Ahhh Shucks. I need to buy another Prius.
Hey dummy! Notice anything "funny" about the chart below. Look who buys just about all the world's supply of coal? China and India. The same guys that dominate all the polluting on the planet. So why Joe and woke shame you into buying an EV car, the elephants in the room are marching to their own drummer.
BTW: Passenger vehicles make up about 9% of US pollution.
Coal Makes a Comeback as the World Thirsts for Energy
Tight supplies following Russia’s war in Ukraine lead countries back to the dirtiest fossil fuel, despite pledges to tackle climate change
By Jenny Strasburg and Phred Dvorak, WSJ
July 4, 2022 8:03 am ET
An energy-starved world is turning to coal as natural-gas and oil shortages exacerbated by Russia’s war against Ukraine lead countries back to the dirtiest fossil fuel.
From the U.S. to Europe to China, many of the world’s largest economies are increasing short-term coal purchases to ensure sufficient supplies of electricity, despite prior pledges by many countries to reduce their coal consumption to combat climate change.
The global competition for coal—also now in short supply after years of declining investment in new mines and resources—has driven benchmark prices to new records this year. Spot coal prices at Australia’s Newcastle port, a key supplier to Asia, topped $400 a ton for the first time last month.
The push is being led by Europe, which is boosting coal purchases to ensure it can keep power flowing to homes and factories after Russia cut gas supplies to the continent. Germany, which has promised to eliminate coal as a power source by 2030, is among the nations now importing more. Economy Minister Robert Habeck called the increased reliance on coal bitter but necessary.
“Right now the sentiment is that more coal is better than more Russia,” said Alex Msimang, a London-based partner at law firm Vinson & Elkins LLP specializing in the energy sector.
Spot coal prices at Australia’s Newcastle port topped $400 a ton last month.
PHOTO: SAEED KHAN/AGENCE FRANCE-PRESSE/GETTY IMAGES
Parts of the U.S. are boosting use of coal power, as high demand for electricity amid unusually hot temperatures pushes regional power grids to the brink of blackouts this summer.
China, the world’s biggest coal consumer, is expanding production of the fuel and its use in power generation, spooked by shortages last year that caused electricity cuts and outages throughout the country, energy experts say.
India is also leaning hard on coal as energy demand increases. The nation’s coal-power generation hit a record in April, said Rahul Tongia, a senior fellow at New Delhi-based think tank the Centre for Social and Economic Progress.
Domestic coal production in China and India helped drive a 10% increase in global investment in 2021, the International Energy Agency reported last month. The IEA projects another 10% increase this year as China and India try to stave off shortages.
Coal miners such as Anglo-Swiss giant Glencore GLNCY -4.63%▼ PLC are cashing in. Glencore, one of the last major miners still big in coal, said last month that it now expected $3.2 billion in trading profit in the first half of this year, compared with $3.7 billion for all of 2021.
“We expect elevated coal prices to make Glencore one of the leading shareholder-return companies in the market,” Deutsche Bank AG analysts wrote.
Trucks carrying coal in India’s Jharkhand state. The nation’s coal-power generation hit a record in April.
PHOTO: GAUTAM DEY/AGENCE FRANCE-PRESSE/GETTY IMAGES
Coal use fell in many major Western countries over the past decade, displaced by cleaner forms of energy that became more cost-competitive. Natural gas became more plentiful thanks to the American fracking boom and Russian exports to Europe. Renewable energy sources such as wind and solar power also gained market share, buoyed by falling prices and government subsidies and mandates.
Still, global coal demand held strong, fueled by fast-growing energy needs in much of the rest of the world—and is on track to hit record highs this year, according to forecasts by the IEA.
The resurgence of coal, which emits around double the carbon dioxide as burning natural gas, further threatens to set back international efforts to keep global temperatures under 2 degrees Celsius from preindustrial levels, and preferably close to 1.5 degrees, by the end of the century.
That is the goal that more than 190 nations agreed to pursue under the 2015 Paris Agreement to avoid the most dangerous potential consequences of global warming. The United Nations Intergovernmental Panel on Climate Change says that emissions, which continue to rise, would need to be drastically reduced by the end of the decade to meet the goal.
Coal is dropped from a conveyor belt at the Duisburg-Walsum plant in Germany.
PHOTO: BERND THISSEN/PICTURE ALLIANCE/GETTY IMAGES
Climate activists and forecasters say they are concerned about a rise in coal use, but see it as a short-term phenomenon in the West and are more worried that the Ukraine war and other geopolitical events are spurring new natural-gas investments that could operate for decades.
“It can be justified but not for long,” said Bill Hare, chief executive of the Berlin-based group Climate Analytics, of the coal surge.
While many countries are racing to lock up coal supplies in the short run, they aren’t entering into new extended contracts with coal miners, lawyers and industry consultants say. That contrasts with the natural-gas market, where some countries have begun signing long-term deals with shippers in the U.S. and Qatar for liquefied natural gas, or LNG.
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Still, efforts to wean Western nations off Russian energy figure to strain global supplies for the foreseeable future. In April, the European Union agreed to ban imports of Russian coal. Before the war, Russia was Europe’s largest supplier of the thermal coal used in power generation, and the ban affected around 70% of the supply that European power stations require, according to Rystad Energy.
In addition to Germany, Italy, France, the U.K., the Netherlands and Austria have now said they are preparing to restart coal-fired power plants, boost their production or keep them running longer than planned. Many countries say they are trying to build up stockpiles of natural gas ahead of winter, when it is in high demand as a heating fuel.
Countries are rejiggering distribution channels to obtain more coal from other big suppliers such as Australia and the U.S., but that takes time and money, said Gerben Hieminga, senior energy-sector economist for Dutch bank ING Groep.
“The whole world is doing this,” Mr. Hieminga said.
The U.S. can only increase so much without pouring significantly more money into coal production, limiting the duration of the current windfall, said Chris Walker, a 14-year veteran of St. Louis-based coal miner Peabody Energy Corp. BTU -1.36%▼ who until last year led the company’s international marketing and trading operation.
“They’re trying to get more tons out today with no long-term impact on capital,” said Mr. Walker, now an industry consultant.
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The kind of coal production most easily scaled up is lower-quality coal, generally mined close to the surface, that is less efficient and can satisfy only a fraction of Europe’s coal-import needs, said Natalie Biggs, head of thermal-coal market analysis at energy consulting firm Wood Mackenzie. The competition for high-quality coal has so distorted global trade that some Russian coal that normally wouldn’t be economical to ship to India through Baltic Sea ports is now making that trip, she said, though that Russian coal is selling at a relative discount.
China, the world’s biggest coal consumer, is expanding production. Coal is transported by rail in Jiangxi province.
PHOTO: STR/AGENCE FRANCE-PRESSE/GETTY IMAGES
Climate watchdogs worry Asia could stay hooked on coal for longer than previously projected. China, the world’s largest greenhouse-gas emitter, already comprises around half of the world’s coal-power capacity, with plants accounting for nearly a third of global coal consumption, according to energy data trackers.
The country is still building new coal plants at a rapid clip, at risk of oversupply, “because it can’t afford a power shortage,” says Ryna Cui, co-director of the China program at the University of Maryland’s Center for Global Sustainability.
Write to Jenny Strasburg at firstname.lastname@example.org and Phred Dvorak at email@example.com