A Left Turn On The King Coal Highway
In early June, California Gov. Arnold Schwarzenegger spoke at the United Nations World Environment Day conference in San Francisco and announced he had issued an Executive Order requiring the virtual elimination of greenhouse gases (GHG) in California by 2050. As California is the world’s 7th largest economy, the most populous American state, and the national trendsetter in all behaviors social, coal-producing states like West Virginia need to take his decree seriously. If California follows through on his GHG reduction plan, then we will have, on a de facto basis, ratified the Kyoto Treaty.
Oh Arnold! Must we all pay an imaginary piper because your in-laws have made you feel guilty for burning tons of napalm on your way to becoming a Hollywood millionaire?
Also flying across the radar screen is the resurgence of nuclear power. The Green religion considers GHG the equivalent of 666 in Revelations. And to exorcise GHG, the Greens have become blind, deaf, and dumb monks whenever the topic of nuclear power is debated. Talk about an unholy alliance against coal!
The facts of burning coal are simple but no scientist is prescient enough to draw conclusions about atmospheric warming from them. When you burn coal, you get lots of carbon dioxide. The trees can reprocess part of the CO2, but only seasonally. The oceans can absorb CO2, but at a fixed rate. Coal gasification strips CO2 ahead of the smokestack, but the CO2 gas must be liquefied and pumped underground at great pressure. CO2 that cannot be reprocessed or stored goes into the atmosphere and, so the theory goes, causes the greenhouse effect.
Regardless of your position or thoughts on GHG and global warming, we are not far from the era when pollution credits are auctioned to competing industries. The government will determine hypothetical annual limits for GHG’s, and fossil-fuel-burning industries will have to pay large sums for the rights to discharge GHG’s.
Pollution credits are not scientific. Instead, they represent the political solution for a problem that has far too many variables for humankind to solve. Count the votes in Congress of the coal-producing states and compare that total to the votes of the non-coal states. West Virginia loses any contest in which “Congress felt it had to take action on global warming!”
In one respect, pollution credits will, for the first time, place an economic cost on air pollution. Prior to this approach, only the cost of abatement equipment has factored into the equation. It’s one thing to determine the price of a car’s catalytic converter but quite another to anticipate the auction bids of American Electric Power and Allegheny Power for credits to generate one million megawatt-hours of electricity. We won’t know the cost of GHG credits until we see it priced at the meter. On the bright side, the air pollution taxes that we’ll eventually pay should restore solvency to Social Security.
A few days after Gov. Schwarzenegger made his mid-century predictions, officials at the National Coal Show in Pittsburgh gave their assessment of 2050. The coal industry predicts an increase in coal usage overall as well as a small increase in market share for coal-fired electric generation. Either each party is mostly wrong in its forecast or one of them is totally wrong. These two predicted outcomes, zero emissions and business as usual, cannot mesh as stated.
Next to electric power generation, coal’s other big market is steelmaking. The industry has far too much capacity in basic steelmaking because there is so much scrap steel being recycled. There is so much scrap steel lying around now that some experts predict that an equilibrium point is near and only a small amount of new steel will be needed annually in the future. Recycling uses far less energy and produces less GHG than does making steel from scratch.
Coal demand has its boom and bust cycles. If the nation takes a hard left turn off the King Coal Highway, as recently evidenced by California’s pace car, then we must ask ourselves: Is the current coal boom the last one ever? Is it the next to last?
We would do well to consider California’s
actions when predicting coal’s future and its impact on West Virginia’s economy.
It is more likely that the Left Coast of America decides our energy future than will our
optimistic friends who attended this year’s National Coal Show.
Copyright 1990-2005 David G. Allen