Coal is trashing the environment, but also lifting people from poverty. Like it or not, the fuel isn’t budging from the world’s energy mix.
On a spring day in 2012, a Union Pacific train ground to a stop outside a sprawling construction site in Fulton, a blink-and-miss-it town in southwestern Arkansas. Piled high in the train’s 135 cars was the first batch of black coal from Wyoming, about 16,000 of the 2 million tons needed annually to feed the brand-new John W. Turk, Jr. Power Plant, set to go online within a few months. When officials from the Southwestern Electric Power Co. (SWEPCO) finally flipped the switch on this 600-megawatt, $1.8 billion structure, it was unusual enough: That year, only four other coal-fired plants in the United States opened their doors. But the Turk plant represented something more, a genuine first of its kind in the country: an ultra-supercritical coal burner fitted with cutting-edge metal alloys that allow it to burn low-sulfur coal at exceedingly high temperatures and pressures.
That is to say, the Arkansas plant burns coal more efficiently than just about any of its 550-odd peers in the country. Packed with every sort of scrubber to clean up the nasty bits, Turk spits out fewer of the smoggy air pollutants and a lot less of the greenhouse gases that cause global warming. It also can be fitted with new gear to capture greenhouse gas emissions, when such solutions become economically viable. Despite the sleek upgrades, it’s still a coal-fired plant, of course. Within its first full year in operation, Turk belched some 3.4 million metric tons of greenhouse gases into the atmosphere, making it overnight one of Arkansas’s five biggest carbon polluters. Nevertheless, the plant bears little resemblance to the hulking, inefficient giants that have come to dominate the U.S. power sector in recent decades. Those old plants burn coal to generate electricity, but they do it badly. Most fuel shoveled into their giant boilers is turned into heat and smoke, and simply wasted; only about 33 percent of the coal is turned into power. For ultra-supercritical plants such as Turk, 40 percent of the coal becomes electricity. “It’s a totally different animal,” says Nick Akins, the president and chief executive officer of American Electric Power, SWEPCO’s parent company and one of the biggest utilities in the United States. “It’s like comparing a ’57 Chevy to today’s Corvette.” A different animal, perhaps, and one that—despite the fuel’s bad reputation—shows how the U.S. coal industry might be saved from extinction.
In 2013, Barack Obama’s administration unveiled tough standards to limit greenhouse gas emissions from new coal-fired plants, and it is working on rules that would do the same for existing power plants. If the regulations were implemented, estimates the U.S. Environmental Protection Agency (EPA), up to one-fifth of the country’s existing coal capacity could be pushed into retirement. These challenges have combined with the glut of cheap natural gas—which plummeted from a high of about $14 per million British thermal units in 2008 to just over $2 per million four years later—to make new coal-fired power plants a rarity in the United States.
Despite all this, coal not only remains the alpha in the U.S. electricity mix today—accounting for about 40 percent of the power generated in the country (at 27 percent, natural gas comes in second)—but it will be a fixture well into the future. The U.S. Department of Energy expects coal-fired plants to be as big in 2040 as clean technologies, such as wind and solar, will be.
Globally, more coal is mined, moved, and burned today than at any time in history. And, says the International Energy Agency (IEA), global coal consumption will only keep growing another 15 percent over the next quarter-century, thanks almost entirely to big and fast-growing economies in Asia.
Simply put: While the United States is just now finding ways to try to keep coal a viable part of its power system, the rest of the world is riding even greater technological advances to a brighter future for the dark fuel. China alone has about 50 plants that are at least as big as and more efficient than Arkansas’s Turk plant; Germany and Japan in the past decade have built several ultra-supercritical coal-fired plants as good as or better than American Electric Power’s finest. Still, all those gleaming plants, along with the inevitable controversies that surrounded their construction, underscore the fact that the world today faces two contradictory and interrelated challenges: While billions of poor people in the developing world need a lot more energy to pull them out of poverty and drive economic development, improve life expectancies, and bolster human health, the world also faces a looming and possibly existential threat from climate change—caused in large part by greenhouse gas emissions that are the bitter harvest of the world’s reliance on coal and other dirty fossil fuels over the past several centuries.
These twin imperatives will clash head-on in November and December this year, when world leaders meet in Paris to try to cobble together something they have never been able to achieve: a legally binding global agreement for all countries to cut greenhouse gas emissions. Coal has been both bane and blessing for the world for a millennium, and the black fuel will not go gently from its place atop the global energy mix.
It’s fitting that the future of coal is found in Asia, because its history began there too, long before Britain and the rest of Europe turned coal into the building block of the modern world. China began to harness its big coal fields for serious industrial purposes by about 1000, making the sprawling city of Kaifeng, a few hundred miles south of Beijing, the soot-blackened epicenter of China’s first, and aborted, industrial revolution. For nearly two centuries, the Chinese diligently worked to craft a booming metals industry, and by 1098, the country’s poverty relief laws put special emphasis on making sure that poor people had access to coal, the only fuel mandarins even bothered to regulate. In fact, among the many novelties that later captivated Venetian traveler Marco Polo were the “black stones” the Chinese used in their hearths. When he returned to Italy, he brought news of this novel source of energy.
At that time, other parts of medieval Europe were starting to dabble in coal, which was readily available in France, Belgium, and Wales. And before long, ships carried coal up and down the North Sea, a sight that became so prevalent that, by the end of the 13th century, “sea-coal” became the term used to distinguish the fuel from “charcoal.” As the seas reflected coal’s rising importance, so too did the European landscape. The continent’s once- endless forests, which had provided wood for fuel, gave way to dank and dangerous coal mines. Homes in England were redesigned to feature long brick chimneys to whisk away coal smoke. By the middle of the 16th century, historian Ian Morris has noted, “the average Londoner was already burning nearly a quarter of a ton of coal each year.” The pollution, however, didn’t go unnoticed. By then, English kings had toyed with torture, taxes, and bans on burning coal due to its noxious side effects—but to no avail. Queen Elizabeth I, toward the end of the century, tried a novel solution to address visible environmental damage by prohibiting coal burning while Parliament was in session; again, this was not successful. (This ban, however, neatly anticipated the strategy of modern Chinese leaders, who, four centuries later, periodically curb coal use ahead of big international events, such as the 2008 Summer Olympics in Beijing.)
Coal fueled Britain like no other country before. By the 18th century, the English and Welsh countrysides were dotted with mines. To satisfy the country’s demand, coal miners dug deeper and deeper into the earth until they tapped underground water tables; flooding became a constant concern. That headache, though, inspired innovation. Thomas Newcomen, a British ironmonger and Baptist preacher, turned to coal’s power and, around 1710, created the first practical steam engine that pumped water from great depths, enabling miners to produce more coal more cheaply. Within a few decades, these engines were improved, and they ultimately powered Britain’s textile looms and the iron horses of the railroad industry. In fact, the need to move bulky coal from mines to factories led to one of Britain’s most important, if little-remembered revolutions: the creation between 1760 and 1830 of a sprawling, internal system of canals—ultimately snaking some 4,000 miles—that enabled coal transport, as well as the delivery of manufactured goods around the rest of the country.
But coal’s importance wasn’t limited to economic development. Much as the quest to secure access to petroleum has shaped foreign policy for the United States, Europe, the Middle East, and Asia over the past century, coal loomed over 19th-century geopolitics. Beginning around the middle of that century, coal-fueled steamships largely replaced sailboats in the world’s merchant marines and navies—for the first time, global shipping was not hostage to the fickleness of winds and tides. Yet coal-burning vessels required huge amounts of the black rock, which, in turn, required coaling stations in order to refuel while cruising. Consequently, grabbing and defending such overseas stations became a primary concern of most great powers. Those that had access to coal depots in every ocean could move around the world with ease; those without were at the mercy of other countries.
Britain’s hold on distant ports in Sierra Leone, Yemen, and South Africa, among other places, owed as much to the need to shovel tons of coal into hungry ship boilers as it did to any other imperial mission. As renowned British historian Niall Ferguson has noted, the string of overseas coaling stations, from Sierra Leone to Cape Town to Aden, formed the sinews of Britain’s globe-spanning maritime empire. And that was true for newer, informal empires as well: In the wake of the 1898 Spanish- American War, the United States grabbed Hawaii and Guam in part because of their late 19th-century appeal as stepping stones for the U.S. coal-powered fleet to cross the Pacific. The Roosevelt Corollary to the Monroe Doctrine—which asserted the U.S. right to use force to keep Europeans out of the Western Hemisphere—was one way for famously pro-navy President Theodore Roosevelt to neuter any threats: Without coaling stations in the Americas, European fleets would be hard-pressed to challenge the United States.
The growing industrial might of Europe, as well as an endless appetite for coal, further fueled existing and soon-to-be-lethal tensions. Alsace and Lorraine created strain between France and Germany for the half-century leading up to World War I. Part of that was driven by simple nationalism, but the region was also very rich in coal and iron, making it a highly coveted piece of the geopolitical puzzle. In fact, the one provision of the draconian Versailles peace treaty that most concerned economist John Maynard Keynes wasn’t that Germany had to accept blame for the war; rather, it was that the Allies had completely sundered Germany’s coal industry, which, he darkly foretold, would again lead to economic revolution and bloodshed.
Decades later, the center of the global economy is no longer in Europe, but in Asia. However, the same problems pertain: Are China, India, and the other big Asian economies condemned to repeat the Western, coal-fired experience?
As history shows, without energy there is no economic growth. From 1000 to 1820, global growth averaged about 0.2 percent a year. Since then, growth has been 10 times higher. Modern prosperity, in other words, is built upon the vast amounts of chemical energy first unleashed by coal. And there has been no better student of this lesson than China. It has relied on smoldering coal to achieve a nearly four-decade economic metamorphosis— lifting more than 600 million people out of poverty, even as it housed them in polluted cities—that has transformed a once-backward agrarian state into the world’s second-largest economy.
Meanwhile, this economic miracle has created a large, relatively wealthy Chinese middle class that has brought an ecological consciousness to the Middle Kingdom. Environmental nightmares, especially the choking air pollution fundamentally caused by the country’s overwhelming reliance on coal, have in recent years sparked huge protests by people questioning the legitimacy of the unelected leadership in Beijing. But with state subsidies still set at about 3 percent of China’s GDP in 2011, according to the International Monetary Fund, the country’s consumption of dirty energy will continue for decades, both underpinning and undermining the country’s government.
Even before China’s top leaders announced a “war on pollution” in the spring of 2014, the country had been fumbling toward a solution, attempting to harness the market to tackle smog and launching seven regional pilot cap-and-trade programs. (Like other similar plans, early Chinese experiences have been frustrated by the market price for coal pollution because the price is too low to discourage the fuel’s use on simple economic grounds.) But China also set out to employ more direct, top-down methods to clip coal’s wings. It introduced ambitious targets to reduce coal consumption by 2017 in some particularly dirty cities and provinces, including Beijing. Other provinces are under orders to reduce their rate of growth in coal consumption. If all targets are met, says environmental group Greenpeace, China could save 350 million tons of coal—or 10 percent of current consumption—by 2017. The country’s latest five-year plan, the economy’s master blueprint, also calls for a cap on national coal consumption of about 4.2 billion tons in 2020, compared with consumption of about 3.6 billion tons in 2013.
As history shows, without energy there is no economic growth.
China is also looking to diversify its energy sources. In 2014, in a bid to get more natural gas, which emits half the carbon dioxide that coal does, Beijing inked a gas deal with Moscow worth hundreds of billions of dollars. Months later, Chinese President Xi Jinping and Obama shook hands on an ambitious climate deal under which China will seek to peak its greenhouse gas emissions sometime around 2030. Although China announced no binding emissions limits, it said it hopes to ramp up its share of zero-carbon power sources to 20 percent by 2030. To achieve that goal, China would need to build between 800 and 1,000 gigawatts of clean power in 15 years. In other words, between now and 2030, China would have to essentially duplicate the entire U.S. electricity system, but only with renewable energy and nuclear power—a herculean task, given that the zero-carbon energy capacity from wind, solar, hydro, and nuclear power throughout the entire world today amounts to about 1,800 gigawatts.
As world-beating as China’s growth in clean energy has been in recent years, it still lags behind coal’s growth. In 2013, the energy generated from new fossil fuel facilities (almost exclusively coal-powered) was 27 times that of new solar power. And while China’s economy grows and a proliferating middle-class charges smartphones and cranks up air-conditioners, the population will require more energy than before. Today, each person in China uses, on average, some 3,300 kilowatt-hours of electricity per year—a fraction of the energy consumption in rich countries. (Germany uses about 7,000 kilowatt-hours per head, South Korea over 10,000, and the United States more than 13,000.) To meet its current demand, China has already built about 500 gigawatts of coal-fired power plants in the past decade—that’s half as big as the entire U.S. power sector. To respond to future needs, analysts expect that China might need to bring online about 300 additional gigawatts of coal power by 2020.
While access to energy explains the economic growth that the world experienced during the past two centuries, huge pockets of the globe today—where people use less energy, make less money, and live shorter lives than their energy-flush counterparts—are just getting warmed up. India is one such place.
Hoping to steal a page from China’s recipe book for economic success, India is gunning to revitalize its economy by, among other things, linking to the grid its 300 million people who lack access to electricity. In 2014, India laid out its plan to double the country’s production of domestically mined coal—to more than 1 billion tons per year—by the end of the decade. A few months later, Prime Minister Narendra Modi started paving the way, sweeping away environmental regulations meant to hamstring the pell-mell development of dirty industries—a strategy that doubles down on the original Chinese blueprint in order to try to lift hundreds of millions of Indians out of poverty. India will surpass the United States to become the world’s second-biggest coal addict by 2020, the IEA now estimates.
“India’s development imperatives cannot be sacrificed at the altar of potential climate changes many years in the future,” Piyush Goyal, India’s minister of power, coal, and renewable energy, said in late 2014, according to the New York Times. “The West will have to recognize we have the needs of the poor.” Goyal has waded right into the middle of what environmental writer David Roberts has said is the “signal moral issue of our time.” Which is the greater evil: helping cause climate change by investing in much-needed but still-dirty energy projects, or condemning the world’s poor to their lot? Does the fight against the first evil preclude real progress in the second? Or is there a way to develop clean, affordable energy that both protects the environment and promotes growth by, for example, building coal-fired plants that can capture and bury their harmful emissions?
For the developing world, as India’s struggles show, simply getting power at all is a huge challenge. Globally, for the 1.3 billion people who lack electricity of any sort, shunning a gleaming, new, reliable coal-fired power plant on climate-change grounds is almost an impossible luxury. Compare: Oklahoma has about 23 gigawatts of installed power plants to serve fewer than 4 million people; Pakistan, too, has about 23 gigawatts—while desperately trying to bring power and light to a population that is almost 50 times larger.
The problem is especially acute in areas of the world that are still growing quickly. Out of the more than 900 million people living in sub-Saharan Africa, fewer than 300 million have access to electricity. For instance, fewer than 10 percent of people in the Democratic Republic of the Congo can plug anything into a wall; fewer than 20 percent of Kenyans can do so. Even populous countries with enough money to fund nuclear weapons programs struggle with the challenge of providing power for their people: One out of 10 Pakistanis goes completely without electricity, and many more suffer from infrequent and unreliable access to power. But even when the world’s poor have a plug, they don’t use it in the same way that people in rich countries do. Per capita electricity consumption in Congo is a scant 105 kilowatt-hours per year. That’s enough juice to keep a single 100-watt light bulb lit for about six weeks. In Kenya, annual per capita consumption is a mere 155 kilowatt-hours; in Pakistan, that number is just 449 kilowatt-hours per person.
“Inadequate energy infrastructure risks putting a brake on urgently needed improvements in living standards,” the IEA concluded in 2014 in its first-ever special examination of sub-Saharan Africa’s energy needs. Bill Gates, the philanthropist and co-founder of Microsoft, says that his travels through Africa have brought home the desperate plight of students trying to study under street lamps. “In the rich world, we are right to worry about conserving energy, but in poor places, people need more energy,” he wrote on his blog last June. He wants energy to be both affordable and clean, in order to fight energy poverty and climate change at the same time, and he stresses the need for poor people to have access to the kind of energy-fueled economic development that made the Western world what it is. (He is investing in novel nuclear energy technologies.)
Rich countries, led by the United States and those in Western Europe, have essentially made climate change, rather than alleviating energy poverty, their main energy-policy focus. Meanwhile, outfits such as the World Bank and other Western-dominated multilateral lending organizations have all but banned funding for new coal-fired plants in the developing world. Even the poorest parts of the developed world are finding it hard to convince the World Bank to help them; Kosovo, in southeastern Europe, is having trouble getting the body to underwrite the construction of a modern coal-fired power plant that could help alleviate crushing power shortages that cripple its economy. Environmental campaigners around the world have urged the financial institution to consider renewable energies such as wind and solar power rather than dirty, brown local coal. That’s the kind of recipe the Obama administration favors for other benighted locations. Its “Power Africa” initiative, a plan to bring energy to the parts of Africa that don’t have any, is heavy on small-scale renewable energy.
But for much of the world, coal is merely a dirty fuel, not a dirty word. And the idea of the rich world speaking of the urgent need to fight climate change by killing coal is shortsighted, some critics argue. Pakistani investor Irfan Ali, who now lives in the United States, says, “Such policies and discussions are relegating literally millions of people to poverty.” For more than a decade, Ali has led a quixotic fight to drum up interest in an untapped coal field in the Thar Desert in southeastern Pakistan. The goal of the consortium he manages, TharPak, is to use advanced technology to build coal-fired plants capable of capturing their carbon emissions—a big green step beyond Arkansas’s cutting-edge Turk plant—and thereby turn a vast natural resource into a driver of economic development in a region that could use some.
Inspired by America’s bountiful reserves—such as the massive coal deposits found in Wyoming’s Powder River Basin, home to more than 40 percent of America’s coal—Ali says that growth shouldn’t be left untapped in the ground. “If you look at what [that coal] basin has done for the United States historically,” he says, “it is in my mind one resource that rivals, if not exceeds, the positive economic impact on the economy that oil has had.” Thar’s coal reserves, if used for power, could provide Pakistan with fuel for decades—if not centuries—the Pakistani government and private companies say.
A few years ago, Ali tried to lasso support from Washington for the project, arguing that energy-powered economic development will contribute to increased security in Pakistan. Despite the project’s “technical and economic development merit,” the U.S. Agency for International Development wrote in a letter, funding for Pakistan is “currently directed to other priority projects.” Ali vows to continue with or without U.S. help, and he has been in talks with several firms in China—which, as it happens, is investing more than $30 billion in the next five years to upgrade Pakistan’s power sector.
Trying to ensure an energy future for the developing world by turning to the template of the past dismays plenty of people. Many environmentalists heartily reject the notion that 20th- century ideas of energy—including big, centralized power plants sending out electricity over a grid—are the only or best way for meeting power needs in the new century. Just as the advent and widespread deployment of mobile phones enabled many poor countries to leapfrog a generation in their communications development, energy plans should shed the architecture of the past, they argue.
“You don’t see anybody standing up and saying we need to roll out landline telephones to every rural village,” says Justin Guay, one of the leaders of the Beyond Coal campaign at the Sierra Club, the environmental group that battled the Turk plant’s construction for years. The lack of energy access in today’s developing countries, he says, is a sign that centralized energy development is not the answer. Better to take advantage of huge technological and economic advances in small-scale renewable energy, he says, in order to bring clean-power options to isolated regions. “I think there’s a real big gut-check question the development community needs to ask itself: If grid extension and the construction of power plants and coal are just so wonderful for poor communities, why has it failed so miserably, and why do we expect any different outcome if we double down on that existing approach?”
The reliance on coal indeed comes with heavy costs. Just look at China. The country’s air pollution, much of which can be chalked up to its reliance on coal, costs at least 3 percent of GDP per year—or more than $250 billion—according to World Bank and Chinese government estimates. The Natural Resources Defense Council estimates that China’s air pollution kills almost 700,000 people a year. Meanwhile, the U.S. EPA expects that the Obama administration’s tough, new power-plant rules will save between 2,700 and 6,600 lives per year by reducing the incidence of respiratory diseases from power-plant emissions. The National Research Council concluded a few years ago that coal-fired electricity imposes a whopping $65 billion penalty on the U.S. economy each year due to air pollution. Indeed, by some measures, coal’s nasty side effects more than cancel out the economic benefits provided by the electricity it generates. Several economists concluded in a 2011 paper published in the American Economic Review that burning coal for electricity in the United States produces as much as $5 of damage for every $1 of benefits.
Many environmentalists reject the notion that 20th-century ideas of energy are the only or best way for meeting power needs in the new century.
Yes, coal might kill and costs money, the fuel’s champions counter, but so does lack of electricity. “As far as energy poverty is concerned, not having electricity is more detrimental to public health,” argues American Electric Power’s Akins.
Poor families in places without power often rely on dirty cookstoves—a major source of indoor air pollution that leads to more than 4 million deaths every year, according to the World Health Organization (WHO). Or take the Ebola virus: The WHO hopes to have a couple of million doses of a vaccine ready this year—but they will be useless if they can’t be stored at minus 80 degrees Celsius, a very tall order in West African countries with low electricity-access rates and frequent blackouts. Similarly, infant mortality in countries without reliable access to energy is much higher than in the developed world, partly because so many things that could improve the quality of life are missing, from reliable power for hospitals to power plants needed to run water-purification systems. In Congo, the infant mortality rate is 86 deaths per 1,000 live births; in Pakistan, it’s 69 per 1,000, compared with just 3 in Germany and 6 in the United States.
By contrast, China’s remarkable progress in reducing infant mortality in recent decades goes hand in hand with the country’s breakneck, coal-fired growth. In 1980, China’s infant mortality rate was 48 deaths per 1,000 births—a level roughly comparable to Kenya’s or Ethiopia’s today. Now, China’s infant mortality rate is just 11 per 1,000 births. And even though recent research suggests that air pollution is lowering Chinese life expectancy, that’s in part because life expectancy had increased by about eight years between 1980 and today.
This year, even while all eyes will be on developing countries to see whether they finally agree to share the pain of mandatory emissions reductions at the big climate conference, India will be opening its coal sector to fresh investment in hopes of ripping out tons of coal from the ground. China, for all its climate aspirations and clean-air concerns, will cut the ribbon on about 30 gigawatts of coal-fired plants, enough to power all of the Netherlands. Even in the United States, the fight over energy’s past, present, and future will rage on in 2015 with the opening of a cutting-edge plant: The Kemper facility in Mississippi will be the first large-scale coal-fired plant in the country that can capture and store most of its carbon emissions. It could show the way for the perfect marriage between coal’s reliability and green concerns—were it not for its outsized $5 billion-plus price tag, which makes it one of the most expensive power plants ever built in the United States.
Meanwhile, people in Kosovo will discover if rules are meant to be broken when the World Bank—weighing the evils of dirty energy against the evils of none at all—decides whether its coal-financing ban still allows it to back coal-fired plants under exceptional circumstances, such as a lack of any real potential for cleaner alternatives. “There are circumstances out there where there is just no other option,” said World Bank President Jim Yong Kim in a 2014 speech. If Kosovo ultimately has no realistic alternatives to a new coal-fired plant, he said, “I think we would have to consider it because people have a right to energy.”