Optimists and politicians like to remind us that U.S. exports are booming. Unfortunately, so are imports.
The trade deficit in March, from Calculated Risk
An increasingly large part of the "rosy" exports picture centres around our energy exports, which means coal exports. I was pleased to see Worse Than Keystone by Alyssa Battistoni, which appeared in Salon last Friday. Alyssa actually did some research, and provided some useful links, which always makes me happy.
Environmentalists are focused oil and gas, but a bigger carbon disaster may be brewing in the Pacific Northwest
Coal is without question our dirtiest fuel source: When burned, it dumps toxins like mercury and nitrogen oxides into the air and packs an outsize punch when it comes to carbon emissions. Since America has a lot of it, though, we’ve tended to use a lot: Historically, around half our electricity has been generated by coal combustion plants. But as a result of sustained anti-coal activism, low prices for natural gas, and new EPA regulations on power plant emissions, Americans are using a lot less coal than we used to, and the future of the sooty stuff in this country is looking dim. So the U.S. coal industry is pinning its hopes on China.
The United States is indeed burning a lot less coal than it used to, mostly due to very cheap natural gas, which is the crack cocaine of the power generation industry. Let's look at some data before we move on.
The coal share of U.S. primary energy consumption has decreased dramatically in the last 5 years. Ignore the EIA forecast. Source.
Year after year, coal was used to generate about 49% of American electricity. In 2011 that share is down to 42%. Natural gas used to fuel about 20% of our electricity. Source.
But if America is burning less coal, that simply means that we're exporting a lot more than we used to. From Alyssa—
While historically most of our exported coal has gone to Europe, U.S. exports to China increased 176 percent between 2009 and 2010, and that number is likely to keep rising as the Asian market for coal continues to expand. The prospect of shipping coal across the Pacific is even more appealing considering that Western states like Wyoming and Montana have vast coal reserves in the Powder River Basin, one of the largest coal deposits in the world.
But while the incentives to drastically scale up Western-mined, Asia-bound coal exports exist, the infrastructure to do so does not — at least, not yet. Coal mining companies are hoping to change that by building up to six coal export terminals in the Pacific Northwest — three apiece in Washington and Oregon — with the combined capacity to ship around 150 million short tons of coal to Asia each year. These new plans would more than double 107 million short tons of coal the U.S. exported in 2011.
And here's the bottom line from an environmental perspective.
But good news for the coal industry is bad news for the climate, and whether Powder Basin coal is burned here or abroad, it’ll add the same amount of greenhouse gas emissions to an already-warming atmosphere. In 2007, Powder Basin coal alone was responsible for an estimated 877 tons of carbon, around 13 percent of the U.S. total; Eric de Place at the Sightline Institute crunched the numbers and found that the coal shipped by just two of the proposed terminals would be responsible for more annual emissions than the tar sands oil carried by the Keystone pipeline.
As Bryan Walsh points out, many industrialized countries have cut their own carbon footprint by exporting carbon-intensive fuels to be burned elsewhere, essentially employing an accounting trick rather than actually reducing global emissions.
I think I've said enough about "Wild" Bill McKibben, who focuses on the oil & gas industry while the coal industry, which is the real culprit, mostly gets a free pass. The numbers Alyssa cites speak for themselves, but now she goes off the rails. Now we get some delusional thinking.
But climate activists aren’t going to let us get away with it if they can help it: Having largely succeeded in stopping Americans from burning coal, activists are trying to make sure no one else burns it either. And, as with Keystone, they’re seeking to accomplish their climate goals by blocking fossil fuel infrastructure from being built.
Hang on. Wait a minute. Hold it right there. If I am reading the data correctly, and I'm pretty sure I am, it was the abundance and low price of natural gas which largely succeeded in "stopping" Americans from burning coal, not climate activists. And remember, as the third chart above shows, we still get 42% of our electricity from coal-fired steam generators.
And what did that abundance and those low prices depend on? Fracking! Drilling in shale gas reservoirs in the Marcellus, the Haynesville, and other domestic plays. In fact, gas has gotten so cheap that dry gas producers are moving to liquids-rich deposits, which they can still extract some profit from. See my post Shale Gas Production Is NOT Profitable At The Current Price.
Needless to say, environmentalists have been very upset about shale gas drilling and have been able to do precisely nothing to stop it. The low price of natural gas has put the kibosh on shale gas production. This development in the energy markets had a nice side-effect for climate activists in so far as coal production for domestic consumption has been dramatically reduced. Unfortunately for these activists, who seem to believe they are actually responsible for curtailing power generation from coal, the United States now seeks to export global warming rather than produce it here at home.
Alyssa's story goes on to detail how environmentalists plan to "stop" the proposed coal export terminals in the Pacific Northwest. She's not completely delusional.
Of course, all the usual caveats still apply: The coal being exported still represents a small fraction of global carbon emissions; coal may be replaced with other carbon-intensive fossil fuels; dealing with climate change requires system-wide changes rather than a patchwork of stopgap local measures. While the battle continues in the Northwest, coal may find other routes out of the country...
At the same time, the argument for why coal exports matter actually is pretty simple: as Grist’s David Roberts sums up, “to prevent the climate from spiralling forever out of control, we’re going to have to leave most of the remaining fossil fuels in the ground … we desperately need to keep coal in the ground anywhere and everywhere it’s possible.”
American activists can’t stop Australia or Indonesia from selling China coal, but if they can manage to stop American coal from leaving the country or being used within its borders, a huge amount of coal — and the carbon it contains — will stay put. So while it’s a big if, it’s a battle many feel they have no choice but to fight.
Good luck with that.
By. Dave Cohen
Dave Cohen writes the blog Decline Of The Empire. His commentaries cover a wide variety of subjects, including the American economy & macro-economics, the oil markets, peak oil, politics & policy, environmental issues and global warming. Dave was writing search engine software before he gave up on the industry in 2005 after 20 years as a software engineer. Dave has a M.A. in theoretical linguistics and was working on a Ph.D. before leaving The University of Texas at Austin in 1985 to do research in Artificial Intelligence. He attended the University of Chicago as an undergraduate.