Keep it in the ground | The Guardian
Futures Forum: Climate change: keep it in the ground
The reality above ground seems to be a scaling back in the use of coal anyway:
China and the US have agreed a historic deal to cut carbon emissions – but both countries are still huge consumers and producers of coal, the most carbon-intensive fossil fuel
How the world uses coal – interactive | Environment | The Guardian
China's coal use falls for first time this century, analysis suggests | Environment | The Guardian
On the other hand, the current Australian government came in after a backlash and campaign against the 'carbon tax':
Futures Forum: "Climate science has been dragged into the American-style culture wars that are turning British intellectual life into a battlefield."
It has been determined to press ahead with coal:
Coal is the future, insists Tony Abbott as UN calls for action on climate change | Environment | The Guardian
Tony Abbott says 'coal is good for humanity' while opening mine | Australia news | The Guardian
However, the largest energy provider in Australia thinks differently:
AGL to shut all coal-fired power stations by 2050 in bid to limit global warming | Business | The Guardian
And following elections in Queensland, the promises of coal seem to be evaporating further:
Queensland's miners will need a miracle to profit from coal now | John Quiggin | Comment is free | The Guardian
Adani coalmine would not deliver jobs and royalties promised, land court hears | Australia news | The Guardian
Here is Al Gore making the point recently:
Cheap coal is a lie – stand up to the industry’s cynical fightbackVested interests are pushing the dirtiest fossil fuel as the energy solution in poor nations. In fact, the argument for investing in solar is overwhelming
Datong No 2 power station in Shanxi Province, China. ‘Air pollution is already reducing life expectancy in northern China by five and a half years.' Photograph: Paul Souders/Corbis
It is becoming increasingly difficult to avoid the reality that the days of coal as a source of energy are numbered. In a world where carbon emissions will increasingly have to be constrained, coal, as the dirtiest of the fossil fuels, is the energy asset most vulnerable to becoming “stranded” – the most vulnerable, in other words, to seeing its market value collapse well ahead of its previously anticipated useful life.
This new economic and political reality is already being shaped by the fast-growing global support for the enforcement of a global “carbon budget”. This idea, first proposed six years ago and formally endorsed by the International Energy Agency in 2011, has been gaining traction because of the ever-stronger scientific consensus that carbon emissions from human activity is the principal driver of destructive climate change. The spewing of 110 million tonnes a day of heat-trapping pollution into the atmosphere – as if the atmosphere were an open sewer – is “increasing the likelihood,” says a warning from the Intergovernmental Panel on Climate Change, “of severe, pervasive and irreversible impacts for people and ecosystems”.
But as the coal industry fights for survival, it has begun to rely on novel and increasingly tenuous arguments. It has embarked on a global campaign to promote coal as the solution to energy poverty. This disingenuous claim is predicated on the notion that coal is the cheapest way of providing electricity to the one-fifth of the world’s population lacking access to an electricity grid.
This exploitation of an urgent humanitarian need to promote more coal-burning in poor countries is extremely misleading. If ever implemented, it would actually significantly worsen the condition of the 1.3 billion people mired in energy poverty.
Most developing countries face serious challenges that are already being exacerbated by climate change-related extreme weather events. They are being battered by stronger storms, more destructive floods, deeper and longer droughts and disruptive switches in the seasonal timing of rain. Think of the devastation wreaked by typhoon Haiyan in the Philippines, or the flooding in Kashmir last summer. Other manifestations of the climate crisis are already retarding economic growth, harming subsistence agriculture and creating social unrest. Food security and water supplies are being compromised, natural resources stressed, and critical infrastructure crippled.
Access to affordable and reliable energy is, of course, essential for sustainable development, poverty reduction, improved access to education and healthcare, and the promotion of public safety and stable government. We should not waver in our commitment to remedy energy poverty, as we strengthen our commitment to the UN’s other sustainable development goals.
But the relative merits of different energy options must be considered over the long term with an emphasis on three factors: financial cost, reliability, and impact on society and the environment. And when viewed through this lens, renewable energy – particularly solar photovoltaic energy, or PV – far outranks coal as the best future energy choice for developing nations.
Energy poverty is concentrated in rural areas, with sub-Saharan Africa and India accounting for 48% and 24%, respectively, of those without access to energy. As a recent report by the Carbon Tracker Initiative highlights, grid costs become prohibitive for coal in rural areas when the investment needed to build a thermal power plant is combined with the cost of building electricity grid extensions and importing fuel. For instance, 93% of those in sub-Saharan Africa who lack access to energy live in countries that do not produce coal. Moreover, even in countries that do have coal reserves – such as India and South Africa – there is no “regulatory compact” of the kind that led the US and most other developed nations to provide electricity at affordable rates to poor and rural areas via the principle of universal service. Instead, the practice in most developing countries has often been to direct new electricity flows preferentially to wealthy high-volume industrial and mining operations, while ignoring and bypassing low-income populations.
By contrast, the astonishingly rapid decline in the cost of electricity from solar, plus the fact that it is quick to install, reliable, and that the technology for storing it is improving, make it an increasingly attractive option for rapid electrification in rural communities.
The cost of the “fuel” needed for PV electricity is zero – which provides economic security for impoverished families who would otherwise be at the mercy of historically volatile fluctuations in fossil-fuel prices. Eliminating the burden of fuel costs also helps, over time, to offset the financial cost required to install renewables.
The true cost of coal cannot be calculated without including the so-called airpocalypse. Air pollution is already reducing life expectancy in northern China by five and a half years, and in India (whose capital, New Delhi, has the worst air pollution of any large city in the world) by 3.2 years. The price of coal would increase dramatically if it reflected the cost borne by society from the pollution that causes hundreds of thousands of premature deaths each year in coal-dependent countries.
Coal mining as a water-intensive practice strains natural resources and destroys crop lands – not least with disease-causing depositions of mercury and cadmium that pass into the food supply. Moreover, the enormous government subsidies much of the industry still receives makes their true cost to society far higher than renewables, whose carbon-free nature obviously makes them preferable with regard to society and the environment.
Although the nominal cost of using coal to power existing grids remains misleadingly low today, it will not remain so for long as the tide turns against it. Investors have been taking careful note of the growing headwinds facing the industry. Regulations to limit carbon emissions continue to mount, even as technological advances make low-carbon energy alternatives ever more cost-competitive. Global investments in new electricity capacity from renewable sources have exceeded those in fossil fuel sources for the past seven years, and the gap is growing.
Moreover, the historic agreement between China and the US – the world’s largest contributors to carbon emissions – to cap and reduce carbon emissions also has significant ramifications for coal. And the World Bank, whose very mandate includes solving energy poverty, has restricted further coal financing to “rare circumstances”. Credible voices from both public and private sector agree: a coal-free energy future is the path forward. And low-income nations deserve access to low-cost capital to rapidly expand their investments in renewable energy.
The technology currently available for installing distributed renewable energy in developing countries cannot yet raise all of the world’s poorest to the levels of per capita energy consumption previously reached in the west, but developed countries are already reducing overall energy demand and increasing energy efficiency, rendering historical patterns of energy usage the wrong benchmark for global standards in any case.
We should aim not only to end energy poverty, but also to achieve greater energy equity. The coal industry’s campaign of self-promotion is cynical and misleading. We should dismiss it and focus instead on meeting global energy needs sustainably. Solving energy poverty is an opportunity to prevent further hardship to societies struggling to meet the challenges they already face, and illuminate the way forward towards a brighter future.
Cheap coal is a lie – stand up to the industry’s cynical fightback | Al Gore | Comment is free | The Guardian
Big Coal is fighting back:
Fossil fuel companies defy warnings on burning reservesPeabody Energy, world’s largest private coal company, casts doubts on climate change science, while Glencore Xstrata says governments will fail to cut CO2
Coal trains in Newport, Virginia, US. Photograph: Cameron Davidson/Corbis
The world’s biggest fossil fuel companies are taking a defiant stance against warnings that reserves of coal, oil and gas are already several times larger than can be burned if the world’s governments are to meet their pledge to tackle climate change.
Peabody Energy, the world’s largest private coal company, said on Monday that global warming was “an environmental crisis predicted by flawed computer models”.
Another coal giant, Glencore Xstrata, said on Tuesday that governments would fail to implement measures to cut carbon emissions. Oil and gas major ExxonMobil said new reserves in the Arctic and Canadian tar sands must be exploited, moves scientists deem incompatible with tackling global warming.
The fossil fuel companies rejection of the consensus of governments and scientists that urgent action to cut emissions is needed comes as the G20 group of leading nations launched a joint probe into global financial risks posed by fossil fuel companies investing in expensive projects that could be left worthless by international action on climate change, the so-called “carbon bubble”. The World Bank and Bank of England have already warned of the serious risk climate action poses to trillions of dollars of fossil fuel assets.
“A toxic brew of climate denial and environmental irresponsibility is steering BigCoal and Big Oil towards ever greater fossil fuel extraction, and towards an economic precipice,” said Doug Parr, policy director at Greenpeace UK. “The problem is their headlong rush to disaster could drag many ordinary people’s pensions and investments over the edge with them. We can only hope that our political leaders can stand up to the lobbying muscle of fossil fuel companies and their short-sighted recklessness.”
Peabody Energy chairman and chief executive Greg Boyce, told a fossil fuel conference in Houston, US, that access to low cost energy was the world’s biggest issue. “The greatest problem we confront is not an environmental crisis predicted by flawed computer models, but a human crisis that is fully within our power to solve.”
He said tens of millions American of parents faced “the terrible choice of putting food on the table, buying medicine or paying for power” and that the problem was even worse for billions of people around the world without proper electricity.
“We should not mandate artificial carbon caps, carbon taxes or renewable mandates that will hurt people and cripple economies for negligible environmental benefit,” said Boyce.
“The sudden interest of climate ‘merchants of doubt’ like Peabody in global poverty strikes me as cynical at best,” said Anthony Hobley, chief executive of the Carbon Tracker Initiative, which has pioneered the analysis of carbon bubble. “They are using the world’s energy poor for a game of smoke and mirrors to sow confusion because the facts say otherwise.” Former US vice-president Al Gore has also accused the coal industry of mounting a cynical and misleading campaign.
A recent study showed 80% of coal reserves must remain in the ground if climate change is to be tackled. The most recent report from the UN’s Intergovernmental Panel on Climate Change, approved by 195 of the world’s nations, concluded that limiting the impacts of global warming “is necessary to achieve sustainable development and equity, including poverty eradication” and that climate change impacts are projected “to prolong existing and create new poverty traps”.
Ivan Glasenberg, the billionaire chief executive of Glencore Xstrata, dismissed concerns that any of its 4.3bn tonnes of coal reserves could be left worthless – or ‘stranded’ – by international action to cut greenhouse gases. He said he did not believe governments would act in the face of growing demand for cheap energy.
Speaking at the launch of the company’s sustainability report, Glasenberg said: “Some of our stakeholders are concerned about the future of our fossil fuel reserves; in particular that they may become stranded assets. We do not believe that the global energy reality will economically support carbon measures that would prevent us from fully utilising our fossil fuel reserves.”
“Glencore CEO’s statement about the future of their coal reserves flies in the face of recent reports from banks such as HSBC and ignores the concerns of the Bank of England and now the G20,” said Hobley. “It reminds me of similar denials by previous industries in decline from steam locomotion, Kodak film, Blockbuster videos and Olivetti typewriters.”
ExxonMobil, Chevron and Shell have also defended their interests by arguing that the only way the world meet it energy demand is by burning fossil fuels. A recentreport from Bloomberg New Energy Finance showed that, as costs plummet, global new low carbon energy capacity has outstripped new coal, gas and oil combined since 2013.
Also speaking at the fossil fuel conference in Houston, ExxonMobil chairman and chief executive Rex Tillerson called for the exploitation of Arctic oil and gas reserves and the building of the Keystone XL pipeline to bring oil from Canada’s tar sands to the US. He said the pipeline had been delayed by “political machinations”.
Hobley said: “Focusing on high cost high carbon capital expenditure in the Arctic and tar sands makes neither financial or climate sense [so] what possible rational can there be for pouring billions of dollars of shareholders money into them?”
Fossil fuel companies defy warnings on burning reserves | Environment | The Guardian
George Monbiot doesn't pull his punches with his latest piece this week:
Big Coal’s big scam: scar the land for profit, then let others pay to clean up
Keep it in the ground: Energy giants claim they dig new opencast mines to fund the closure of old ones. Will anyone call their bluff?
The Ffos-y-fran coalmine. ‘Why are we digging coal anyway, when we cannot afford to burn it?’ Photograph: Matt Cardy/Getty Images
This is an account, scarcely mentioned in the national media, of the massive unfunded liabilities emerging from coalfields throughout Britain that opencast mining companies have been allowed to walk away from. In terms of irresponsibility, it’s comparable to the nuclear industry’s failure to fund its decommissioning costs. And it offers a solid argument, even to those who continue to reject climate science, for keeping fossil fuels in the ground.
As I write, Neath-Port Talbot council in south Wales is considering a new application for an opencast coalmine. The mine is unpopular, but its proponents argue that it’s necessary. Why? Because only by digging a new pit, they say, can the money be made to fill in an old one. How could this be true, when millions of tonnes of coal have been extracted? Where did all the money go?
You think you are inured to the worst of British politics? Read on.
When British Coal was privatised by John Major’s government, in 1994, the company that took over in south Wales, Celtic Energy, was granted a 10-year exemption from paying a restoration bond in return for a slightly higher price for the assets. That higher price disappeared into national accounts, doubtless to fund one of Major’s tax cuts for the rich.
After 10 years, the exemption expired, and Celtic Energy had to start putting up a decommissioning fund. At East Pit, where the application for new mining is now being considered, the bond stands at around £4m, while the restoration is likely to cost about £115m. At another vast pit, Margam, near Bridgend, there is £5.7m in the kitty – against an estimated restoration cost of £56m.
In 2010 Celtic Energy sold the land rights, and the liabilities, at East Pit, Margam and two other mines, to a company in the British Virgin Islands called Oak Regeneration, for £1 a mine. Oak Regeneration then passed the liabilities to Pine Regeneration, Beech Regeneration and Ash Regeneration, none of which appear to have the assets required for restoration. Five senior executives at Celtic Energy walked away with benefits worth more than £10m.
The people involved in this transfer, including two directors of Celtic Energy and the former chief executive of Cardiff city council, were charged with fraud. But last year a judge threw out the case, saying that while some might regard their actions as “dishonest” or “reprehensibile”, they were not illegal. So all that is left, the opencasters argue, is to dig more holes. It’s like the old woman who swallowed a fly.
In a report commissioned by the Welsh government, I was struck by the mention of the Ffos-y-fran opencast coalmine, on which I reported in 2007. This pit was justified as a “restoration scheme” that would remove the old adits, shafts and spoil heaps left behind by deep mining.
Local people were sceptical. One of them told me: “You don’t go down 600ft and blast five days a week to reclaim an area.” But the report finds that the bond laid down by Ffos-y-fran’s operators, £15m, “falls well short of a worst-case restoration cost which could be in excess of £50m”. The “restoration scheme”, this suggests, cannot fund its own restoration.
Villages and towns find themselves perched on the edge of sheer drops, overlooking running black sores sometimes hundreds of metres wide. At Margam, for example, the pit is about a mile and a quarter across and, according to the latest estimate I’ve seen, the water gathering there is 88 metres deep. In East Ayrshire, in Scotland, 22 giant voids have been abandoned by their operators. Restoration work would cost £161m, but just £28m has been set aside. As the local MP explained: “Unstable head walls and extremely deep water bodies with vertical drop-offs make for dangerous playgrounds.”
An independent report found that the collection of restoration bonds by East Ayrshire council officials was “wholly deficient and defective”, while the failure to appoint independent assessors was “completely inexplicable”. While officials took their eye off the ball, councillors took gifts and hospitality from the coal operators, including a trip to watch Celtic play Barcelona in Spain, premier league tickets, lavish meals, food hampers and nights in hotels.
When the two companies running the pits went bust, the council was left with a gigantic hole. Nationwide, the unfunded liabilities counted so far amount to £469m. That’s likely to be just the beginning.
This is a price we pay for limited liability. Why should the people who own and run these companies be allowed to walk away with millions, while shrugging off the costs they leave behind? Limited liability is one of our social silences: a giant gift to corporations that we won’t even discuss.
And why are we digging coal anyway, when we cannot afford to burn it? Climate breakdown is the greatest unfunded liability of all, for which future generations will have to pay. Yet in 2013, the latest year figures are available for, the amount of coal for which companies in Britain have permission to dig rose from 12m tonnes to 24m. Eight new opencast pits were approved in that year, and just three rejected. In which parallel universe is this compatible with the commitment to limit climate change?
Last week, lost in the election turmoil, the Welsh Senedd did something remarkable. It voted, by 30 votes to zero, for a moratorium on opencast coalmining. With the Welsh ban on fracking, this could have meant that Wales was the first nation on earth to keep its fossil fuels in the ground. But the Welsh government refused to accept the decision, using the restoration argument. Past crimes are used to justify new ones.
Fire and forget: that’s the psychopathic business model we confront, and the forgetting is assisted by the press and political leaders. To them, the victims are non-people, the ruined landscapes non-places. All that counts is the money.
• Twitter: @georgemonbiot. A fully referenced version of this article can be found at Monbiot.com
Big Coal’s big scam: scar the land for profit, then let others pay to clean up | George Monbiot | Comment is free | The Guardian
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