Highlights

  • Coal use has been growing rapidly in the 21st century because it effectively delivers the very high energy surplus necessary to drive economic growth in the developing world.
  • Developing nations will most likely continue exploiting their abundant coal resources despite increasing environmental concerns.
  • If climate science is correct, this situation will necessitate a very large scale CCS rollout over coming decades.

Introduction

In the previous two parts of this series (12), we discussed why CCS is likely to do very well in a future climate constrained world and how CCS might behave in a policy environment of rapid reactive decarbonization through a high and rising CO2 price. In this third installment, we will take a look at the primary reason why we need CCS in the first place: coal.

Coal is quite possibly the most hated commodity on earth. It is dirty in almost every sense of the word, can have severe local impacts if handled irresponsibly and is also the most CO2 intensive fuel we have. For these reasons, people have been out in force against coal for decades, especially as climate change became more mainstream and studies such as the Epstein et al. work assigned enormous externalized costs to coal energy.

However, for the most hated commodity on earth, coal is doing pretty well for itself. As shown below, global coal consumption has comfortably outpaced growth in all other energy forms since the turn of the century.

Change in energy consumption since turn of the century

Despite the continued frustration of almost everyone who is even slightly informed about energy and climate issues, this trend is set to continue. Mainstream energy projections indicate that global coal growth should slow down somewhat over coming decades with more growth coming from gas and renewables, but this is by no means certain. This article will delve a little more deeply into the fundamental drivers of coal consumption.

Energy and economic growth

In order to grow the global economy, we require high quality energy resources. Such resources allow us to use very little of our time and effort in the procurement and distribution of new energy and all the rest in manufacturing and distributing all the stuff that we really want. In fact, from a macro-economic perspective, the great job creation potential of renewable energy often touted by advocates is a bad thing.

As most readers will be aware of, the Energy Return on Investment (EROI) of all major fuels has been in decline for decades now. This simply implies that we are forced to spend increasing amounts of our time and effort on the procurement of new energy, leaving less for all the other stuff. As revealed in the data of the foremost authority on the topic of EROI, Charles Hall, coal is the only possible exception to this steady decline and has maintained its high EROI steady from 1950 to 2000 according to the source of the figure below.

Charles Hall balloon graph

This situation has naturally lead to the global coal breakout over the last decade. As the EROI of oil and gas continued to decline, the world increasingly turned to coal in order to maintain economic growth. In practice, this implied a stagnation in oil-powered developed nations while rapid growth took place in coal-powered developing nations. Take a look at the figure below while keeping in mind that the coal breakout began roughly around the turn of the century.

Developed and developing world GDP growth

Aside from the potential of the heavily debated shale gas revolution in the US, the world has not solved the issue of declining oil & gas EROI, implying that there is no reason for these trends to change. If the world economy is to continue to grow, it needs a continued large energy surplus and, if oil & gas EROI continues downwards, this surplus will have to continue to come from coal. Nuclear power has potential to aid significantly here, but continues to suffer from very strong societal resistance. Wind and solar power, on the other had, is nowhere near the EROI required to sustain (let alone grow) the global economy when accounting for the intermittency (e.g. Weisbach or Palmer).

Thus, unless we see a rapid political turnaround on nuclear (appears unlikely) or a global shale gas revolution (perhaps somewhat more likely), a continued shift to coal will be necessary in order to maintain global economic growth. And, as discussed next, growth will be maintained at almost any cost.

Growth vs. environment

It is sometimes hard for developed world citizens to understand the priorities of the developing world, but it is important to understand (and accept) that the 6 billion people living in developing countries will pursue economic development at almost any cost over the coming years and decades. There are a number of good reasons for this, the most important of which will be discussed here.

Firstly, globalization has made catch-up growth much easier for developing nations than it used to be. Skills, knowledge and investment capital can be imported through various channels and the resulting copied technology combined with cheap local labour and cheap (often very dirty) fossil energy ensures high global demand for the resulting very cheap products and services. This process creates enormous opportunity for hundreds of millions of poor people to better their lives - an opportunity which is normally grabbed with both hands.

Secondly, developing world citizens value negative fossil fuel externalities much lower than developed world citizens. For example, the Epstein et al. study valued the  24475 excess deaths in 2005 at $187 billion. If this valuation was used for the 444000 Americans killed by smoking every year, it can be calculated that cigarettes cost the US almost a quarter of its entire GDP. In contrast, an Indian study valued all non-CO2 externalities of coal at less than 10% the value calculated by Epstein et al. The reason behind this stark difference in priorities becomes blindingly obvious to anyone who has ever seen one of the giant developing world slums first-hand.

Thirdly, developing world citizens still have an enormous amount of happy life years to gain from fossil-fueled industrialization. Happy life years (life expectancy times a subjective wellbeing score) tend to increase logarithmically with environmental footprint. This implies that most developing world citizens can still get large gains in happy life years through fairly moderate increases in environmental footprint (fossil fueled industrialization). The situation is totally opposite for developed world citizens, however, as illustrated by the figure below compiled from the Happy Planet Index.

happy-planet-index

Finally, a strong case can be made for the notion that getting rich as quickly as possible is the developing world's best defence agaist the detrimental effects of climate change. It is well established that the developing world is much more vulnerable to the effects of climate change than the developed world simply because of a much lower level of development. Sustained (fossil-fuelled) economic development will therefore be detrimental to the world as a whole, but can certainly be of net-benefit to the countries that manage to grow the fastest. 

Coal resources

None of this would matter, however, if we did not have such a tremendous amount of coal at our disposal. One sometimes hears the definition of sustainable energy consumption as a finite resource being sustainable if it will last at least 1000 years at current consumption rates. According to a recent IEA report, global hard coal resources are 17.2 trillion tonnes which equates to 2200 years at current consumption rates. Yes, proven reserves amount to "only" 133 years at current consumption rates, but resources are continuously being converted to reserves as the market demands it.

Referring to coal as a sustainable resource really sounds heretical, but if these enormous resources are combined with the total CO2 storage capacity which could be somewhere in the order of 10 trillion tonnes (close to a 1000 years if 80% of current coal-related emissions are stored), this sounds slightly less ludicrous. The point I'm trying to make here, however, is not that coal is a sustainable resource, but that it can definitely serve society's energy needs for many decades into the future.

More importantly, coal has the potential to give society some crucial freedom to balance between the seemingly conflicting needs of rapid economic development of the developing world and rapid decarbonization of the global energy sector. As outlined in the first two parts of this series, CCS can potentially achieve retroactive CO2 abatement at a very rapid rate when the time comes that climate change starts to have a clear and directly attributable negative effect on the life of the average member of the democratic electorate. And yes, if climate science is correct, this point will probably arrive within the next decade or two as the developing world continues its fossil-fueled expansion.

Conclusion

Whether we like it or not, coal is here to stay. Until we find another broadly accepted energy source that delivers the enormous energy surplus necessary to drive global economic growth in such a highly reliable manner, coal consumption must continue expanding. Currently, it appears as if that day is still a long way off, implying that coal might soon reclaim its former title as the leading global energy source. Just imagine the headlines when the most dirty and primitive of fossil fuels becomes number one in our modern world of microchips and solar panels...

If the world can find a broadly accepted clean energy solution capable of driving rapid industrialization and urbanization in the developing world, it would be fantastic, but until that happens, CCS will have to remain a high priority.  Otherwise, we had all better pray that climate science is way off the mark (on the pessimistic side).