to focus on the fuel’s virtues, not its warts. His pitch: cheap and abundant coal should be used to drive economic growth and help the world’s impoverished improve their lives.

 

“It’s pretty strange that, globally, not only the UN, but developed country leaders are spending so much time on, quote, climate change,” said Boyce, chief executive officer of Peabody Energy Corp. (BTU) “They aren’t focusing on how you eliminate poverty, eliminate energy poverty, and start driving global economic activity.”

 

Boyce is wading into an issue at the very heart of the future of the global economy, at a time when his own company, which exports coal worldwide, hasn’t reported annual profit since 2011.

 

The global debate is marked by dual demands: how to bring power to 1.3 billion more people in an era when coal has been stigmatized as escalating carbon-dioxide levels.

 

Peabody’s position is drawing heavy criticism at a time when the United Nations warned in a Nov. 2 report that humans must act swiftly and boldly to cut carbon emissions to prevent widespread harm from rising global temperatures. The planet is on a collision course with disasters including floods, drought, extinction of species and ocean acidification, the report said.

 

Yes, Boyce recognizes that “carbon dioxide levels in the atmosphere are rising.” But even as coal is the biggest source of carbon emissions, he argues that divesting from fossil fuels right now is “misguided and anti-poor.”

 

Reducing Poverty

 

Energy is essential to reducing poverty. People living in 34 of the most advanced countries used an average of 4,176 kilograms of oil-equivalent energy per capita in 2012, according to the World Bank. That compared to just 339 kilograms of oil-equivalent energy in 2011 in the places that make up the UN’s list of “least developed countries.”

 

“I’ve traveled through Africa, I’ve traveled through Central America, I’ve traveled through China, India, Indonesia,” he said. “The living conditions of the economic and energy impoverished are startling.”

 

Driving global growth is on the agenda for the G-20 Leaders’ Summit next week in Brisbane, Australia, and coal should be seen as one of the answers, he said.

 

St. Louis-based Peabody generates about 39 percent of its revenue in Australia and is co-sponsoring an event leading up to the summit, The Brisbane Global Cafe, featuring speeches from world authorities on energy and other topics. Bloomberg LP, the parent of Bloomberg News, is also a partner.

 

UNFCCC Meeting

 

The energy poverty argument will also come up next month at the UN Framework Commission on Climate Change meeting in Lima, where delegates from more than 190 nations are working to draft a binding global agreement.

 

There are people arguing that energy poverty and climate change can be solved simultaneously. Affordable power can be brought to far-flung corners of the globe without accelerating the buildup of carbon dioxide in the atmosphere, said Jason Bordoff, director of the Center on Global Energy Policy at Columbia University.

 

“The idea that we just put blinders on and say climate change doesn’t matter because we need to bring modern energy services to 1.3 billion people is wrong,” said Bordoff, who advised President Barack Obama on climate policy. “It’s a false choice.”

 

While coal will play a role in the world’s energy mix for “years to come,” he said, it must be scaled back significantly, primarily in the U.S., China and India, if the planet is to warm no more than 2 degrees Celsius (3.6 degrees Fahrenheit) the internationally agreed upon target.

 

‘More Renewables’

 

“It’s going to be a lot more renewables, it’s going to be a lot more nuclear and it may well be technologies that we don’t even know about yet,” he said. That may also include technology to capture carbon emissions from power plants and stores them underground.

 

Boyce is defending coal as the industry contends with a boom in natural gas, tighter government regulations and increasing competition from overseas. U.S. coal producers mined 983,849 tons in 2013, the lowest since the 1980s, according to the Energy Information Administration.

 

Yet coal generates about 40 percent of the world’s electricity and is the fastest-growing source of power by volume, according to the International Energy Agency.

 

Given that, Boyce isn’t the only advocate of fossil fuels for combating energy poverty. Chevron Corp. CEO John Watson has also said that increasing energy consumption in developing nations will help spur demand for fossil fuels for decades.

 

Natural Gas

 

And Bjorn Lomborg, a Danish researcher and author of “The Skeptical Environmentalist,” is known for his opposition to efforts to cut emissions. He routinely argues that fossil fuels are the easiest way to deliver electricity to developing nations.

 

For now, that means coal, but over the next 10 to 20 years there needs to be a broader shift to natural gas to protect the planet, Lomborg said in a phone interview yesterday. Beyond that, the global energy mix will need to rely more on renewable energy, which will require a “dramatic increase” in investments in clean power.

 

Bill Gates endorses that view. A June 25 blog post that featured two videos of Lomborg laying out that thesis, the world’s richest man said poor countries can’t afford today’s “expensive clean-energy solutions, and we can’t expect them to wait for the technology to get cheaper.”

 

Solar Power

 

That idea has plenty of critics, too. For many of the world’s energy impoverished, fossil fuels aren’t the best solution, said Jigar Shah, a consultant who founded the solar developer SunEdison Inc.

 

Countries like South Africa have coal-fired power plants and transmission lines, yet electricity isn’t delivered to the poorest areas, said Shah. Solar panels may be a better option because they don’t need extensive infrastructure.

 

Bordoff said coal benefits people who are “slightly off-grid,” who live near existing infrastructure and can be easily connected. People in more remote areas will likely use solar, wind or gas-powered systems that can be used to power a village or even a single home.

 

Peabody rolled out a public relations campaign in February, Advanced Energy for Life, after concluding the coal industry hasn’t successfully defended itself from critics, Boyce said.

 

“If we haven’t gotten anything right, it’s not letting folks know that electricity doesn’t just come out of the plug on the wall,” he said. “There is something that goes on behind the wires that generates all that electricity.”

 

 

Source: Bloomberg