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.
Fifteen states are in for an unusually noisy spring.
- Millions of Cicadas Set to Emerge After 17 Years Underground ... ›
- Cicadas Show Up 4 Years Early - EcoWatch ›
EcoWatch Daily Newsletter
Deep in the woods, a hairy, ape-like man is said to be living a quiet and secluded life. While some deny the creature's existence, others spend their lives trying to prove it.
- Why Hunting Isn't Conservation, and Why It Matters - Rewilding ›
- Decline In Hunters Threatens How U.S. Pays For Conservation : NPR ›
- Is Hunting Conservation? Let's examine it closely ›
- Oklahoma Department of Wildlife Conservation | Oklahoma ... ›
- Oklahoma Bill Calls for Bigfoot Hunting Season | Is Bigfoot Real? ›
By Jon Queally
Noted author and 350.org co-founder Bill McKibben was among the first to celebrate word that the president of the European Investment Bank on Wednesday openly declared, "To put it mildly, gas is over" — an admission that squares with what climate experts and economists have been saying for years if not decades.
- Fossil Fuel Industry Is Now 'in the Death Knell Phase': CNBC's Jim ... ›
- Mayors of 12 Major Global Cities Pledge Fossil Fuel Divestment ... ›
- World's Largest Public Bank Ditches Oil and Coal in Victory for the ... ›
Nine feet tall is gigantic by human standards, but when researcher and conservationist Michael Brown spotted a giraffe in Uganda's Murchison Falls National Park that measured nine feet, four inches, he was shocked.
<span style="display:block;position:relative;padding-top:56.25%;" class="rm-shortcode" data-rm-shortcode-id="54af350ee3a2950e0e5e69d926a55d83"><iframe lazy-loadable="true" src="https://www.youtube.com/embed/yf4NRKzzTFk?rel=0" width="100%" height="auto" frameborder="0" scrolling="no" style="position:absolute;top:0;left:0;width:100%;height:100%;"></iframe></span>
- Giraffe Parts Sold Across U.S. Despite Plummeting Wild Populations ... ›
- Green Groups Sue to Get Giraffes on Endangered Species List ... ›
- Conservationists Sound Alarm on Plummeting Giraffe Numbers ... ›
By Daisy Simmons
1. Stay Informed<p>A first order of business in pet evacuation planning is to understand and be ready for the possible threats in your area. Visit <a href="https://www.ready.gov/be-informed" target="_blank">Ready.gov</a> to learn more about preparing for potential disasters such as floods, hurricanes, and wildfires. Then pay attention to related updates by tuning <a href="http://www.weather.gov/nwr/" target="_blank">NOAA Weather Radio</a> to your local emergency station or using the <a href="https://www.fema.gov/mobile-app" target="_blank">FEMA app</a> to get National Weather Service alerts.</p>
2. Ensure Your Pet is Easily Identifiable<p><span>Household pets, including indoor cats, should wear collars with ID tags that have your mobile phone number. </span><a href="https://www.avma.org/microchipping-animals-faq" target="_blank" rel="noopener noreferrer">Microchipping</a><span> your pets will also improve your chances of reunion should you become separated. Be sure to add an emergency contact for friends or relatives outside your immediate area.</span></p><p>Additionally, use <a href="https://secure.aspca.org/take-action/order-your-pet-safety-pack" target="_blank" rel="noopener noreferrer">'animals inside' door/window stickers</a> to show rescue workers how many pets live there. (If you evacuate with your pets, quickly write "Evacuated" on the sticker so first responders don't waste time searching for them.)</p>
3. Make a Pet Evacuation Plan<p> "No family disaster plan is complete without including your pets and all of your animals," says veterinarian Heather Case in <a href="https://www.youtube.com/watch?v=Q9NRJkFKAm4" target="_blank">a video</a> produced by the American Veterinary Medical Association.</p><p>It's important to determine where to take your pet in the event of an emergency.</p><p>Red Cross shelters and many other emergency shelters allow only service animals. Ask your vet, local animal shelters, and emergency management officials for information on local and regional animal sheltering options.</p><p>For those with access to the rare shelter that allows pets, CDC offers <a href="https://www.cdc.gov/healthypets/emergencies/pets-in-evacuation-centers.html" target="_blank">tips on what to expect</a> there, including potential health risks and hygiene best practices.</p><p>Beyond that, talk with family or friends outside the evacuation area about potentially hosting you and/or your pet if you're comfortable doing so. Search for pet-friendly hotel or boarding options along key evacuation routes.</p><p>If you have exotic pets or a mix of large and small animals, you may need to identify multiple locations to shelter them.</p><p>For other household pets like hamsters, snakes, and fish, the SPCA recommends that if they normally live in a cage, they should be transported in that cage. If the enclosure is too big to transport, however, transfer them to a smaller container temporarily. (More on that <a href="https://www.spcai.org/take-action/emergency-preparedness/evacuation-how-to-be-pet-prepared" target="_blank" rel="noopener noreferrer">here</a>.)</p><p>For any pet, a key step is to establish who in your household will be the point person for gathering up pets and bringing their supplies. Keep in mind that you may not be home when disaster strikes, so come up with a Plan B. For example, you might form a buddy system with neighbors with pets, or coordinate with a trusted pet sitter.</p>
4. Prepare a Pet Evacuation Kit<p>Like the emergency preparedness kit you'd prepare for humans, assemble basic survival items for your pets in a sturdy, easy-to-grab container. Items should include:</p><ul><li>Water, food, and medicine to last a week or two;</li><li>Water, food bowls, and a can opener if packing wet food;</li><li>Litter supplies for cats (a shoebox lined with a plastic bag and litter may work);</li><li>Leashes, harnesses, or vehicle restraints if applicable;</li><li>A <a href="https://www.avma.org/resources/pet-owners/emergencycare/pet-first-aid-supplies-checklist" target="_blank">pet first aid kit</a>;</li><li>A sturdy carrier or crate for each cat or dog. In addition to easing transport, these may serve as your pet's most familiar or safe space in an unfamiliar environment;</li><li>A favorite toy and/or blanket;</li><li>If your pet is prone to anxiety or stress, the American Kennel Club suggests adding <a href="https://www.akc.org/expert-advice/home-living/create-emergency-evacuation-plan-dog/" target="_blank" rel="noopener noreferrer">stress-relieving items</a> like an anxiety vest or calming sprays.</li></ul><p>In the not-unlikely event that you and your pet have to shelter in different places, your kit should also include:</p><ul><li>Detailed information including contact information for you, your vet, and other emergency contacts;</li><li>A list with phone numbers and addresses of potential destinations, including pet-friendly hotels and emergency boarding facilities near your planned evacuation routes, plus friends or relatives in other areas who might be willing to host you or your pet;</li><li>Medical information including vaccine records and a current rabies vaccination tag;</li><li>Feeding notes including portions and sizes in case you need to leave your pet in someone else's care;</li><li>A photo of you and your pet for identification purposes.</li></ul>
5. Be Ready to Evacuate at Any Time<p>It's always wise to be prepared, but stay especially vigilant in high-risk periods during fire or hurricane season. Practice evacuating at different times of day. Make sure your grab-and-go kit is up to date and in a convenient location, and keep leashes and carriers by the exit door. You might even stow a thick pillowcase under your bed for middle-of-the-night, dash-out emergencies when you don't have time to coax an anxious pet into a carrier. If forecasters warn of potential wildfire, a hurricane, or other dangerous conditions, bring outdoor pets inside so you can keep a close eye on them.</p><p>As with any emergency, the key is to be prepared. As the American Kennel Club points out, "If you panic, it will agitate your dog. Therefore, <a href="https://www.akc.org/expert-advice/home-living/create-emergency-evacuation-plan-dog/" target="_blank" rel="noopener noreferrer">pet disaster preparedness</a> will not only reduce your anxiety but will help reduce your pet's anxiety too."</p>
Evacuating Horses and Other Farm Animals<p>The same basic principles apply for evacuating horses and most other livestock. Provide each with some form of identification. Ensure that adequate food, water, and medicine are available. And develop a clear plan on where to go and how to get there.</p><p>Sheltering and transporting farm animals requires careful coordination, from identifying potential shelter space at fairgrounds, racetracks, or pastures, to ensuring enough space is available in vehicles and trailers – not to mention handlers and drivers on hand to support the effort.</p><p>For most farm animals, the Red Cross advises that you consider precautionary evacuation when a threat seems imminent but evacuation orders haven't yet been announced. The American Veterinary Medical Association has <a href="https://www.avma.org/resources/pet-owners/emergencycare/large-animals-and-livestock-disasters" target="_blank">more information</a>.</p>
Bottom Line: If You Need to Evacuate, So Do Your Pets<p>As the Humane Society warns, pets left behind in a disaster can easily be injured, lost, or killed. Plan ahead to make sure you can safely evacuate your entire household – furry members included.</p>
- 5 Ways to Be an Eco-Friendly Pet Owner - EcoWatch ›
- Can Your Pets Get and Transmit Coronavirus? - EcoWatch ›