Coal's dirtiest year: 2006

Coal's dirtiest year: 2006

28th November 2007

Although the World Watch Institute in Washington admits that some data may be questioned, there is little doubt that the menace of coal burning is increasing across the globe.

According to the Institute:

* In 2006, China brought online about as much coal power capacity each week as the United States and India together during the entire year

* Increase in China's coal consumption accounted for more than 70 percent of global growth in 2006 and more than 60 percent of increase in world coal use over the past decade.

* In 2006, China led world coal use with 39 percent of the total, followed by the United States (18 percent), the European Union (10 percent) and India (around 8 percent)

* Coal combustion is China's largest source of outdoor air pollution, to which it attributes 350,000–400,000 premature deaths a year.

Coal Use Rises Dramatically Despite Impacts on Climate and Health

World Watch Institute

28th November 2007

In 2006, coal accounted for 25 percent of world primary energy supply.

Due to its high carbon content, coal was responsible for approximately 40 percent of the carbon dioxide (CO2) emissions from fossil fuels, despite supplying only 32 percent of fossil fuel energy.

Management of this plentiful but heavily polluting energy resource has tremendous implications for human welfare, the health of ecosystems, and the stability of the global climate.

World coal consumption reached a record 3,090 million tons of oil equivalent (Mtoe) in 2006, an increase of 4.5 percent over 2005.

China led world coal use with 39 percent of the total. The United States followed with 18 percent. The European Union and India accounted for 10 percent and 8 percent, respectively.

In terms of growth, China is even more dominant. The increase in China's coal consumption accounted for more than 70 percent of global growth in 2006 and more than 60 percent of the increase in world coal use over the past decade. India, responsible for just over 10 percent of the growth in the last 10 years, ranks a distant second.

According to preliminary data, five new coalfired generators with a combined capacity of 600 megawatts came online in the United States in 2006, while India added 930 megawatts of capacity.

In startling contrast, China brought online about as much coal power capacity each week as the United States and India together did over the entire year, adding an unprecedented 90 gigawatts in 2006.

Several studies have highlighted the uncertainty of China's energy statistics, however. For example, some of the capacity reportedly added is likely to have been unauthorized projects completed earlier that were retroactively approved in 2006. Nonetheless, the magnitude and trend of China's capacity additions and associated appetite for energy from coal are certain.

Worldwide, the extraction and combustion of coal have severe health and environmental impacts. In the United States, 47 workers were killed in coal mine accidents in 2006, while China's State Work Safety Supervision Administration reported a staggering 4,746 deaths. And the pollution emitted by coal-burning power plants and factories affects the health of millions of people.

A recent World Bank study identified coal combustion as China's largest source of outdoor air pollution, to which it attributed 350,000–400,000 premature deaths a year. Though these numbers were censored by Chinese authorities, at other times officials have acknowledged that coal power plants often do not comply with environmental regulations.

Even in the United States, which is far ahead of China in terms of pollution control, the struggle to control hazardous emissions from coal power plants continues. In October, American Electric Power agreed to a record environmental enforcement settlement that requires the company to reduce annual sulfur dioxide and nitrogen oxide emissions by over 800,000 tons. The resulting improvement to air quality is expected to produce health benefits worth $32 billion per year.

The longevity of coal-fired power plants and the abundance of coal suggest that decisions on new capacity made today will have enduring consequences.

The average age of currently operating U.S. plants is 47 years, indicating that plants built today are likely to remain in operation for many decades. Coal's abundance is apparent in reserve-to-production ratios, which based on current extraction rates exceed 200 years in the United States and India. The figure in China is roughly 50–70 years, with an estimated total coal resource that allows room for plenty of reserve growth.

Recent forecasts of world coal consumption in 2050 range from 2,900 Mtoe in a scenario published by the International Energy Agency (IEA), which assumes adoption of a stringent, worldwide carbon policy, to 10,700 Mtoe in a business-as-usual scenario published by the Massachusetts Institute of Technology (MIT). Meeting any climate stabilization target will require control of coal emissions. Nicholas Stern, who led an influential study on the economics of climate change, says that "unless we get coal under control, we're not going to be able to solve this problem." After reaching this same conclusion, numerous studies identify carbon capture and sequestration (CCS) as a way to reconcile coals importance as an energy resource with its role as a major contributor of CO2 emissions.

Carbon capture and sequestration from a coal-fired power plant involves four key steps: isolate a relatively pure stream of CO2 from the combustion source, pressurize the captured gas and transport to the storage site, inject the CO2 into the storage reservoir, and monitor the storage reservoir for stability and leakage. Each of these steps is already used in some commercial applications, mostly in oil and natural gas production and processing operations.

One project stands out for having successfully integrated all four steps, albeit not on a power plant. The Great Plains Synfuels plant in North Dakota produces synthetic natural gas from lignite coal. Since 2000, the facility also captures CO2 from the "synthesis gas," an intermediate product, compresses that CO2, and transports it 300 kilometers by pipeline to the Weyburn oil field. There the flow of CO2, currently about 8,000 tons per day, is injected into the oil field to enhance oil production. A measurement study headed by the IEA concluded that the CO2 injected at Weyburn will be sequestered there for thousands of years.

The overall climate benefit of this particular project is marred by the fact that the extra oil production it enables, an estimated 130 million barrels, will itself release over 50 million tons of carbon dioxide when burned.23 Future CCS aquifers rather than active oil fields in order to provide the scale of benefit required. The technology needed is not significantly different, but the project economics are currently much more challenging.

With the technical feasibility of CCS largely proved by Great Plains Synfuels and other demonstration projects, cost is the largest single factor preventing the deployment of this technology. Initial interest focused on applying CCS to advanced power plants known as an integrated gasification combined-cycle (IGCC) plants in anticipation of a lower overall project cost. An IGCC plant converts solid coal into a synthetic gas, from which CO2 can be more easily extracted, and then uses that gas to produce electricity with relatively high efficiency. It is estimated that electricity produced by an IGCC power plant equipped with carbon capture will cost 35 percent more than electricity from a conventional plant. Adding CCS to a conventional power plant could increase the cost of electricity by upwards of 60 percent.24 Transport, injection, and monitoring of the CO2 will push these price premiums even higher. Thus without a sizable cost applied to carbon emissions, CCS is prohibitively expensive.

At present, cost estimates for coal-fired power plants equipped with CCS include a high degree of uncertainty, however. If and when the various CCS processes are commercialized, the technology that offers the lowest cost option will almost certainly vary from one project to the next, depending on many factors, including the quality of coal and whether the plant is new construction or a retrofit.

Numerous research and development projects are working to reduce costs, and demonstration projects have been proposed in Europe, North America, Australia, and China. The U.S. Department of Energy suggests that large-scale units may be completed around 2020, but an MIT study published this year finds current programs to commercialize carbon sequestration to be "completely inadequate," highlighting the need for further demonstration "at-scale" and advanced measurement, monitoring, and verification of storage. Pilot operations scheduled to come online in 2007/08 may validate certain capture technologies, but the most aggressive proposals for at-scale applications of integrated CCS to coal-fired power plants target 2011/12. In the meantime, each new coal plant will be a major source of additional CO2 emissions.

Growing acknowledgement of the climate, health, and environmental consequences of coal use have led to mounting political opposition to new coal plants in the United States and Europe. A European Union commitment to reduce CO2 emissions at least 20 percent by 2020 presents a formidable obstacle to any new coal power there that does not incorporate CCS.

Though a similar U.S. commitment has not been made, Senate majority leader Harry Reid recently took a stand against new coal power plants, and the state of California effectively banned state utilities from building new plants without CCS. In mid-2007, the uncertain outlook for coal power resulting from burgeoning anti-coal activism was cited by Citigroup analysts in their decision to downgrade the stocks of all coal companies.

On a global scale, the declining fortune of coal in industrial countries is overshadowed by its dominance in the energy mix of large developing economies. In China and India, coal maintains a preeminent role in plans to meet sustained, rapid growth of energy demand. A true reconciliation of the coal resource and the climate risk that it presents must soon confront coal power on its new home turf.