The Salt Lake Tribune has quoted Atwood’s statement, “Yet Asian economies remain hungry for coal, especially coal from Utah, which packs high amounts of energy, but produces less ash and contains smaller amounts of pollution-forming sulfur than most of the world’s coal.”https://www.sltrib.com/news/environment/2019/09/24/closed-eastern-utah-coal/ (Paywall)
From this statement, I wanted to know what was the real interest in coal and what is the true outlook for coal in Utah and Asia. To answer this question I looked at the following subquestions:
- What is the current use of coal in Asia? What is the future outlook for coal in Asia?
- What about CO2 emissions? How does Utah coal rank?
- Does Utah coal produce less ash and sulfur than most of the world’s coal?
- What about the environmental impact on Utah of providing coal to Asia
What is the current use of coal in Asia? What is the future outlook for coal in Asia?
In China, the government has started several initiatives to diversify its energy resources. However, coal is still the primary source of energy production in China, accounting for 70%. China is also engaged in building hundreds of electrical power plants that burn coal.
In India coal is still the dominant fuel for energy production. The Brookings Institute states they expect coal to still remain the dominant fuel in India through 2030 and beyond. Reuters reported India expects to grow coal-fired power capacity 22% in three years. Further, India has an energy policy to bring affordable electricity to all homes. According to BP, 42% of new energy demand will be met through coal.
Demand for coal in the last five years from 2014, has increased in India, South Korea, Indonesia, Vietnam, Malaysia, and the Philippines. Asia as a whole now accounts for 75% of the global demand for coal.
- According to BP’s Energy Outlook, coal use in China is expected to continue to decline to 35% by 2040.
- And while coal demand is increasing in Asia as a whole, global demand is falling.
- Air pollution is a major concern in India, with 14 cities in the World Health Organization’s 20 most polluted in the world.
- According to the Energy Information Agency, the cost per megawatt-hour of coal is now almost on par with solar.
Conclusion – The outlook for coal is mixed. Projected to increase in India, but it is decreasing in the rest of the world.bp-energy-outlook-2019-country-insight-india
What about CO2 emissions? How does Utah coal rank?
The EPA did a study in 1994 to determine the amount of CO2 emissions attributable to using coal for heat and energy production. The amount of CO2 in coal depends largely on the location of the ore deposit. You can read the full report here – but the short summary is: Coal from east of the Mississippi has less LBS-CO2 per million BTU than coal in Utah. Coal in Utah falls in the middle with coal from Wyoming and Montana ranking higher.
For a quick comparison, natural gas releases 117 LBS-CO2 per million BTU compared to an average of 205.7 LBS-CO2 per million BTU. A 45% difference.
- Oil and gas developers are leaking methane into the atmosphere which is also a greenhouse gas. Methane itself is more potent than carbon dioxide. Methane leaking from production, transportation, and use of natural gas can offset the benefits from fuel-switching.
- A new study from Standard finds that the bulk of methane emissions in the US for natural gas can be traced to a couple of bulk emitters. “We’re finding that when it comes to natural gas leaks, a 50/5 rule applies: That is, the largest 5 percent of leakers are typically responsible for more than 50 percent of the total volume of leakage,” said study co-author Adam Bandt.
Conclusion – The CO2 emissions from coal are greater than emissions from natural gas. Coal from Utah is not significantly different than other sources of coal.
Does Utah coal produce less sulfur and ash compared to other coals?
Sulfur emissions from the burning of high sulfur coal have been an issue since the 13th century when London started to use fossil fuel after the exhaustion of wood supplies from the adjoined areas. With time, the intensity in the use of coal increased, and it reached its peak in the early 19th century in North America and Europe.
High sulfur emissions are the main contributor to air pollution and as stated above India has a problem with air pollution.
So, according to a study published by Standard University with data from the EIA, Utah does have some of the lowest sulfur high energy coal in the US and potentially the world. The average heat content for Utah coal ranges from 10,781-11.952 BTU/lb. Sulfur content ranges from 0.4% to 0.9%.
But – Australia also claims that their coal is also low in sulfur and Australia is the largest exporter of coal in the world.
Conclusion – Low-sulfur coal is important and Utah does have a unique offering of low-sulfur high energy coal but is it enough to overcome the challenges related to transportation, port-access, financing, and global competition.
Is there a market for coal from Utah outside some general niche opportunities?
- Total coal production in Utah for 2018 was 13,753 thousand short tons. This is down from 14,417 thousand short tons in 2017, and that was down from a high of 26,131 thousand short tons in 2006.
- Utah recently saw the reopening of a closed coal that could bring up to 400 new jobs, and recently secured an agreement with Baja Mexico for coal exports.
- Per the Utah Geological Society, foreign exports are increasing with coal going through Mexico and California.
- Coal is more competitive against natural gas in regions of the world that do not have abundant supplies of low-cost gas that can be transmitted via pipe as is the United States.
- The BP Global Energy Outlook projects a flatlining and a decrease in coal long-term.
- The International Energy Association shows an overall decline in both volume and share of global coal exports from the United States.
- The global market and policy is against coal in favor or less CO2 emitting fuels. Coal power plants continue to shut down in both Utah, the US, and the World.
- Domestic demand for coal is still very low and will remain low for the foreseeable future.
What about the environmental impact on Utah of providing coal to Asia?
- The environmental impacts of coal mining are well documented. Impacts include land use, waste management, water, and air pollution. Proactive environmental engineering can lessen these risks – but there will still be an impact. In the past and currently, the negative impacts of coal mining have been accepted as a necessary by-product of the generation of coal-based wealth.
- The mining of coal in Utah is managed under the Utah Coal Regulatory Program at the Utah Division of Oil, Gas, and Mining. One of their main missions is to “achieve the successful reclamation of land affected by coal mining activities.”
In summary – the environmental impacts of mining in Utah are known and through proper policy, enforcement, and actions the majority of the negative environmental impacts can be managed and reclaimed.
- Coal plays a current and growing role for power generation in Asia but is unlikely to continue to expand as renewables and global policy continue to apply pressure to coal as a fuel source.
- Utah coal is in the middle for CO2 emissions. Coal continues to be one of the largest contributors to CO2 emissions.
- While Utah coal has a competitive advantage of offering high-heat and low-sulfur content, it is unknown if this is sufficient to make coal competitive on the global market.
- The environmental impacts to Utah of coal are consistent with those found at other coal mines. However, as the market for coal decreases, the environmental impact on the wealth generation ratio will begin to change.
In summary – it is possible that Asia countries want coal from Utah, but there is significant competition to provide coal to Asia. The global outlook for coal demand is projected to remain flat or continue to decrease.