By Kelly Mitchell
It’s been a big month for news on the state of the U.S. coal industry—from announcements that China is significantly curbing coal use, to the long-awaited unveiling of the Obama Administration’s carbon standards for new coal-fired power plants.
Despite Peabody’s claims that “We have trillions of tons of coal resources in the world. You can expect the world to use them all,” a very different reality is shaping up. ”King Coal” is being reduced to pawn. The open secret is that it has very little to do with new U.S. Environmental Protection Agency (EPA) rules.
The beginning of the end.
It’s old news that the coal industry is in trouble. Peabody (BTU) and Arch (ACI), the largest U.S. coal companies, have lost more than 75 percent of their peak value since 2011, as coal struggles to compete with renewable energy and gas. One-hundred-seventy new coal plants representing $450 billion in capital investment have been canceled. Few utility companies are taking a gamble on new coal generation; those who have are in financial trouble. Meanwhile, community activism has worked in tandem with shifting economics to secure the retirement of dozens of existing coal plants. Current and pending federal health and climate rules will only accelerate this trend.
While all eyes were on EPA, a surprising indicator of the severity of coal’s decline emerged from the relatively obscure federal coal leasing program. The Department of Interior (DOI), through its Bureau of Land Management (BLM), owns and manages one of the world’s largest coal reserves in the world in the Powder River Basin of Wyoming and Montana. Since the start of the Obama Administration, DOI has leased over 2 billion tons of federal coal to companies like Peabody, at rates of around $1 per ton. Literally cheaper than dirt.
Not surprisingly, this leasing program has come under intense public scrutiny from environmentalists, taxpayer advocates, U.S. Senators and federal investigators over claims that it is shortchanging taxpayers, ignoring the industry’s desire to export coal overseas, and fueling climate change.
However, recently, BLM is facing a new set of challenges. For the second time in less than a month, federal coal auctions in the Powder River Basin have resulted in no coal sales.
On Aug. 21, Cloud Peak Energy declined to bid for the Maysdorf II coal tract, citing “current market conditions and the uncertainty caused by the current political and regulatory environment towards coal and coal-powered generation.” This marked the first time in Wyoming’s history that a coal lease sale failed to attract a single bidder.
A few weeks later, on Sept. 18, Kiewit mining company placed a 21 cent per ton bid for the Hay Creek II tract—the lowest Wyoming bid in 15 years. BLM rejected the offer. As Ben Jervey at DeSmogBlog put it, “Hey, at least we can’t accuse the BLM of literally giving away coal on public lands.”
Twice, the federal government offered up huge tracts of coal, for what would have been giveaway prices, and the coal industry effectively passed. Coal companies have the whole leasing system rigged in their favor, and it’s still not worth the risk!
But maybe it’s not surprising. The U.S. is moving away from coal in favor of cleaner energy, and the coal mining industry is wary of dumping big money into mines oriented to meet domestic demand. For all the hand-wringing and outrage over EPAs carbon standards for new coal plants, the truth is coal has been behind the curve for some time.
Which brings us to China.
With declining demand at home, the U.S. coal industry has increasingly looked to the export market as its saving grace. Cloud Peak, the company that declined the Maysdorf II tract designed to feed its domestic coal plant serving Cordero Rojo mine, is working to rapidly expand what it calls an “export-focused mine complex” in Montana.
Unfortunately—for the poor coal companies who have poisoned our air and water for generations—it appears that opportunity has passed.
Global coal prices surged in mid 2009, fueled by a large increase in demand for imported coal from China. China’s appetite made coal sales to Asia a lucrative business proposal for companies who could get their rocks on ships, and coal export terminal proposals popped up soon after in Oregon and Washington States. The domestic market was slowing—but, hey, coal companies had a fire exit.
However, it now appears that market has peaked and is on the decline. China’s coal appetite is cooling, and with it the entire Pacific seaborne market. Analysts at Bernstein were blunter:
Globally, Chinese demand growth has been the primary driver or the backstop behind every new investment in coal mining over the last decade. The "global coal market" ended with the collapse in price in 2012.
Ross Macfarlane at Climate Solutions recently posted a brilliant digest of new analysis from Wall St. firms such as Goldman Sachs, Bernstein and Citibank—all pointing to a bleak future for the global coal trade and the U.S. coal industry in particular.
U.S. coal companies are already feeling the impacts of this downturn. Sightline Institute’s recent analysis of Cloud Peak’s second quarter earnings statement revealed that the company made significantly more money betting against coal than it did on actual foreign sales.
And this month, the Chinese government announced a far-reaching air pollution response plan that will lock in additional, long-term declines in Chinese coal consumption—especially in major importing regions.
The plan sets ambitious timelines for reducing fine particulate pollution in Beijing and other key heavily-populated cities. It calls for three main economic areas—Beijing-Tianjin-Hebei, Yangtze River Delta and Pearl River Delta—to peak and decline their coal consumption by 2017. It also bans the approval of new conventional coal-fired power plants in these key regions.
The ban on new coal-fired power plants covers China’s most important coal importing regions; the Pearl River Delta and Yangtze River Delta, responsible for more than 50 percent of thermal coal imports. It’s hard to read the crystal ball on the long term risks and opportunities in the Pacific coal market, but if U.S. coal companies are hoping for a dramatic surge in new coal demand in Eastern China to restore profitability, they might not want to hold their breath.
The New York Times, Associated Press and Wall Street Journal have reported on these developments with little optimism for the U.S. coal industry, evidenced by headlines like “Coal’s future darkens around the world.”
Cracks in the carbon bubble.
This mix of declining domestic demand and softening coal markets makes the U.S. coal industry the potential bellwether of the coming cracks in the carbon bubble. Peabody’s billions of tons of reserves were scooped up in the promise of growing markets and bigger margins. Now, one word describes the outlook for coal’s economic relevance: smaller.
Analyses from Carbon Tracker have warned that money invested in expanding fossil fuel reserves represent wasted capital as it becomes increasingly clear that most of the world’s fossil fuels are unburnable. Warnings that most fossil fuel reserves cannot be burned have also come from global institutions like the International Energy Agency and, most recently, the Intergovernmental Panel on Climate Change report.
Coal reserves are at particular risk of becoming stranded assets for several reasons. As the most polluting fossil fuel, any serious action to reduce carbon pollution must dramatically reduce coal consumption—EPA's new and pending carbon rules are a clear sign of what’s to come. Further, coal-fired power plants are major sources of deadly air pollution, so efforts to improve air quality are pushing the world’s top coal consumers—China and the U.S.—to rein in coal now.
The U.S. coal industry owns billions of tons of reserves in a developed country that’s steadily retiring coal fired power plants, and their only escape route is a global market that has likely already peaked. Peabody and Arch, the two leading U.S. coal companies, are badly positioned to deal with today’s global markets. Their value is depressed, debt levels are too high and their future sales potential is impaired.
Do not be surprised if the value of these companies, already at record lows, decreases further.
Reporting on major shifts in the domestic and global coal market, the Wall Street Journal recently concluded, “Investors in coal might well feel paranoid. But remember: it isn’t paranoia if the world really is out to get you.”
Down, but not out.
With so much bad news for coal, it might be time to revisit the classic activist narrative of David vs. the Coal Industry Goliath. It may be some time before we see the “end of coal” in a literal sense, but we are approaching a future with fewer, smaller, more volatile coal companies competing for a dwindling share of the electricity market. Coal CEOs should fear irrelevance before death.
But there’s another factor at play—the coal industry has historically punched above its weight, politically. You don’t have to search far to find examples of politicians and regulators green-lighting environmental and financial boondoggles peddled by the U.S. coal industry.
Deutsche Bank may call coal a “dead man walking.” But the industry is still very alive in certain corners of American politics.
DOI continues to hold lease sales, with billions of tons of coal in the leasing pipeline. Obama’s Army Corps of Engineers refuses to look at the full impacts of coal export proposals. Local governments are considering the risks of increased coal dust and diesel pollution because of the promise of economic development, even though that may never come. Members of Congress are introducing countless bills to roll back environmental protections.
Fortunately, these last ditch efforts to secure political support for risky coal projects are being met by a powerful and growing grassroots movement.
China’s ambitious coal reduction plan is a response to growing public demands for clean air. Research shows that every year thousands of Chinese citizens are dying from coal pollution. Those revelations have sowed anger in a Chinese culture that traditionally holds great value on long life, and the ability to enjoy active old age with grandchildren and friends.
Here in the U.S., the heads of more than 20 organizations representing millions of people have called on Interior Secretary Jewell to establish a moratorium on new federal coal leasing. The two failed auctions in the midst of so much controversy should be a wake-up call and opportunity for Jewell to put the brakes on this carbon giveaway. The market is declaring a moratorium; the Secretary must use her policy levers to reshape the program.
And thousands of people are turning out to public hearings, rallies and workshops in opposition to new coal export terminals on the West Coast, joining their voices with small businesses, ranchers, religious leaders and elected officials at all levels of government.
People on both sides of the Pacific are drawing a line against coal, and they will win. Because, in the words of Seattle Times columnist Lance Dickie, “The only return on investment with coal, coal trains and coal terminals is carbon dioxide and ocean acidification.”
The question remains, of course, if we can end our use of coal in time to avoid catastrophic climate change… or if we can draw strength from the victories of the last several years to defeat the Goliaths in the oil and gas industry. But, with a long and difficult fight ahead, we owe it to ourselves to pause and reflect on the successes at hand.
Cheers, to the beginning of the end of coal.
Visit EcoWatch’s COAL page for more related news on this topic.
Thousands of Superfund sites exist around the U.S., with toxic substances left open, mismanaged and dumped. Despite the high levels of toxicity at these sites, nearly 21 million people live within a mile of one of them, according to the U.S. Environmental Protection Agency (EPA).
Currently, more than 1,300 Superfund sites pose a serious health risk to nearby communities. Based on a new study, residents living close to these sites could also have a shorter life expectancy.
Published in Nature Communications, the study, led by Hanadi S. Rifai, a professor of civil and environmental engineering at the University of Houston, and a team of researchers, found that living in nearby zip codes to Superfund sites resulted in a decreased life expectancy of more than two months, the University of Houston reported.
"We have ample evidence that contaminant releases from anthropogenic sources (e.g., petrochemicals or hazardous waste sites) could increase the mortality rate in fence-line communities," Rifai told the University of Houston. "Results showed a significant difference in life expectancy among census tracts with at least one Superfund site and their neighboring tracts with no sites."
The study pulled data from 65,000 census tracts – defined geographical regions – within the contiguous U.S., The Guardian reported. With this data, researchers found that for communities that are socioeconomically challenged, this life expectancy could decrease by up to a year.
"It was a bit surprising and concerning," Rifai told The Guardian. "We weren't sure [when we started] if the fact that you are socioeconomically challenged would make [the Superfund's effects] worse."
The research team, for example, found that the presence of a Superfund site in a census tract with a median income of less than $52,580 could reduce life expectancy by seven months, the University of Houston reported.
Many of these toxic sites were once used as manufacturing sites during the Second World War. Common toxic substances that are released from the sites into the air and surface water include lead, trichlorethylene, chromium, benzene and arsenic – all of which can lead to health impacts, such as neurological damage among children, The Union of Concerned Scientists wrote in a blog.
"The EPA has claimed substantial recent progress in Superfund site cleanups, but, contrary to EPA leadership's grandiose declarations, the backlog of unfunded Superfund cleanups is the largest it has been in the last 15 years," the Union wrote.
Delayed cleanup could become increasingly dangerous as climate change welcomes more natural hazards, like wildfires and flooding. According to a Government Accountability Office report, for example, climate change could threaten at least 60 percent of Superfund sites in the U.S., AP News reported.
During the summer of 2018, a major wildfire took over the Iron Mountain Superfund site near Redding, CA, ruining wastewater treatment infrastructure that is responsible for capturing 168 million gallons of acid mine drainage every month, NBC News reported.
"There was this feeling of 'My God. We ought to have better tracking of wildfires at Superfund locations,'" Stephen Hoffman, a former senior environmental scientist at the EPA, told NBC News. "Before that, there wasn't a lot of thought about climate change and fire. That has changed."
In the study, researchers also looked at the impacts of floodings on Superfund sites, which could send toxins flowing into communities and waterways.
"When you add in flooding, there will be ancillary or secondary impacts that can potentially be exacerbated by a changing future climate," Rifai told the University of Houston. "The long-term effect of the flooding and repetitive exposure has an effect that can transcend generations."
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A weather research station on a bluff overlooking the sea is closing down because of the climate crisis.
The National Weather Service (NWS) station in Chatham, Massachusetts was evacuated March 31 over concerns the entire operation would topple into the ocean.
"We had to say goodbye to the site because of where we are located at the Monomoy Wildlife Refuge, we're adjacent to a bluff that overlooks the ocean," Boston NWS meteorologist Andy Nash told WHDH at the time. "We had to close and cease operations there because that bluff has significantly eroded."
Chatham is located on the elbow of Cape Cod, a land mass extending out into the Atlantic Ocean that has been reshaped and eroded by waves and tides over tens of thousands of years, The Guardian explained. However, sea level rise and extreme weather caused by the climate crisis have sped that change along.
"It's an extremely dynamic environment, which is obviously a problem if you are building permanent infrastructure here," Andrew Ashton, an associate scientist at Cape-Cod based Woods Hole Oceanographic Institution, told The Guardian. "We are putting our foot on the accelerator to make the environment even more dynamic."
This was the case with the Chatham weather station. It used to be protected from the drop into the ocean by about 100 feet of land. However, storm action in 2020 alone washed away as much as six feet of land a day.
"We'd know[n] for a long time there was erosion but the pace of it caught everyone by surprise," Nash told The Guardian. "We felt we had maybe another 10 years but then we started losing a foot of a bluff a week and realized we didn't have years, we had just a few months. We were a couple of storms from a very big problem."
The Chatham station was part of a network of 92 NWS stations that monitor temperature, pressure, humidity, wind speed and direction and other data in the upper atmosphere, The Cape Cod Chronicle explained. The stations send up radiosondes attached to weather balloons twice a day to help with weather research and prediction. The Chatham station, which had been observing this ritual for the past half a century, sent up its last balloon the morning of March 31.
"We're going to miss the observations," Nash told The Cape Cod Chronicle. "It gives us a snapshot, a profile of the atmosphere when the balloons go up."
The station was officially decommissioned April 1, and the two buildings on the site will be demolished sometime this month. The NWS is looking for a new location in southeastern New England. In the meantime, forecasters will rely on data from stations in New York and Maine.
Nash said the leavetaking was bittersweet, but inevitable.
"[M]other nature is evicting us," he told The Cape Cod Chronicle.
By Douglas Broom
- If online deliveries continue with fossil-fuel trucks, emissions will increase by a third.
- So cities in the Netherlands will allow only emission-free delivery vehicles after 2025.
- The government is giving delivery firms cash help to buy or lease electric vehicles.
- The bans will save 1 megaton of CO2 every year by 2030.
Cities in the Netherlands want to make their air cleaner by banning fossil fuel delivery vehicles from urban areas from 2025.
"Now that we are spending more time at home, we are noticing the large number of delivery vans and lorries driving through cities," said Netherlands environment minister Stientje van Veldhoven, announcing plans to ban all but zero-emission deliveries in 14 cities.
"The agreements we are setting down will ensure that it will be a matter of course that within a few years, supermarket shelves will be stocked, waste will be collected, and packages will arrive on time, yet without any exhaust fumes and CO2 emissions," she added.
She expects 30 cities to announce zero emission urban logistics by this summer. City councils must give four years' notice before imposing bans as part of government plans for emission-free road traffic by 2050. The city bans aim to save 1 megaton of CO2 each year by 2030.
Help to Change
To encourage transport organizations to go carbon-free, the government is offering grants of more than US$5,900 to help businesses buy or lease electric vehicles. There will be additional measures to help small businesses make the change.
The Netherlands claims it is the first country in the world to give its cities the freedom to implement zero-emission zones. Amsterdam, Rotterdam and Utrecht already have "milieuzones" where some types of vehicles are banned.
Tilburg, one of the first wave of cities imposing the Dutch ban, will not allow fossil-fuelled vehicles on streets within its outer ring road and plans to roll out a network of city-wide electric vehicle charging stations before the ban comes into effect in 2025.
"Such initiatives are imperative to improve air quality. The transport of the future must be emission-free, sustainable, and clean," said Tilburg city alderman Oscar Dusschooten.
Europe Takes Action
Research by Renault shows that many other European cities are heading in the same direction as the Netherlands, starting with Low Emission Zones of which Germany's "Umweltzone" were pioneers. More than 100 communes in Italy have introduced "Zonas a traffico limitato."
Madrid's "zona de baja emisión" bans diesel vehicles built before 2006 and petrol vehicles from before 2000 from central areas of the city. Barcelona has similar restrictions and the law will require all towns of more than 50,000 inhabitants to follow suit.
Perhaps the most stringent restrictions apply in London's Ultra Low Emission Zone (ULEZ), which charges trucks and large vehicles up to US$137 a day to enter the central area if they do not comply with Euro 6 emissions standards. From October, the ULEZ is being expanded.
Cities are responsible for around 75% of CO2 emissions from global final energy use, according to the green thinktank REN21 - and much of these come from transport. Globally, transport accounts for 24% of world CO2 emissions.
The Rise of Online Shopping
Part of the reason for traffic in urban areas is the increase in delivery vehicles, as online shopping continues to grow. Retailer ecommerce sales are expected to pass $5billion in 2022, according to eMarketer.
The World Economic Forum's report The Future of the Last-Mile Ecosystem, published in January 2020, estimates that e-commerce will increase the number of delivery vehicles on the roads of the world's 100 largest cities by 36% by 2030.
If all those vehicles burn fossil fuels, the report says emissions will increase by 32%. But switching to all-electric delivery vehicles would cut emissions by 30% from current levels as well as reducing costs by 25%, the report says.
Other solutions explored in the report include introducing goods trams to handle deliveries alongside their passenger-carrying counterparts and increased use of parcel lockers to reduce the number of doorstep deliveries.
Reposted with permission from the World Economic Forum.
The bill, SB467, would have prohibited fracking and other controversial forms of oil extraction. It would also have banned oil and gas production within 2,500 feet of a home, school, hospital or other residential facility. The bill originally set the fracking ban for 2027, but amended it to 2035, The AP reported.
"Obviously I'm very disappointed," State Sen. Scott Wiener (D-San Francisco), one of the bill's two introducers, told the Los Angeles Times. "California really has not done what it needs to do in terms of addressing the oil problem. We have communities that are suffering right now, and the Legislature has repeatedly failed to act."
The bill was introduced after California Gov. Gavin Newsom said he would sign a fracking ban if it passed the legislature, though his administration has continued to issue permits in the meantime, Forbes reported. Newsom has also spoken in favor of a buffer zone between oil and gas extraction and places where people live and learn, according to the Los Angeles Times. The latter is a major environmental justice issue, as fossil fuel production is more likely to be located near Black and Latinx communities.
Urban lawmakers who want California to lead on the climate crisis supported the bill, while inland lawmakers in oil-rich areas concerned about jobs opposed it. The oil and gas industry and trade unions also opposed the bill.
This opposition meant the bill failed to get the five votes it needed to move beyond the Senate's Natural Resources and Water Committee. Only four senators approved it, while Democrat Sen. Susan Eggman of Stockton joined two Republicans to oppose it, and two other Democrats abstained.
Eggman argued that the bill would have forced California to rely on oil extracted in other states.
"We're still going to use it, but we're going to use it from places that produce it less safely," Eggman told The AP. She also said that she supported the transition away from fossil fuels, but thought the bill jumped the gun. "I don't think we're quite there yet, and this bill assumes that we are," she added.
Historically, California has been a major U.S. oil producer. Its output peaked in 1986 at 1.1 million barrels a day, just below Texas and Alaska, according to Forbes. However, production has declined since then making it the seventh-most oil-producing state.
Still, California's fossil fuel industry is at odds with state attempts to position itself as a climate leader.
"There is a large stain on California's climate record, and that is oil," Wiener said Tuesday, according to The AP.
Wiener and Democrat co-introducer Sen. Monique Limón from Santa Barbara vowed to keep fighting.
"While we saw this effort defeated today, this issue isn't going away," they wrote in a joint statement. "We'll continue to fight for aggressive climate action, against harmful drilling, and for the health of our communities."
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By Brett Wilkins
As world leaders prepare for this November's United Nations Climate Conference in Scotland, a new report from the Cambridge Sustainability Commission reveals that the world's wealthiest 5% were responsible for well over a third of all global emissions growth between 1990 and 2015.
The report, Changing Our Ways: Behavior Change and the Climate Crisis, found that nearly half the growth in absolute global emissions was caused by the world's richest 10%, with the most affluent 5% alone contributing 37%.
"In the year when the UK hosts COP26, and while the government continues to reward some of Britain's biggest polluters through tax credits, the commission report shows why this is precisely the wrong way to meet the UK's climate targets," the report's introduction states.
The authors of the report urge United Kingdom policymakers to focus on this so-called "polluter elite" in an effort to persuade wealthy people to adopt more sustainable behavior, while providing "affordable, available low-carbon alternatives to poorer households."
The report found that the "polluter elite" must make "dramatic" lifestyle changes in order to meet the UK's goal — based on the Paris climate agreement's preferential objective — of limiting global heating to 1.5°C, compared with pre-industrial levels.
In addition to highlighting previous recommendations — including reducing meat consumption, reducing food waste, and switching to electric vehicles and solar power — the report recommends that policymakers take the following steps:
- Implement frequent flyer levies;
- Enact bans on selling and promoting SUVs and other high polluting vehicles;
- Reverse the UK's recent move to cut green grants for homes and electric cars; and
- Build just transitions by supporting electric public transport and community energy schemes.
"We have got to cut over-consumption and the best place to start is over-consumption among the polluting elites who contribute by far more than their share of carbon emissions," Peter Newell, a Sussex University professor and lead author of the report, told the BBC.
"These are people who fly most, drive the biggest cars most, and live in the biggest homes which they can easily afford to heat, so they tend not to worry if they're well insulated or not," said Newell. "They're also the sort of people who could really afford good insulation and solar panels if they wanted to."
Newell said that wealthy people "simply must fly less and drive less. Even if they own an electric SUV, that's still a drain on the energy system and all the emissions created making the vehicle in the first place."
"Rich people who fly a lot may think they can offset their emissions by tree-planting schemes or projects to capture carbon from the air," Newell added. "But these schemes are highly contentious and they're not proven over time."
The report concludes that "we are all on a journey and the final destination is as yet unclear. There are many contradictory road maps about where we might want to get to and how, based on different theories of value and premised on diverse values."
"Promisingly, we have brought about positive change before, and there are at least some positive signs that there is an appetite to do what is necessary to live differently but well on the planet we call home," it states.
The new report follows a September 2020 Oxfam International study that revealed the wealthiest 1% of the world's population is responsible for emitting more than twice as much carbon dioxide as the poorest 50% of humanity combined.
Reposted with permission from Common Dreams.
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