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Climate Hustle

The war on coal is over. Coal lost.

Posted on 16 October 2017 by dana1981

Last week, Trump’s EPA administrator Scott Pruitt announced, “the war on coal is over.” If there ever was a war on coal, the coal industry has lost. According to a new report from the Union of Concerned Scientists, many old American coal power plants are being retired or converted to natural gas, and new coal power plants aren’t being built because they’ve become more expensive than natural gas, wind, and solar energy:

The share of US electricity coming from coal fell from 51 percent in 2008 to 31 percent in 2016—an unprecedented change. New UCS analysis finds that, of the coal units that remain, roughly one in four plans to retire or convert to natural gas; another 17 percent are uneconomic and could face retirement soon.

Natural gas has now surpassed coal to supply 32% of US electricity (up from 21% in 2008), and solar and wind are up to 10% (from 3% in 2008).

US power

 Evolution of the American power grid mix since 1960. Illustration: Carbon Brief

This trend will continue. As old coal plants continue to retire and be replaced by cheaper renewables and natural gas, their share of the US electricity supply will continue to plummet, and coal will become a fossil fuel in every sense of the word. That’s why American companies continue to invest in cheap, clean renewable energy. As a result, our air and water are becoming cleaner, Americans are becoming healthier, and our carbon pollution is falling.

The shift away from coal poses a challenge for regions in which the local economy depends on the fossil fuel, but the transition is inevitable. A wise economic policy would involve funding programs to help those regions adapt to the change (Hillary Clinton proposed one such plan during her presidential campaign). A recent study showed that Americans are willing to pay a carbon tax with some of the revenue going to assist displaced coal workers. The Trump administration has instead opted to try and slow coal’s inevitable decline.

Trump is desperate to burn more coal

The Trump administration seems hell-bent on causing as much global warming as possible. First there was the historically irresponsible decision to withdraw from the Paris climate agreement, joining war-torn Syria as the only world countries to reject the treaty. Then just a few weeks ago, Trump’s Energy Secretary Rick Perry announced a plan to effectively take coal out of the free market and instead subsidize it with taxpayer dollars to bail out the industry and keep uneconomical coal power plants open. The hypocrisy ran thick – as Perry called for propping up the coal industry with increased taxpayer subsidies, Pruitt called for an end to subsidies for renewable energy:

I would do away with these incentives that we give to wind and solar. I’d let them stand on their own and compete against coal and natural gas and other sources, and let utilities make real-time market decisions on those types of things as opposed to being propped up by tax incentives and other types of credits that occur

Soon thereafter, Priutt announced that Trump’s EPA will repeal the Clean Power Plan. That policy represented America’s most significant effort to cut its carbon pollution, but had been mired in a legal battle over whether the plan exceeded EPA’s regulatory authority under the Clean Air Act. Rather than let the courts decide the case, which many experts felt the EPA would win, Pruitt stopped defending the case in court and ended the program. 

The problem is that according to the US Supreme Court, the EPA is legally required to regulate dangerous carbon pollution. Pruitt’s EPA may propose a dramatically weakened plan that probably wouldn’t survive a court challenge, or he may just try to run out the clock on Trump’s term. As with the disastrous Republican effort to repeal the Affordable Care Act, they don’t have a replacement plan. In the meantime, states and environmental groups will take his Clean Power Plan repeal to court.

Pruitt’s Clean Power Plan repeal justification is largely based on bogus economics, which the Trump administration is using to reduce government estimates of the ‘social cost of carbon.’ This figure – which estimates how much a ton of carbon pollution costs society in terms of damages caused by climate change – is integral to many government policies. A majority of economists think the government’s estimate is too low, but Pruitt’s EPA manipulated the math by ignoring the costs of America’s carbon pollution to the rest of the world, and by using a high discount rate, which essentially says we care more about saving money now than preventing climate damages and suffering for future generations.

However, because renewables and natural gas are now cheaper than coal, an analysis by the Rhodium Group found that the US will meet the Clean Power Plan target of cutting carbon pollution from electricity generation 32% below 2005 levels by 2030 despite its repeal.

Rhodium

 US power sector carbon dioxide emissions projections without the Clean Power Plan in place. Illustration: Rhodium Group

That being said, with the Clean Power Plan in place, the US likely would have beat its targets. As this excellent tool created by Carbon Brief shows, many states like California and Idaho are ahead of the curve, but other states like Texas and West Virginia would have been forced to accelerate their transitions to clean energy, had the Clean Power Plan been enforced.

The ball is in Congress’ court

The good news is that none of the Trump administration’s moves are permanent. 

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Comments

Comments 1 to 16:

  1. Crazy stuff. If Trump is thinking coal exports, it isn't looking good.

    Related article on trends with coal plants globally, and falling global coal production since 2013, and a little piece of "fake news" thrown in.

    www.theguardian.com/environment/2017/oct/16/world-going-slow-coal-misinformation-distorting-facts

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  2. Clean coal really does exist; it's when we leave it in the ground.

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  3. Coal has many uses and ways to bring down costs in power generation will likely be explored. The COP accelerated the conversion of plants to natural gas, but that could slow down if the cost effectiveness of remaining coal fired increases. 

    Many believe thst the dangers of Carbon pollution have been exaggerated while reduction of other particulates remain a concern. Renewables remain a viable alternative in off grid locations, but without subsidies will still have to compete on the open market.

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  4. A large percent of coal miners are techically competent hard working people.  Retrain them to be solar panel installers, wind turbine maintainers and so forth.  There will be more than enough jobs to absorb any who want to retrain and they will work in  a far better environment.

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  5. Coal is the starting point for a huge variety of products.  If used this way coal would last for thousands of years and be enough to fend off the next glacial  period rather than wasting it in a great outburst of carbon dioxide production which will shift the climate the other way with all the disasters this will bring.

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  6. CJones1 @3

    "Many believe thst the dangers of Carbon pollution have been exaggerated while reduction of other particulates remain a concern.'

    Beliefs are often just little more than gut reactions and cosy sounding assurances. Better to read the science as presented in a digestable way on websites like this,  and think, rather than believe.

    And if particulates worry you that much, this is another good reason to phase out coal, as it's implicated in all sorts of respiratory problems particularly with coal miners, and its hard to filter out all the noxious components.

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  7. You keep hearing about "clean coal", but the technology of producing electricity from coal and capturing the CO2 is still in its infancy.

    In Canada, one of the early large-scale installations is in Saskatchewan. Hailed as a breakthrough, it has been far less effective and more costly than originally claimed. It is also a "carbon capture" project where the CO2 is injected into oil-bearing rocks so more oil can be produced. Burning the oil seems to release more CO2 than was captured by the coal-burning plant. This article provides details.

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  8. To the writers at SKS, most probably Dana, PLEASE write something about the situation in Australia where the cabinet has dumped the 'Clean Energy Target'. This is the plan for more renewales to meet their Paris accord goals.

    My 'denier' friends won't shut up aout this, I need a rebutle!

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  9. Jenna, the Australian government's plan is little more than an outline of a possible plan - which does not yet exist.  It is all of 8 pages long and lacks modelling or defined goals, although they will presumably follow via regulation.

    It also carries many of the features of a carbon intensity scheme, to be administered by electricity retailers. 

    It also requires as-yet-undrafted legislation.

    In summary, it is a nothing, going nowhere fast and with slim chance of enactment.  Until modelling and proposed legislation are available, analysis is impossible - whether for or against, environmental or financial.  Its final shape may well be nowhere near the current proposal.

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  10. Singleton Engineer, its just ridiculous that Australia cant sort out  a simple set of goals for clean energy. Plenty of other countries have no problem. 

    Australia also has among the highest electricity prices going, despite abundant wind and solar potential as well as traditional energy. This is just gobsmackingly dumb.

    Its  a political and planning failure, not a failure of  technology or renewable energy. Its a failure of climate denialism and a failure to come up with  a cohesive plan and set of goals.

    Check for yourself: Source: Google search: "Electricty mess in Australia" The first 20 articles or so will give you the background.

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  11. @3:cjones1 

    >>Renewables remain a viable alternative in off grid locations, but without subsidies will still have to compete on the open market.<<

    Read up about the externalities of coal - ie., the massive economic subsidies that the oil and gas industries receive that are nowhere to be seen on any balance sheet except in government departments.

    Start charging the FF industry for the costs of health, restitution of the environment, lost water catchments etc etc and the renewables' subsidies actually look quite manageable.

    Better still, cut ALL subsidies and see how it pans out.

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  12. Jenna, Australia's National Energy Guarantee is almost inconsequential compared with the proposed Carmichael mine that Adani is proposing for the Gallilee Basin.

    I heard someone say that the debate about a carbon price in Australia is irrelevant as long as Australia is a major coal exporter — which is about right.  (I'm not saying we should accept the NEG, just that stopping Adani is a higher priority.)

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  13. nigelj, the problem in Australia isn't so much the price of electricity.  A high per-kWh price at least encourages responsible consumption.

    The biggest problem is that the flat connection fee is ridiculously high, in at least some states.  That problem is particularly bad in states with government-owned for-profit distribution companies, which allowed for blame-shifting.  This particular failure has nothing to do with climate denial.

    Still, I agree that the lack of a carbon price has caused a shortfall of investment in generation too, which may bite us this summer.

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  14. Lacklan @13, I dont think low income people will be too happy with high power prices somehow. There are probably better ways of incentivising efficiency.

    That's interesting about connection fees. By distribution companies I assume it's either the retailer or lines companies? Either way, as a government owned soe making a profit and I assume having at least a partial monopoly this is a crazy formula for rorting the consumer.

    But as you say theres a problem of investment. This is caused by poor planning in turn traced to climate denial combined with partisan political bickering and disunity. Britian has a central agency separate from government dealing with electricity, a great idea that has removed politics as much as possible and it has worked.

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  15. The process of providing the consumer with electricity has three major sources of costs:

    1. Generating the electricity and placing it on the grid.
    2. Transporting it across the grid to the consumer (generally called "transmission and distribution", or T&D)
    3. The losses during the T&D process - the difference between what the consumer's meter says came into the consumer's house or business, and what the generation company's meter says it put onto the grid. The generation company wants to get paid for everything it sent out, and the consumer wants to pay only for what comes out the end.

    In monopoly situations where the same company deals with all costs, they can shift the charges to suit their goals - e.g., increase consumption charges to subsidize connection fees in difficult-to-service areas, or crank up connection fees to get lots of money from people that found ways to minimize consumption, etc.

    T&D is a natural monopoly. Who wants 8 sets of wires running down the street so that 8 different T&D companies can compete for your business?

    As governments move to structuring the industry so that generation is a different company from T&D - hopefully creating competition in the generation sector - then gaming the system so that Someone Else has to bear the costs of your part of the business becomes an increasingly attractive business (or political) strategy.

    Add storage to the mix (generator and consumer want to produce and consume at different times), and finding a way for Someone Else to pay can be very lucrative.

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  16. Bob Loblaw

    Yes lines networks are natural monopolies and this always has the risk of abuse of power and over charging for services. The only real answer is legislative oversight from a strong and ethically minded government acting for the public good.

    In Auckland NZ it works roughly like this. The lines company is Vector a normal profit making enterprise but most of its shares are owned by the AECT which is a tust that operates on behalf of consumers to get all consumers a good deal. It would be most unlikely to rort people with some fee. Dividends are returned to all electricity consumers. I believe AECT would have a code of principles on the public good, but I'm not certain.

    Theres no problem in "theory" with separate generators competing on such a network and it can work, but its hard work. Basically electricity is one big naturally integrated system, so to break it down into separate competing companies, and a separate lines network, can be problematic at all levels, and any efficiencies are  mainly at the administrative end and are somewhat limited. It  needs an awful lot of market rules, spot pricing systems, and we have had enormous problems getting the balance  right, and market operating properly. Nobody is really in charge as such and this is half the problem although, the lines companies have to kind of hold the whole ship together ultimately.

    Im still a bit scpetical of the whole thing. Our power industry seemed to work fine when it was one big integrated government agency, but it was broken up in the name of free market economics, but its been a turbulent ride.

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