“The Answer to What’s Actually Killing Coal” Is “Not Even Wrong”

Guest post by David Middleton

From Inverse via Real Clear Energy:

The Answer to What’s Actually Killing Coal is Hopeful and Depressing

The real cause of the decline of coal is the free market.

By Dyani Sabin on June 20, 2017
Filed Under Answers, Donald Trump, Jobs, R&B & Solar Energy

As has been reported a lot recently, the coal industry is dying: jobs are in decline as alternative energy sources are more easily available to the masses, and everything from windows to roofs has become more energy efficient. So while technology is killing the coal industry, so are competitors of coal, which still accounts for an astounding 40 percent of electricity worldwide.

Enter a study paid for by two environmental groups — the American Wind Energy Association and Advanced Energy Economy — and conducted by Analysis Group, a consulting firm, timed to come out ahead of a competing Department of Energy study, and the stage is set to answer the question: What is killing coal? The answers will either be depressing (business-killing policies!) or hopeful (better tech and market competition), or perhaps both.

First up, the private study results released Tuesday found that the decline of coal and nuclear plants in the United States has two main causes: the relatively low cost for natural gas, and the fact that electricity demands have not increased.

[…]

The answer is: Both.  So their conclusion that  “better tech and market competition” and not “business-killing policies” are killing coal, is “not even wrong.”

The levelized capital costs for conventional coal-fired power plants ranged from $2,800 to $3,200 per kW in 2010.  By 2014, the EIA estimated that the levelized capital costs of coal-fired power plants entering service in 2019 would be $6,000 per kW.  In the EIA’s most recent LCOE (levelized cost of electricity) analysis, they don’t even include coal-fired power plants without CCS (carbon capture and storage).  The levelized capital costs of coal-fired power plants with CCS entering service in 2022 will be $7,800 to $9,500 per kW.  Almost all of the increase from $3,000 to $9,500 per kW is due to “business-killing policies”… Or planet-saving policies to warmunists.

Setting aside the fact that “business-killing policies” have definitively driven the cost of coal-fired power plants up to noncompetitive levels, they are correct that “the relatively low cost for natural gas” really hurt the coal industry.  The brief plunge in gas prices below $2.00/mcf in 2016 was the “straw that broke the camel’s back” for the largest US coal company, Peabody Energy.

One of the more telling moments during Tuesday’s interview came toward the beginning, when Kellow was summarizing the events around Peabody’s descent into chapter 11. He noted that, around the same time, U.S. natural gas prices hit a low of $1.67 per million BTUs. He was off by a few a cents — as he acknowledged he might be — at least according to Bloomberg data. Whatever; the point is that the CEO of a coal-mining company who quotes historical natural-gas prices down to the cent clearly knows the enemy.

NatGas

As I’ve written here and here, the shale boom fracked the ground from underneath the U.S. coal sector. The industry simultaneously self-administered a coup de grâce in the form of ill-timed acquisitions, loading up with debt just as the market went south. President Barack Obama’s tightening of the regulatory screws on coal-fired power essentially closed the door on any revival.

Bloomberg Gadfly

Apparently the geniuses at the “two environmental groups” haven’t been “keeping up with current events.”

Natural gas prices are currently in the neighborhood of $3.00/mcf, well above the “killing coal” line (more on this later).

Back to the Inverse article:

It’s not that renewables have become so cheap that they’re killing coal, it’s that our technology has improved so natural gas is having an economic renaissance. It was the financial pressure from natural gas costs, which dropped and stayed low starting in the early 2000s, that delivered coal’s death blow.

Inverse

Wow!  They managed to be “not even wrong” twice in one article!

“It was the financial pressure from natural gas costs, which dropped and stayed low starting in the early 2000s, that delivered coal’s death blow.”

AEUHHH????

Natural gas “costs” skyrocketed from 2000-2009…

Coal_Gas_1

Natural gas prices rose sharply from 2000-2009. The combination of the financial collapse and subsequent no-growth economy coupled with an over-supply of natural gas due to the shale boom caused a collapse in natural gas prices. When natural gas is below $2.50/mcf coal is noncompetitive. However, at prices above $3.00/mcf. coal becomes increasingly profitable.  (Bloomberg Gadfly, US EIA)

The “death blow” to coal occurred in 2009, when natural gas prices collapsed:

Coal_Gas_2

US coal production began to collapse in 2009 due to the collapse in natural gas prices. Coal’s recovery from this “death blow” is already underway. (US EIA, US EIA)

In the Energy Information Administration’s reference case, natural gas prices are forecast to rise to about $4.50/mcf by 2020 and climb above $5.00/mcf by 2030.  Coal is extremely competitive with natural gas in EIA’s reference case.  It’s even competitive in the “high oil and gas resource technology” scenario.

Coal_Gas_3

Natural gas prices are not expected to remain in coal’s “death blow” range. (US EIA)

Unless “death blows” have a recovery rate comparable to extinct Central American toads, Inverse’s “answer to what’s actually killing coal” isn’t even wrong.  The same market forces that caused the coal industry to decline over the past decade are already leading to its recovery (The Resurgence of the American Coal IndustryThe Resurgence of the American Coal Industry, Part Deux: An Unexpected Ally)

To paraphrase Samuel Clemens: “The reports of coal’s death are greatly exaggerated.”

Chapter 4. Coal

Overview
In the IEO2016 Reference case, coal remains the second-largest energy source worldwide—behind petroleum and other liquids—until 2030. From 2030 through 2040, it is the third-largest energy source, behind both liquid fuels and natural gas. World coal consumption increases from 2012 to 2040 at an average rate of 0.6%/year, from 153 quadrillion Btu in 2012 to 169 quadrillion Btu in 2020 and to 180 quadrillion Btu in 2040.

[…]

U.S. EIA

figure_4-1

Global demand for coal will continue to rise for decades, creating export opportunities for US coal companies. (US EIA)

 

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122 thoughts on ““The Answer to What’s Actually Killing Coal” Is “Not Even Wrong”

  1. … business-killing policies …

    President Trump has something to say about that:

    As one example — and this happened just 30 minutes ago — I was sitting with a great group of people responsible for their state’s economic development and roadways. All of you are in the room now. And one gentleman from Maryland was talking about an 18-mile road. And he brought with him some of the approvals that they’ve gotten and paid for. They spent $29 million for an environmental report, weighing 70 pounds and costing $24,000 per page.

    And I said, do me a favor. I’m going to make a speech in a little while. Do you mind if I take that and show it? So I’m going to show it. So they spent millions and millions of dollars. When I said, how long has this short roadway been talked about, the gentleman said, well, if you say 20 years, you’re safe. I said, yeah, don’t say anymore because I have to be — you know, I have to be exactly accurate with these people. I was off by like two months — it’s a major front-page story.

    But these binders on the stage could be replaced by just a few simple pages, and it would be just as good. It was actually be much better. Because these binders also make you do unnecessary things that cost billions and billions of dollars and they actually make it worse. link

    The trouble with government regulation is how it snowballs. Someone says, ‘there ought to be a law.’ It sounds like a good idea and it kinda works. Then it repeats infinitely. All good ideas and they all kinda work but when you put them all together, the system bogs down and nothing gets done. Not only that but only large companies have the wherewithal to deal with the paperwork. The result is that the smart hardworking person with a better idea can’t even get off the ground. Innovation is killed and the economy is smothered and dies.

    Think about it … 29 million bucks … that would get you around a hundred person years of experts. People could spend their whole careers doing paperwork for one short highway. What a waste.

    • Ya it’s pretty blindingly obvious to most – with the notable exceptions of bureaucrats – that you have to periodically take scythe, chainsaw and flamethrower to bureaucracy and rationalise the whole thing down to bedrock or the life is throttled out of everything indeed.

      • The more corrupt the state, the more numerous the laws. Tacitus
        The more laws and order are made prominent, the more thieves and robbers there will be. Lao Tzu
        The more laws and restrictions there are, The poorer people become Lao tzu

      • History informs that all governments, when founded, are destined to choke and die on the untenable burden that is produced by their own excessive greed, stupidity and incompetence. We are witnessing the process as it currently progressing in that strange little foreign country that is called called The District of Columbia.

        While with the typical course of events, few of us who are alive today are likely to live long enough to witness the final implosion, but then who knows? It could come at any time and bear a resemblance to a high-flying hot air balloon that runs out of fuel………….

      • “History informs that all governments, when founded, are destined to choke and die on the untenable burden that is produced by their own excessive greed, stupidity and incompetence.” Oop, there it is.

  2. Coal mines are planned on 20-50 year timelines. Hard rock gas wells have a 3-5 year life.

    And there is graft..consider Aubrey McLendon thought it better to drive head on into a bridge abutment than be indicted on corruption regarding his tenure at Chesapeake Energy, the main player in the natural gas boom.

    • Keith what the heck is a “hard rock gas well”? Did u mean tight / tite rock gas well?
      And where did you get 3 – 5 years for a well life what pool / formation?

      • Yeah… In geology, “hard rock” generally refers to igneous and metamorphic rocks.

        The length of time that gas wells produce is extremely variable, even within the same reservoir.

        And individual gas wells aren’t analogous to coal mines. Gas fields would be more analogous. Many large natural gas and oil fields will produce for well over 50 years.

    • I’m not sure what graft has to do with a comparison of natural gas vs coal. McClendon used the company as his personal piggy bank, but that related to lack of board oversight rather than the product the company produces.

      • The indictment had nothing to do with graft and was very flimsy. https://www.forbes.com/sites/christopherhelman/2016/03/01/the-federal-indictment-of-aubrey-mcclendon/#1932aa80574a

        Aubrey K. McClendon has been charged by a federal grand jury with conspiring to rig bids for the purchase of oil and natural gas leases in northwest Oklahoma, the Department of Justice announced today.

        The indictment alleges that McClendon orchestrated a conspiracy between two large oil and gas companies to not bid against each other for the purchase of certain oil and natural gas leases in northwest Oklahoma. During this conspiracy, which ran from December 2007 to March 2012, the conspirators would decide ahead of time who would win the leases. The winning bidder would then allocate an interest in the leases to the other company. McClendon instructed his subordinates to execute the conspiratorial agreement, which included, among other things, withdrawing bids for certain leases and agreeing on the allocation of interests in the leases between the conspiring companies.

        https://www.justice.gov/opa/pr/former-ceo-indicted-masterminding-conspiracy-not-compete-oil-and-natural-gas-leases

        There is little difference, if any, between McClendon’s alleged crime and standard joint venture agreements.

  3. But so long as coal plants keep closing, with 90% of US coal going to coal power plants, coal will continue to decline.

    And coal plant closures have continued to be announced since Trump took office.

    The number of already announced coal plant shut downs ensure the decline continues throughout Trumps current term in office (impeachment fantasy aside!)

    (Demand too looks like staying flat: energy efficiency like LEDs will ensure that)

    A recovery would need more coal power plants to be built and for a substantial hike in the gas price to make that investment worthwhile.

    Even with a rise in gas prices, falling solar and battery prices and other developments will ensure renewables continue to provide an increasing chunk of demand – and if gas produced electricity becomes more expensive, fixing your costs with renewables looks more attractive.

    I still don’t see this recovery: where is more coal going to get burned, when, and what has to happen to natural gas to make it likely?

    (the Trump administration is surely easing, not increasing the costs for gas producers?)

    • Griff

      (the Trump administration is surely easing, not increasing the costs for gas producers?)

      To the extent Trump has rolled back Obama’s regulatory malfeasance, it hasn’t had much effect yet.

      Griff

      I still don’t see this recovery: where is more coal going to get burned, when, and what has to happen to natural gas to make it likely?

      More natural gas will be exported.

      Griff

      Even with a rise in gas prices, falling solar and battery prices and other developments will ensure renewables continue to provide an increasing chunk of demand – and if gas produced electricity becomes more expensive, fixing your costs with renewables looks more attractive.

      Renewables can’t replace coal, nuclear or natural gas.

      Griff

      A recovery would need more coal power plants to be built and for a substantial hike in the gas price to make that investment worthwhile.

      Wrong. Existing coal-fired plants just have to resume running at a higher capacity.

      Griff

      But so long as coal plants keep closing, with 90% of US coal going to coal power plants, coal will continue to decline.

      Wrong.

      Coal exports for the first quarter of 2017 were 58% higher than in the same quarter last year, with steam coal exports increasing by 6 million short tons (MMst). Coal producers that have completed bankruptcy reorganizations and companies that purchased bankrupt assets have increased both exports and production in 2017. EIA expects growth in coal exports to slow in the coming months, with exports for all of 2017 forecast at 72 MMst, 11 MMst (19%) above the 2016 level. The increase in coal exports contributes to an expected 8% increase in coal production in 2017.

      https://www.eia.gov/outlooks/steo/report/coal.cfm

      Griff

      And coal plant closures have continued to be announced since Trump took office.

      The number of already announced coal plant shut downs ensure the decline continues throughout Trumps current term in office (impeachment fantasy aside!)

      Yayyy! You got something right! Impeachment is a fantasy.

      Coal production has increased since Trump’s election…

      For the week ended June 17, 2017
      Estimated U.S. coal production totaled approximately 15.8 million short tons (mmst)
      This production estimate is 1.8% higher than last week’s estimate and 17.2% higher than the production estimate in the comparable week in 2016

      https://www.eia.gov/coal/production/weekly/

      The closure of plants that are barely operating has little effect on coal production.

    • Griff,

      Coal production would grow in the US if we were allowed to export it to China, whose coal is low in BTUs and dirty. They’d rather buy ours, but Oregon won’t allow “death trains” from Wyoming to unload at the Port of Boardman on the Columbia River.

      Natural gas is beating out coal for power production in the US, but windmills and solar farms still need fossil fuel backup, often coal.

      • Gabro:
        A good portion of the Wyoming coal is shipped out through the coal terminal south of Vancouver, BC.

      • The inability to distinguish short-term fluctuations from long-term trends is a common trait among Malthusians.

      • Which is why China is opening coal fired plants as fast as they can be built. Wow, you really shut us up!

    • Griffy,
      So much wrong, so I’ll just pick one thing: electricity demand. If you and your eco-friends get you way with electric cars (huge replacement of IC cars), demand will surge in the next decade or two. Energy efficiency won’t put a dent in that.

    • Both power plants were over 50 years old…

      The closures take place just six years after the company’s power-generation subsidiary, PSEG Power, completed more than $1 billion in upgrades to environmental controls at the two sites to comply with new federal emissions standards. Though the company correctly anticipated stricter environmental regulations, it did not foresee the tumble in energy prices brought on by shale gas.

      “We made a bet on high gas prices,” Ralph Izzo, PSEG’s chief executive, said in an interview last week. “We got that wrong.” The company took a loss of $555 million last year on the plant closures and anticipates an additional non-cash write-off of up to $960 million in 2017.

      Environmentalists claimed credit for forcing the two coal plants to close, but PSEG says it was really fracking that undermined them. “The way the market works, the economics don’t work,” Bill Thompson, PSEG Power’s senior director of operations, said during a Mercer plant tour last week. “They’re not getting shut down for equipment conditions. It’s just economics.”

      […]

      Ten years ago, the plant ran nearly every day, producing more than three million megawatt hours of electricity, according to PSEG Power. In 2016, Mercer produced a mere 1,867 megawatt hours. Last year, it operated only two days in January, when the regional power-grid operator, PJM Interconnection, called on it to meet high winter demand. The generation station has been inactive for 17 months.

      […]

      10 years ago, natural gas was >$5.00/mcf. Ten years from now, natural gas will probably be approaching $5/mcf.

      Had they anticipated the crash in natural gas prices, they wouldn’t have spent $1 billion to comply with “business-killing policies.” They would have shuttered the aging power plants six years ago.

      When you sink $1 billion into a pair of 50-60-yr old power plants to comply with “business-killing policies” and six years later can only operate the plant 2 days a year, you don’t have much choice other than to write it off.

      Powder River coal is much less expensive than natural gas and Appalachian coal is competitive with natural gas.

      https://www.eia.gov/electricity/monthly/update/resource_use.php#tabs_spot-2

      • The recent rules on coal combustion waste has added just not cost in how the material is disposed, but long term liability for managing the waste. As you are pointing out, it is not just the price of natural gas, but the combination of increased regulation on multiple fronts. Power generators are choosing gas over coal because gas comes with a lot less headaches.

      • David Middleton June 22, 2017 at 7:51 am
        When you sink $1 billion into a pair of 50-60-yr old power plants to comply with “business-killing policies” and six years later can only operate the plant 2 days a year, you don’t have much choice other than to write it off.

        The reason they were only operated 2 days a year was because coal was too expensive!

        Powder River coal is much less expensive than natural gas and Appalachian coal is competitive with natural gas.

        The reason PR coal is that cheap it because its transportation cost are so high (2/3rds of cost at the power station). Also the cost of PR coal will go up because they’ve already mined the easy part, the overburden will increase and therefore the cost of production.

  4. There oughta be a law requiring wind turbine operators to secure bond money for demolition and site reclamation or at a minimum turbine replacement in the event turbines become non-operational for whatever reason (other than of course when the wind stops blowing…). Is there?

    • There are requirements fornuclear plants to pay a certain portion of each kWhr sale to not only take care of nuclear wastes, but alsoto dismantle the plant when its lifespan is over. In fact, the govt was collecting way more than required for nuclear waste handling ad was ordered by the courts to return billions to the nuclear plant operaters

      • The guidance document you link applies only to offshore installations and then only if they become “disused” which is undefined. Quite so. Then come the “teeth”, of the guidance document:

        “General requirement to remove installations
        7.6 Considering our commitments under UNCLOS, and taking account of the IMO
        standards as well as the work of OSPAR, we believe it is generally accepted
        that the ‘ideal’ decommissioning programme involves removing the whole of all
        disused installations and structures. We recognise that extending the life of the
        installation, or reusing the infrastructure in a beneficial way, will often be
        preferred, and we would wish to encourage this. Nonetheless, there is likely to
        come a time when the installation becomes ‘disused’, when extending its life or
        finding a beneficial reuse is no longer possible, and, at that point, a
        decommissioning programme should be carried out.”

        Indeed. If I may translate: “Considering this and taking into account that and someone else’s work we believe it’s generally accepted that the ideal is blah blah blah. Further we recognize that not actually fully decommissioning these unused environmental edifices may in fact be preferable and this we encourage. Even so, in spite of our best efforts to stall there may come a time when even environmentalists cannot with a straight face defend doing anything other than tearing these mistakes completely down. In that event, it SHOULD happen (but still, might not).

        A bit different than what I had in mind.

  5. That’s odd; I thought the envirostalinists hated fracking. Yet, they “love” NG because it is helping them to “kill coal”. How convenient.

      • Keep your eye on the next-gen coal technology recently launched in Japan, developed by a group of high end engineering firms. It has so far demonstrated cost effective production numbers and CO2 emissions on par with NG. It also happens to have the full backing of the Japanese government which is looking to these clean coal plants to replace nuclear generating capacity lost following Fukushima.

  6. Totally off topic, but too good to pass up. One of the BLM data sets is showing Lake Mead water level at 16,300 above sea level, the California drought is most surely over, forever, as it puts the peak of Whitney more than 1000 feet under water

  7. This talk about future energy power beyond the next decade fails to acknowedge the coming revolution in nuclear power technology : molten salt reactors, which are totally safe, cheaper than any other power technology, easily and quickly built and sited. All talk of future natural gas, coal, wind and sollar is irrelevant.

    • Arthur4563, how can you say that a MSR can ” easily and quickly built ” when there is not a single commercial plant as yet built?

      • Just like celluistic ethanol plants would be quickly, cheaply, and easily built 20 years ago, and fusion has been 10 years aways for the past half-century.

        The government shouldn’t be picking winners and losers. They have a bad track record of that.
        The “upcoming breakthroughs” in Popular Science and the like are, if anything, even worse.

      • Luis: When I was in my last year of ChE (1952) I was offered a job with (I think) Tennessee Products, to work on molten salt reactors. Turned it down. Maybe that is why the program hasn’t matured…all my fault. (lol)
        JimBrock, ChE Auburn 1952; JD Georgetown1960; Order of the Retired, current.

    • Why must people constantly put forth “the future” of energy claims? That is exactly how we got this wind and solar mess. It was THE FUTURE OF ENERGY. Such claims only strengthen the fantasies of the gullible who then politically press for the ideas. Wind energy sold to the foolish and idealistic because it is the energy of the future (and the past and whatever). There is NO energy of the future. There is only what we have NOW. If a viable energy source is found and is incorporated into the energy mix or replaces most of it, then it is part of NOW. There is no magical energy of the future.

  8. its amazing that one of the biggest corporate scandals in our lifetime, Enron, was a huge nat gas player … the nat gas market has a history of “interesting” characters and accounting practices … rent seeking nat gas companies have always been the biggest funder and lobbyist for anti-coal regulations and CO2 hysteria …

      • Hi David,
        I assume the tin foil hat is directed at Kaiser Derden, but do you believe the thrust of his remarks are based on fantasy?
        What other reason do IOCs vocally support a ‘price on carbon’ and spend so much lobbying for it (even while in the grip of cost/efficiency intiatives during the recent downturn), knowing that it will needlessly inflate the cost of the product? The business case is obvious; replace coal with gas in reliable electricity generation and watch the profits roll in. And to top it off, it’s all a grand and nobleguesture to save the planet; nowt to do with market manipulation or anything like that.
        Of course anyone with a brain not swimming in kool-aide knows that if unreliables like wind are the answer, the question wasn’t worth asking, so convincing the likes of Germany to ‘go green’ and also taxing coal out of the equation means importing gas instead of burning indiginous coal. Or asking the last person to leave to please turn off what few lights remain on; a toss up which way the EUssr wants to go in that respect.
        For all the bullshit virtue signalling about ‘…not only being part of the problem, but being part of the solution to the biggest challenge of our generation…’, the intent is very thinly veiled. The business case becomes blatantly obvious the moment the speech turns to natural gas being the bridging fuel to the low carbon future usually followed by the reassurances to shareholders that gas demand is going north for the next three decades.
        The hypocrisy used to be primarily a European condition, but now that Reg Tillerson has left ExxonMobil, even their official line is straight from the virtue signalling gobshite’s hymn book.

      • Erny72 June 22, 2017 at 9:56 am
        Hi David,
        I assume the tin foil hat is directed at Kaiser Derden, but do you believe the thrust of his remarks are based on fantasy?

        It is and fantasy is too weak of a word.

        Erny72

        What other reason do IOCs vocally support a ‘price on carbon’ and spend so much lobbying for it (even while in the grip of cost/efficiency intiatives during the recent downturn), knowing that it will needlessly inflate the cost of the product?

        The major oil companies that support a carbon tax don’t support it because they have bought into the CAGW myth or because they think it is a good idea.

        They became convinced that the US government would impose some manner of carbon regulation and realized that a carbon tax would be the least disruptive form. When a company is convinced that the government is about to impose regulations that will harm their business, they have an obligation to lobby for the least harmful form of regulation.

        Erny72

        The business case is obvious; replace coal with gas in reliable electricity generation and watch the profits roll in.

        Natural gas has been displacing coal for a decade because:

        1) Past environmental regulations have made new coal power plants economically unfeasible.
        2) The collapse in natural gas prices.

        The gradual displacement of coal with natural gas isn’t leading to a “windfall.” At $3.00/mcf no shale play breaks even, much less rolls in profits:

        Significant profits don’t begin to “roll in” below $4.50 to $5.50/mcf.

        https://www.oilandgas360.com/median-breakeven-price-oil-55-per-barrel-gas-3-50-per-mcfe-klr/

        If “big oil” was trying to undercut for big profits, they are doing it wrong.

        There was also the fact that continued public opposition to carbon regulation might just lead to a tobacco-style inquisition.

        ExxonMobil and its partners in denial have manufactured controversy, sown doubt, and impeded progress with strategies all-too reminiscent of those used by the tobacco industry for so many years. The net result of this unfortunate campaign has been a diminution of this nation?s ability to act internationally, and not only in environmental matters.

        In light of the adverse impacts still resulting from your corporation?s activities, we must request that ExxonMobil end any further financial assistance or other support to groups or individuals whose public advocacy has contributed to the small, but unfortunately effective, climate change denial myth. Further, we believe ExxonMobil should take additional steps to improve the public debate, and consequently the reputation of the United States. We would recommend that ExxonMobil publicly acknowledge both the reality of climate change and the role of humans in causing or exacerbating it. Second, ExxonMobil should repudiate its climate change denial campaign and make public its funding history.

        https://www.documentcloud.org/documents/3037155-2006-Senate-Letter-to-ExxonMobil-CEO-Rex-Tillerson.html

        While there is no analogy between the tobacco industry and ExxonMobil’s support for the CEI and other skeptical groups, the threat of a Federal inquisition was very real. And there was also a great deal of pressure from Wall Street. Almost all major oil companies are publicly traded and have to kowtow or at least pay lip service to Wall Street.

        Erny72

        The hypocrisy used to be primarily a European condition, but now that Reg Tillerson has left ExxonMobil, even their official line is straight from the virtue signalling gobshite’s hymn book.

        Rex Tillerson and other major oil company CEO’s did advocate “keeping a seat at the table” in the Paris climate farce,as did several major coal company CEO’s.

        This wan’t because they thought Paris was a good deal. It was because they wanted to ensure that support for carbon sequestration remained a priority. In a full-blown decarbonization frenzy, carbon sequestration would be vital to the survival of the entire fossil fuel industry: Coal, oil and gas. And the coal companies view export markets as their primary growth market… Keeping a seat at the table was viewed as being beneficial to their access to export markets. I think they were wrong about the benefits of keeping a seat at the table; but that was their reasoning.

      • David Middleton it should be noted that you’re in flagrant disregard of everything known about the hydrocarbon industry when you claim they didn’t finance most of the AGW scare. Whatever it is you think propaganda is going to do for you, it’s not going to erase the well known history of Environmentalism in the west,

        and Oil companies tight relationship with fake climate pseudo-scientists as revealed in Climategate.

      • “Big Coal” supported staying in the Paris climate farce…

        Some big American coal companies have advised President Donald Trump’s administration to break his promise to pull the United States out of the Paris Climate Agreement – arguing that the accord could provide their best forum for protecting their global interests.

        Remaining in the global deal to combat climate change will give U.S. negotiators a chance to advocate for coal in the future of the global energy mix, coal companies like Cloud Peak Energy Inc and Peabody Energy Corp told White House officials over the past few weeks, according to executives and a U.S. official familiar with the discussions.

        “The future is foreign markets, so the last thing you want to do if you are a coal company is to give up a U.S. seat in the international climate discussions and let the Europeans control the agenda,” said the official, who asked not to be named because he was not authorized to speak publicly on the issue.

        “They can’t afford for the most powerful advocate for fossil fuels to be away from the table,” the official said.

        Cloud Peak and Peabody officials confirmed the discussions.

        […]

        http://www.reuters.com/article/us-usa-trump-coal-idUSKBN1762YY

        For the same reason that “Big Natural Gas” supported staying in the Paris Climate Farce…

        Cheap natural gas — not tough environmental regulations — has been the leading cause of the demise of coal. Still, last month Trump tried to provide the badly struggling coal industry a boost by starting to undo Obama’s Clean Power Plan that aimed to cut carbon emissions by power utilities, one of the largest sources of greenhouse gases.
        Cheniere Energy, (LNG) a natural gas company, sent the White House a letter on Monday describing the Paris agreement in terms that would fit Trump’s America First ethos.
        The Paris accord is a “useful instrument for fostering demand for America’s energy resources and supporting the continued growth of American industry,” Cheniere wrote.

        In the face of impending government regulations, it is essential to maintain a “seat at the table.”

        However, the fact that the G-7 and G-20 have failed to put up a united front to isolate the US, it appears that a seat at the Paris table wasn’t all that important.

      • Mr Middleton those of us who have watched the mass immigration of stupid into what’s claimed as ‘scientific discourse’ in order to turn science into a sewer,

        recognize very easily when a claim has reached it’s limits and been debunked.

        That’s when the name calling without content begins and you do it pretty frequently.

        If you have a point, state it, with the evidence you have for it.

        We’ve all gone through the years of arguing with people who can’t take the heat of kitchens they claim to have joined as expert chefs.

        On top of it, I have 2 older children who do research here occasionally. I don’t need them believing the way you behave, is the way scientifically literate people are supposed to.

    • You’re precisely right Kaiser Derden. The cozy relationship between hydrocarbon corporations and the environmental movement they founded is the stuff of legend. Its troubling Mr Middleton is so busy calling names and not learning what he’s talking about.

      In no particular order here’s a quick spin through the top-of-the-pile information about just who puts all the money into the environmental movement.

      https://wattsupwiththat.com/2011/06/29/the-log-in-the-eye-of-greenpeace/

      Note in the next article the constant presence of the – Rockefeller brothers. As in ”Rockefeller Oil Empire.”

      http://www.sweetliberty.org/issues/un/environment.htm

      http://nofrakkingconsensus.blogspot.ca/2010/06/bp-greenpeace-big-oil-jackpot.html

      http://www.cnbc.com/2014/09/05/shell-tries-to-spin-oil-into-a-green-as-in-the-environment-future.html

      The Oil companies founded the Western environmental movement. They were the people who established all the climate college campuses on university grounds worldwide.

      • The Rockefeller Foundation is not the oil industry. They are the descendants of the founder of Standard Oil Company of which Exxon and Mobil (now ExxonMobil) were formed.

        The Rockefellers are the primary backers of the #ExxonKnew campaign against ExxonMobil for its support of AGW skeptics and a mythical conspiracy that Exxon covered up evidence of AGW.

        BP’s “beyond petroleum” ad campaign does not back up any of your scurrilous lies about the oil industry…

        A commentary by David and Amy Ridenour in the Washington Times of June 14th last year, showed the major extent of funding to environmental groups by BP, who were being attacked by those same groups over the oil spill in the Gulf.

        BP was also a founding member of the U.S. Climate Action Partnership, (not the same as the Climate Action Network) contributing substantial funding to the climate-change-related lobbying efforts of the environmental groups within it, which include the Environmental Defense Fund, Natural Resources Defense Council, the Nature Conservancy and the World Resources Institute.

        The new “climate friendly” BP was first promoted by BP CEO, Lord John Browne in 1997, (then Sir John Browne), now on the Climate Change Advisory Board of Deutsche Bank along with Dr Pachauri of the IPCC and Professor John Schellnhuber of the German Potsdam Institute for Climate Impact Research.

        The cited Washington Times article notes that BP contributed money to numerous environmental groups; but that their contributions were relatively small relative to the groups’ income…

        As many of the policy organizations receiving BP donations have been environmental groups, the moral and environmental imperatives of returning the gifts is obvious. According to published reports, major environmental advocacy organizations that accepted major gifts from BP in recent years include the Nature Conservancy, the World Wildlife Fund, the World Resources Institute, various branches of the Audubon Society, the Wildlife Habitat Council and others. Many politicians from both political parties who also took contributions have in recent weeks been harsh critics of BP. It would be inappropriate, on the one hand, to criticize BP for taking what appear to have been shortcuts with safety and environmental needs while, at the same time, profiting from BP’s business model.
        BP also was a founding member of the U.S. Climate Action Partnership, contributing substantial funding to the climate-change-related lobbying efforts of the environmental groups within it, which include the Environmental Defense Fund, Natural Resources Defense Council, the Nature Conservancy and the World Resources Institute.

        […]

        The Nature Conservancy, a BP grantee, reported nearly $1.4 billion in revenue in 2007-08, against about $900 million in expenses, with net assets of nearly $5 billion. Although only BP and the Nature Conservancy know for sure, published reports say the Nature Conservancy has received about $10 million from BP – enough to make a big difference in the cleanup effort but a relatively small amount to the Nature Conservancy.
        The World Wildlife Fund, another BP grantee, raised $10 million more in fiscal 2008 than it spent and had nearly $300 million in net assets. Researchers at the National Center for Public Policy Research have found evidence of grants totaling slightly less than $1 million in BP donations to this institution. Yet another group, the World Resources Institute, had more than $50 million in net assets and reportedly received at least $200,000 from BP.
        The Natural Resources Defense Council had $107 million in revenue in fiscal 2008 against expenses of $78 million, with net assets of $186 million. The Environmental Defense Fund had revenue of $122 million in fiscal 2008 against expenses of $97 million, with net assets of $25 million. These environmental organizations are to the nonprofit community what the Fortune 100 is to the business community.

        I’ve contributed to the Nature Conservancy in the past. Why? Because their business model was to purchase property in order to protect habitats. This, in no way, constitutes support of the CAGW myth.

        Nothing you have posted supports these scurrilous lies:

        It’s actually oil companies that sponsored most of those fake-paper grants the pseudo scientists who completely took over environmentalism wallpaper their profit margins with.

        Oil companies are heavily BEHIND the climate scare. They may have seemed to take a drubbing in the news, but in actual fact they were the ones PAYING a LARGE proportion of all the GRANTS delivering up ”research” saying we have to get off COAL.

        The environmentalists were shown to be heavily in bed with Oil companies paying their grants in Climategate. Scientists were all happy to be sharing they’d had a ”great meeting” with oil companies.

        What that is code for is ”more pay checks”.

        The reason oil companies do it is their place in the pollution business had them basically financing the founding of all environmental campuses on university properties worldwide.

        They pay the scientists and the scientists make kook claims. It alarms many but when it’s all said and done the scientists’ reputations suffer, far more than the oil companies’.

        Then they oil companies have ALL this research done FOR them regarding what investments in developing energy they have to migrate to.

      • I was just wondering why Alfred was continuing to benefit from Evil Petroleum instead of being a True Eco-Hero and showing us all how wonder life is living in the pre-industrial paradise he apparently wants to drag all of us down into? Considered pointing out the blatant lies and stupidity of calling the Rockefeller Foundation “big oil”, but I was in a hurry and gave it a pass.

      • I’ve been in the oil industry for 36 years, entirely in “smaller companies.” I’ve never seen one scintilla of evidence that “big oil” was manipulating regulations or prices for any reason, much less to stifle competition from “little oil.” “Big oil” and “little oil” generally don’t even play the same game.

        All oil companies benefit from smart, consistent regulations. Onerous, dynamic regulatory environments like the Obama administration are tougher on smaller companies than larger companies. However, no oil companies benefit from bad regulations.

        BSEE’s idiotic new well control rule hurts everyone working the Gulf of Mexico OCS, from the smallest “bottom feeders” (of which there are dozens) up to ExxonMobil. This rule is hurting smaller companies more than “big oil”…

        But the entire industry opposed it…

        Exxon Says ‘$25B Rule’ Will Sink Deepwater Oil Drilling

        by Bloomberg|Joe Carroll|Thursday, April 14, 2016

        (Bloomberg) — The world’s biggest oil explorers are fighting a U.S. plan to toughen offshore drilling rules that Exxon Mobil Corp. said will cost $25 billion over 10 years and render many offshore discoveries worthless.

        The Obama administration is expected to issue the sweeping new regulations Thursday, a person familiar with the decision said, as part of an effort to reduce the number of well blowouts after the explosion aboard the Deepwater Horizon rig in 2010. The government has pegged the rules’ costs at less than $1 billion.

        The changes would arrive amid the worst oil slump in a generation. ConocoPhillips and Chevron Corp. have already abandoned some Gulf prospects because they wouldn’t be profitable at current prices. If the proposals are enacted, exploration outlays in the Gulf will tumble by 70 percent over the next two decades, wiping out as many as 190,000 jobs, according to consulting firm Wood Mackenzie Ltd.

        “The Gulf of Mexico is already in a deep downturn as a result of lower oil prices,” said Robin Shoemaker, an industry analyst at Keybanc Capital Markets Inc. “Oil companies and the service providers are trying to come up with ways to reduce costs so the idea that they can absorb any additional expenses — they’re not in that ballpark at all.”

        […]

        http://www.rigzone.com/news/oil_gas/a/143989/Exxon_Says_25B_Rule_Will_Sink_Deepwater_Oil_Drilling

        “Big oil” funds a lot of things. The ExxonMobil Foundation funds anti-malaria programs, STEM education (particularly for women and minorities). They used to fund the Competitive Enterprise Institute until they were threatened with a tobacco-style inquisition.

        ExxonMobil and its partners in denial have manufactured controversy, sown doubt, and impeded progress with strategies all-too reminiscent of those used by the tobacco industry for so many years. The net result of this unfortunate campaign has been a diminution of this nation?s ability to act internationally, and not only in environmental matters.

        In light of the adverse impacts still resulting from your corporation?s activities, we must request that ExxonMobil end any further financial assistance or other support to groups or individuals whose public advocacy has contributed to the small, but unfortunately effective, climate change denial myth. Further, we believe ExxonMobil should take additional steps to improve the public debate, and consequently the reputation of the United States. We would recommend that ExxonMobil publicly acknowledge both the reality of climate change and the role of humans in causing or exacerbating it. Second, ExxonMobil should repudiate its climate change denial campaign and make public its funding history.

        https://www.documentcloud.org/documents/3037155-2006-Senate-Letter-to-ExxonMobil-CEO-Rex-Tillerson.html

        While there is no analogy between the tobacco industry and ExxonMobil’s support for the CEI and other skeptical groups, the threat of a Federal inquisition was very real. And there was also a great deal of pressure from Wall Street. Almost all major oil companies are publicly traded and have to kowtow or at least pay lip service to Wall Street.

        To the extent that “big oil” supports AGW nonsense, it’s through the promotion of natural gas (the “gas” in Oil & Gas Industry is natural gas, not gasoline). ExxonMobil and other members of “big oil” support a carbon tax over cap & trade and other schemes because it is the least damaging to their business… They are convinced that carbon will be regulated and are trying to influence the regulation in their favor – Not because they have bought into AGW. They pay lip service to it because they have to. All industries try to influence regulations in their favor.

        There is no evidence at all that the oil industry is the primary or even significant sponsor of research supporting CAGW and very little evidence that they are a primary funder of CAGW skeptics…

        In truth, the overwhelming majority of climate-research funding comes from the federal government and left-wing foundations. And while the energy industry funds both sides of the climate debate, the government/foundation monies go only toward research that advances the warming regulatory agenda. With a clear public-policy outcome in mind, the government/foundation gravy train is a much greater threat to scientific integrity.

        Read more at: http://www.nationalreview.com/article/414359/global-warming-follow-money-henry-payne

        Grants from publicly traded companies like ExxonMobil are very transparent…

        ExxonMobil: Grants for Higher Education

        OVERVIEW: ExxonMobil’s philanthropic focus areas are on STEM education (especially for women and girls), health, and biodiversity and conservation. Within that scope, the ExxonMobil Foundation has a partially overlapping emphasis on math and science education, women’s economic empowerment, and efforts to combat malaria.

        IP TAKE: ExxonMobil gives big to higher ed as well as job and skills training (both in the U.S. and internationally) in areas where it has a community presence, but unsolicited requests are rarely accepted or approved.

        […]

        Broadly speaking, ExxonMobil’s core focus is on STEM education (especially for women and girls), health, and biodiversity and conservation. The foundation, meanwhile, currently “has a strategic focus supporting math and science education, for promoting women as catalysts for economic development and ending deaths from malaria.” In a recent year, combined giving from ExxonMobil (the foundation, corporation, and employees and retirees) totaled about $280 million, with $100 million going toward education. Globally, this giving totaled $50 million for higher ed, of which more than $40 million was allocated to institutions in the U.S.

        […]

        ExxonMobil also has an important funding area that it classifies as “other education,” which is dedicated to “vocational and entrepreneurial education, including courses on life skills, business development and micro-enterprise training for women in the developing world.” University and college training programs, along with initiatives related to women’s leadership, were among the main funding recipients in this category.

        At the same time, fundraisers shouldn’t be too quick to rule out its other focus areas as potential grant sources. As part of its antimalarial efforts, for example, this funder emphasizes the critical need for “new approaches and passionate, highly-trained leaders,” both of which are likely to connect in various ways to scholarly research and other work. To that end, since 2011, ExxonMobil has lent its support to “outstanding students from developing and emerging-market countries to pursue global health-focused Master’s degrees at Oxford University,” providing these individuals with “the opportunity to learn about the global burden of disease, epidemiological principles and how to apply classroom lessons to the real world,” as well as professional networking opportunities. In one recent year, over $860,000 also went toward various antimalarial initiatives at Harvard.

        […]

        Lastly, although ExxonMobil’s Environment program receives less funding compared to its education programs, several universities have received awards in recent years in this area, including six-figure sums to research and programs in biodiversity, conservation, and related areas.

        […]

        https://www.insidephilanthropy.com/grants-for-higher-education/exxonmobil-grants-for-higher-education.html

        http://corporate.exxonmobil.com/en/community/worldwide-giving/worldwide-giving-report/overview

        Notably missing: Any reference to climate change research.

        A Google of “ExxonMobil climate change research” yields page-after-page of their funding of “climate science denial”…

        While ExxonMobil pays “lip service” to the call to reduce GHG emissions, it hardly promotes CAGW alarmism:

        Does Exxon accept more recent peer-reviewed science on the need to leave fossil fuels in the ground?

        No.

        […]

        Has Tillerson questioned or denied mainstream climate science since 2006?

        Yes.

        In settings with stock analysts or other executives, Tillerson has at times reverted back to Exxon’s old narrative that cast doubt on climate science.

        At the company’s 2013 annual shareholder meeting, for instance, Tillerson said: “Notwithstanding all the advancements that have been made in gathering more data, instrumenting the planet so that we understand how climate conditions on the planet are changing, notwithstanding all that data, our ability to project with any degree of certainty the future is continuing to be very limited.

        “If you examine the temperature record of the last decade, it really hadn’t changed,” he went on, referencing a widely discredited theory by contrarian scientists that there had been a hiatus in global warming. “I know you will like to hear that as it don’t comport to some of the views of others, but last 10 years’ temperatures had been relatively flat.”

        At the 2015 annual meeting, Tillerson said it might be better to wait for better science before taking action on climate change. “What if everything we do, it turns out our models are lousy, and we don’t get the effects we predict?” he asked.

        […]

        Does Exxon still fund climate denial?

        Yes.

        In 2007, Exxon pledged in its corporate responsibility report that it would no longer contribute “to several public policy research groups whose position on climate change could divert attention from the important discussion on how the world will secure the energy required for economic growth in an environmentally responsible manner.”

        But over time, it became apparent that the company has not held to its pledge. During the last few years, reports based on Exxon’s public filings have shown that the company continues to support politicians and organizations that sow doubt about climate change and work to halt action on it. That has prompted more than 100 U.S. earth scientists to call for their prestigious professional association, the American Geophysical Union, to stop accepting funding from Exxon.

        The scientists pointed out that the company still supported, for instance, the American Enterprise Institute, whose fellow, Jonah Goldberg, falsely told Fox News in 2014 that it was “utterly fraudulent” that 97 percent of scientists actively doing research into climate change back the theory that it is driven by human activity, mostly fossil fuel use.

        Exxon still funds groups such as the National Black Chamber of Commerce (NBCC) and the American Legislative Exchange Council (ALEC) that deny climate change and lobby against action to address it.

        In recent years, many corporations, including energy companies such as BP and Shell, have dropped ALEC. Some, such as Google, have cited ALEC’s obstructionist stance on climate change, while Exxon has given $1.7 million between 1998 and 2014 and was among the top funders of the annual ALEC conference in July 2016.

        Exxon has also given $1.8 million in campaign contributions since 2007 to more than 100 members of Congress who deny climate change, such as Texas Senators Ted Cruz and John Cornyn.

        What has Exxon done to address climate change under Tillerson?

        There’s been little concrete action, beyond investing in research.

        […]

        Is Exxon’s support of a carbon tax evidence that it is serious about climate change?

        Not likely.

        […]

        The Waxman-Markey bill set its cap in line with climate change treaty negotiations intended to keep global warming below 2 degrees Celsius.

        A carbon tax, by contrast, does not set a cap on emissions, but rather sets a price to penalize carbon dioxide emissions. It also shrinks the market for coal and increases demand for cleaner-burning fuels such as natural gas, of which Exxon has huge holdings. (Waxman-Markey was full of subsidies and loopholes to help keep coal competitive.)

        Exxon’s support of a carbon tax, however, has not gone beyond rhetoric.

        […]

        “As to our advocacy around a carbon tax—I would not support putting a carbon tax in place today because I think we still have a lot of gains to be made through technology and other less intrusive policies on the economy which are showing results,” he said in a speech before The City Club of Cleveland.

        Last year, Exxon refused to sign a letter from other international oil giants, including Royal Dutch Shell and BP, that strongly urged the Paris climate negotiators to push for a global price on carbon.

        […]

        What is Exxon’s view of the Paris climate agreement?

        Since the signing of the global climate accord, the company has put out at least three statements in support of the agreement. The latest one, released on Nov. 4, 2016, called the agreement “an important step forward” and said it “supports the work of the Paris signatories, acknowledges the ambitious goals of this agreement and believes the company has a constructive role to play in developing solutions.”

        https://insideclimatenews.org/news/22122016/rex-tillerson-exxon-climate-change-secretary-state-donald-trump

        Regarding a carbon tax and Paris, ExxonMobil had accepted the fact that governments were going to regulate carbon emissions. Their support of such measures was purely to have a “seat at the table” so that they could have some influence in the process to limit the regulatory damage to their business. Coal companies also supported keeping a seat at the table for the same reason.

        “Big Coal” supported staying in the Paris climate farce…

        Some big American coal companies have advised President Donald Trump’s administration to break his promise to pull the United States out of the Paris Climate Agreement – arguing that the accord could provide their best forum for protecting their global interests.

        Remaining in the global deal to combat climate change will give U.S. negotiators a chance to advocate for coal in the future of the global energy mix, coal companies like Cloud Peak Energy Inc and Peabody Energy Corp told White House officials over the past few weeks, according to executives and a U.S. official familiar with the discussions.

        “The future is foreign markets, so the last thing you want to do if you are a coal company is to give up a U.S. seat in the international climate discussions and let the Europeans control the agenda,” said the official, who asked not to be named because he was not authorized to speak publicly on the issue.

        “They can’t afford for the most powerful advocate for fossil fuels to be away from the table,” the official said.

        Cloud Peak and Peabody officials confirmed the discussions.

        […]

        http://www.reuters.com/article/us-usa-trump-coal-idUSKBN1762YY

        For the same reason that “Big Natural Gas” supported staying in the Paris Climate Farce…

        Cheap natural gas — not tough environmental regulations — has been the leading cause of the demise of coal. Still, last month Trump tried to provide the badly struggling coal industry a boost by starting to undo Obama’s Clean Power Plan that aimed to cut carbon emissions by power utilities, one of the largest sources of greenhouse gases.
        Cheniere Energy, (LNG) a natural gas company, sent the White House a letter on Monday describing the Paris agreement in terms that would fit Trump’s America First ethos.
        The Paris accord is a “useful instrument for fostering demand for America’s energy resources and supporting the continued growth of American industry,” Cheniere wrote.

        In the face of impending government regulations, it is essential to maintain a “seat at the table.”

        However, the fact that the G-7 and G-20 have failed to put up a united front to isolate the US, it appears that a seat at the Paris table wasn’t all that important.

      • ” “Big oil” and “little oil” generally don’t even play the same game. ” Yep, a point most people just can’t wrap their heads around. I know several “little oil” and “little gas” operators in western PA and what they are doing is not even vaguely like what the majority of people think of when they think “oil company” or “gas company”. And the Evil Marcellus Shale has been very, very good to them.

    • Yes a useful concept, been around for a while… From Wikipedia…

      The phrase is generally attributed to theoretical physicist Wolfgang Pauli, who was known for his colorful objections to incorrect or sloppy thinking.[1][2] Rudolf Peierls documents an instance in which “a friend showed Pauli the paper of a young physicist which he suspected was not of great value but on which he wanted Pauli’s views. Pauli remarked sadly, ‘It is not even wrong’.”[3] This is also often quoted as “That is not only not right; it is not even wrong,” or “Das ist nicht nur nicht richtig; es ist nicht einmal falsch!” in Pauli’s native German. Peierls remarks that quite a few apocryphal stories of this kind have been circulated and mentions that he listed only the ones personally vouched for by him. He also quotes another example when Pauli replied to Lev Landau, “What you said was so confused that one could not tell whether it was nonsense or not.”[3]

      • Thanks, I needed that tutorial on “it’s not even wrong”, since I was not familiar with it nor understanding it.

        “It’s not even wrong” = “no basis to determine what it is”, … or

        “it may as well not exist”, … or

        “it’s a non entity, worthy of zero consideration”

        right ?

  9. The export market of NG will continue to rise, as we build more super tankers that can transport NG to Asia. This will drive up costs for power companies. At some point, clean coal again becomes competitive.

    • As power costs rise with natural gas price increases, so renewable energy looks like a cheaper option…

      • As power costs rise with natural gas price increases, so renewable energy looks like a cheaper option

        Yes, if the cost of every other significant source becomes 100 times more expensive. And if pigs had wings (plus a whole lot of other adaptations), they could fly. (Don’t you just love magical thinking?)

  10. No CEO in his/her right mind would approve building a new coal plant these days. In spite of ultra supercritical technology, the risk is just too great that the next administration will restore the CO2 requirements. So that means we build combined cycle units until they drive up the price of natural gas and everyone goes whoops, I wish we had some of that nasty coal….

  11. Not to mention that roughly 15% of the coal mined annually worldwide goes into producing steel. That can’t be replaced by wind, solar or natural gas.

    • Some of it can…

      https://www.ft.com/content/3600e838-9139-11e6-8df8-d3778b55a923?mhq5j=e3

      “He proposed gradually replacing its towering twin blast furnaces, which convert raw materials into molten iron, with smaller, electric-powered arc furnaces that melt down scrap. By using domestic feedstock and renewable energy, this is a model Mr Gupta believes can rejuvenate the industry.
      “The UK has the opportunity to become a major steel producer but the opportunity is in the space of ‘green steel’, which means using an abundant resource available domestically in the form of steel scrap, which is going to grow,” he explains.”

      http://www.powerengineeringint.com/articles/2017/02/hydrogen-power-project-planned-in-austria.html

      “The companies hope to use excess power generated by renewable energy sources to create hydrogen from water with electrolysis. The hydrogen can then be stored for reconversion into power or for direct industrial use, with the aim of eventually replacing coal power in the steel making process altogether. “

      • Griff:

        Both of those methods use electric furnaces to recycle scrap steel. This is already in widespread use, although the electric energy comes from conventional generation sources. New (primary) steel making requires a source of carbon, which is most commonly derived using coked coal.

        I don’t know offhand how much electrical energy is required to recycle a tonne of scrap steel, but I do know it takes 13 megawatt hours to smelt a tonne of aluminum, and all the renewable power generated in the whole world in 2014 was not enough to replace just the coal-generated portion (about 58%) of total energy used to produce 53 million metric tonnes that year. Since steel production in the same year was just under 1.6 billion tonnes, I suspect all the renewable energy generated by the whole planet from now through 2030 (when China has agreed to start reducing their CO2 emissions) would not be enough to provide for a single year’s production.

        The other problem is there is not enough scrap steel, even if you recycled 100% of it, to supply the annual demand. Steel has a relatively long life: somewhere I found figures on how long steel lasts in different uses before it becomes reclaimable, but I can’t find it now. Structural steel for buildings is 100% recyclable, but you have to wait 40-70 years to get it back. Automotive steel is recoverable in less time, but you’re still looking at 10 years or more before you get 50% of it back.

        China produces just under 50% of the world’s steel annually — more than the next 9 largest producers put together; they use coal. All the growth in steel production since 1980 has come from developing countries, especially in Asia. Below are figures for 1980 and 2016 (million tonnes):

        China: 37.1 -> 808.4
        India: 9.5 -> 95.6
        S. Korea: 8.5 -> 68.6
        Turkey: 2.5 -> 33.2
        Brazil: 15.3 -> 30.2
        Mexico: 7.1 -> 19.0

        In contrast, the developed countries have all declined:

        US: 101.4 -> 78.7
        Germany: 51.1 -> 42.1 (don’t know if this is combined East+West Germany for 1980 figure)
        Italy: 26.5 -> 23.3
        France: 23.1 -> 14.7
        UK: 11.3 -> 5.8

        The EU as a whole went from 208.0 to 162.3.

        The UK (referenced in the link to Gupta’s article) accounted for a small fraction of the world’s steel in 1980 and a much smaller fraction today. The assertion the UK could become a “major” steel producer by recycling is pretty close to pure fantasy, especially as the UK grid is running with almost no reserve at present. Perhaps in another 10 years or so they will have a fair amount of scrap steel to recycle from derelict wind turbine towers, but they’ll have to buy power from French nuclear or perhaps Norwegian hydro to do so.

      • Alan

        Gupta proposes to build the renewable energy locally via a tidal lagoon… which would produce known amounts of electricity at defined times

      • Griff:

        I found this on Electric Arc Furnace steel recycling at the ever-reliable Wikipedia:

        To produce a ton of steel in an electric arc furnace requires approximately 400 kilowatt-hours per short ton or about 440 kWh per metric tonne; the theoretical minimum amount of energy required to melt a tonne of scrap steel is 300 kWh (melting point 1520 °C/2768 °F). Therefore, a 300-tonne, 300 MVA EAF will require approximately 132 MWh of energy to melt the steel, and a “power-on time” (the time that steel is being melted with an arc) of approximately 37 minutes. Electric arc steelmaking is only economical where there is plentiful electricity, with a well-developed electrical grid. In many locations, mills operate during off-peak hours when utilities have surplus power generating capacity and the price of electricity is less.

        [emphasis added]

        If you do the math, to supply 132 MWh over 37 minutes requires input at a steady 214 MW (neglecting transformer losses). You can scale it down for smaller furnaces of course, although I assume that when everything is taken into account, the larger furnaces are more efficient.

        I can’t read the Gupta article without a subscription to the Financial Times, but I repeat: his assertion that UK could become a “major” steel producer by recycling steel is not even remotely credible.

        In 1967 the UK produced 24.4 million tonnes of steel (MToS), or 4.88% of the world total of 497.2 MToS. In 1980 that had dropped to 11.3 MToS, or 1.58% of the world total of 716.4. By 2000 the UK had surged to produce 15.16 MToS, which was 1.78% of the world total (850.1). The surge was short-lived as in 2010 the UK had fallen to produce 9.7 MToS which was a pathetic 0.69% of the world production (1,413.6). The relative decline continues as in 2015 the UK produced 10.86 MToS, or (drum roll please) 0.67% of the world total of 1,620.4 MToS. That was also a temporary surge as their 2016 production was just 7.58 MToS. For perspective, the 2015 figure puts them handily behind such industrial behemoths as Iran and Mexico. Figures are from Wikipedia again.

        To account for even 1% of world steel production, the UK would have to produce 16.2 MToS, or 8.62 more than 2016. If it takes 132 MWh to produce 300 tonnes from scrap, the increase would require 28,733 MWh of steady reliable power. Double that for “all green” steel production. I don’t consider 1% to be a “major” producer. They’d have to at least break into the top 10 to qualify for that and #10 in 2016 production was Ukraine at 24.22 MToS, slightly more than three times the UK.

        Keep in mind that if you keep one of those 300-tonne furnaces busy 100% of the time, getting 300 tonnes of steel every 37 minutes, the annual output is 300 * 60 / 37 * 24 * 265 or 4,261,621 tonnes annual output (4.26 MToS), and requiring continuous input of 214 MW. Multiply that times six to get the UK into the top 10 steel producers and I’ll agree to the “major” label.

        So: how much power does Gupta think he can get from tidal lagoons and how much will it cost to build per MW of steady output?

  12. David: Thanks for the informative article. Some comments:

    The EIA’s estimates of LCOE include a higher cost of capital for fossil fuel plants to “compensate for the risk that a carbon tax will be imposed”. And their LCOE assumes capital costs are expensed over 20 years, which is optimistic for wind and ridiculously short for coal. The average coal power plant in the US is 42 years old.

    However, the age of the average coal plant is a sign that the industry has over the past few decades (ie independent of the party controlling the EPA) has been reluctant to invest in coal. There may be two reasons:

    1) Coal produces more conventional air pollution than natural gas.

    2) If you are a lukewarmer, there are benefits to burning natural gas now and waiting to see how bad climate change will be in a few decades and whether new technology will help in the future.

    • 1) Which led to much of this:

      The Environmental Protection Agency, the Office of Surface Mining Reclamation and Enforcement (OSMRE) in the Department of the Interior, and the Mine Safety and Health Administration (MSHA) in the Department of Labor have promulgated a host of new rules that will increase the costs of mining coal, building new plants, and operating existing plants. These regulations include:

      • Cross-State Air Pollution Rule,
      • Mercury and Air Toxics Standards (Utility MACT),
      • Coal Combustion Residues (coal ash),
      • Ozone National Ambient Air Quality Standards,
      • Cooling Water Intake Structures,
      • Greenhouse Gas New Source Performance Standard,
      • New Source Review,
      • Section 404 Clean Water Permits,
      • Stream Buffer Zone Rule,
      • Proximity Detection Systems,
      • Examinations of Work Areas in Underground Coal Mines for Violations of Mandatory Health or Safety Standards,
      • Lowering Miners’ Exposure to Respirable Coal Mine Dust, and
      • Patterns of Violations.

      The consulting group ICF International estimates that 20 percent of America’s coal power plants could be retired as soon as 2020 because of the EPA’s air, waste, and water regulations.[2] The Institute for Energy Research projects that the Cross State Air Pollution “transport rule” and the Utility MACT “toxics rule” will remove more than 33 gigawatts (GW) of electricity generation—almost 10 percent of the electricity generated by coal plants—from production.[3] Several other economic analyses project that EPA regulations could take an additional 75 GWs of coal generation offline, which would significantly raise electricity bills for American consumers and threaten reliability of the electricity grid.[4]

      http://www.heritage.org/environment/report/the-assault-coal-and-american-consumers

       2) N2N (natural gas to nuclear) is the only viable “just in case” scenario:

      http://www.realclearenergy.org/charticles/2014/08/01/solar_and_wind_more_expensive_than_realized_107939.html

  13. What killed/is killing coal? The answer is plain as day. Electricity was being delivered to many millions of Americans at home for less than 10c a kwhr in the early 1990s. At 10c a kwhr coal can compete with anything. The only thing that had happened since then to increase the price has been massively increased regulation not a shortage of coal supply.We have already demonstrated on a massive scale what the true cost of electricity from coal should be.. not the bogus numbers in this article.

  14. What killed/is killing coal? The answer is plain as day. Electricity was being delivered to many millions of Americans at home for less than 10c a kwhr in the early 1990s. At 10c a kwhr coal can compete with anything. The only thing that had happened since then to increase the price has been massively increased regulation not a shortage of coal supply.We have already demonstrated on a massive scale what the true cost of electricity from coal should be.. not the bogus numbers in this article.

  15. funny – I could have told you this, and I didn’t even get paid to do a study.

    I will add – natural gas does have some value over and above the cost for construction. It is more dispatchable, and overall better at managing loads. Less air permitting and disposal issues. Natural gas allows more differing sources of energy to be successfully added to the mix – without natural gas, wind would be a non-starter for example. For that reason, many utilities would think natural gas power is still attractive even at a somewhat higher cost than coal – it has a premium value in the marketplace.

    Also, fair to point out, if Sandia’s supercritical carbon dioxide experiment is successful, in 10 years natural gas generation costs could take another very steep drop. This would increase efficiency from 33 to 50%. A one percent efficiency improvement in a power plant translates into millions of dollars because less fuel is burned to make the same amount of electricity. A one percent improvement in efficiency also reduces greenhouse gases by about 2.9 percent. Increasing efficiency to 50 percent reduces emissions by 34 percent. These are just huge changes – image using 17% less fuel, to generate the same electricity.

    For any coal or natural gas power plant, 1/3 the cost is capital, 1/3 fuel, and 1/3 interest. Dropping power plant costs also drop interest costs, meaning a natural gas power plant costs could drop in prices 20%, with 1/3 less emissions. Oh yeah, this would be a “bolt on” system – old power plants could be easily retrofitted with the new generator, leaving the boiler and everything else intact.

    This is what bugs me about environmentalists – this is a huge change and likely to rapidly cut emissions faster than every wind farm and solar panel in existence, at very low cost. every hear them mention it?

    • Also, fair to point out, if Sandia’s supercritical carbon dioxide experiment is successful, in 10 years natural gas generation costs could take another very steep drop. This would increase efficiency from 33 to 50%.

      You mean an experiment in wasting tax dollars? We already know how to run CO2 in a Brayton cycle. And CCGT is already at 50% efficiency.

  16. “market forces” Wow, yet another name for Donald Trump! And here I thought “market forces” was Barri Obama’s nickname.

  17. Nobody knows what the real price of energy of some sources due to distortions caused by government direct and indirect subsidies. Just look at what percent of Elon Musk’s revenues are attributable to government. It is the butt of jokes and the joke is on all of us.

      • ZEV credits. These are granted to automakers that sell clean cars in ZEV states. And since automakers must have a specific number of ZEV credits to sell in those states, if they are not producing enough clean cars, they can buy credits from other automakers to make up the difference. Nothing specific about Tesla here. These credits are issued to all producers of clean autos, under the same terms, and their value is paid by other automakers, not tax payers. If the other makers sold more clean cars, they would not need to purchase these ZEEV credits from others, and they would have essentially no value.

        If government is forcing automakers to purchase ZEV credits, they are imposing a tax on them. It is idiotic to say that it is paid for “by other automakers, not tax payers.” The other automakers are taxpayers.

        There is a federal (and some state) tax credit for purchase of cars with specific battery sizes. Any automaker that builds cars that have large enough batteries to qualify can participate. Some plug-in hybrids qualify for a lower credit. The battery basically has to be large enough for the car to go for a number of miles. These credits go to the purchaser of the car, not to Tesla.

        This is beyond idiotic. If a customer purchases a Tesla for $100,000, Tesla gets $100,000. The $7,500 Federal tax credit may go to the purchaser of the Tesla. But this just means that the customer paid $92,500 and taxpayers picked up the other $7,500.

        Tesla would not be in business without massive injections of corporate welfare.

        On its income statement, Tesla’s (NASDAQ:TSLA) net margin is impacted more by California’s ZEV (zero emissions vehicle) credits than almost any factor. For the most recently reported quarter – 3Q 2016 – it was plainly the single most important swing factor by far.

        Tesla reported a $22 million profit, or $0.14 per diluted share. However, Tesla recognized $139 million worth of ZEV credits, which it had accumulated over several quarters, so without it, the loss would have been $117 million – or $0.78 per basic share.

        What was the cosmetic value of being able to print a $0.14 per share profit versus having to report a $0.78 per share loss – even as many financial analysts saw through this factor’s impact? We’ll never know, of course, but the money is real: Tesla got $139 million from this government program, even if the check comes directly from the other automakers, not from a government treasury. It’s a tax-and-subsidy in everything but name.

        […]

        https://seekingalpha.com/article/4043401-teslas-projected-earnings-sensitive-zev-credits-go-away

        The more revenue Tesla generates, the more money they lose…

        https://finance.yahoo.com/quote/TSLA/financials?p=TSLA

        This is a business model which can only function with massive infusions of OPM.

    • Subsidies to the company and to its buyers and sales of credits to other makers via government mandate make all the economic difference to that company.

  18. Nobody knows what the real price of energy of some sources due to distortions caused by government direct and indirect subsidies. Just look at what percent of Elon Musk’s revenues are attributable to government. It is the butt of jokes and the joke is on all of us.

  19. Add in extremely expensive “carbon capture and storage” and behold! Coal is uneconomic. How surprising.

    Here at WUWT we have facts, facts, facts. This has made us the world’s leading climate website, but we still have profoundly expensive attacks on the source of life. Facts cannot hold a candle to emotions.

    I have an Eastern European professor friend whose English as a second language is better than an American University graduate. When I brought up the value of carbon dioxide in a discussion, he said that just as we must expel “poop,” it was necessary to get rid of carbon dioxide. The reality is that our body uses the carbon dioxide produced in metabolism as carbonic acid to maintain blood pH. You could not live one second without this factor.

    But I have a master’s in animal physiology. I know this stuff. Most people think in the crude terms used by my friend. We think of CO2 as equivalent to “poop,” at best. That is if we can tell the difference between CO2 and CO, which is the gas that kills you in a closed garage with the engine running.

    We at WUWT talk all the time about the economic devastation wrought by the econazis. But really, wouldn’t you pay that price to avoid breathing toxic poop?

    You can call CO2 PLANT food all you like, but I am not a plant. I am a mammal and a human. I want a world free of all the pesticides and other poisons used in modern agriculture. So do many others, including many of those who think the source of life is a poison.

    If we are to recovery sanity and our freedom, we have to counter hysteria with emotion of our own. There is PLENTY of emotion in this subject for me, because health and well being will INCREASE with more carbon dioxide in the atmosphere.

    We are NEVER going to win this debate with chatter about temperatures.

  20. Costs for new coal plants doubling from 2010 to 2014 makes the combination of politics and junk science scares the predominant market factor in our energy market through federal, state and municipal interference. And yet they purport to protect the consumer. No. They project their power.

      • The fact that natural gas is cheaper today doesn’t mean that it will maintain this advantage indefinitely into the future. The current oversupply of cheap gas invites inventions to take advantage of the cheap gas; cng long distance trucks, exporting of gas from the U.S. to other nations using new LNG facilities, etc. At some point the price of natural gas may increase due to market forces, which will then make coal more attractive than it is today. Also, the new Panama Canal expansion makes it easier to export American coal to Asia.

      • richard wright – so you want utility people to make decisions
        based not on what’s most affordable
        now — or, since they clearly do a detailed
        market analysis — what’s cheapest over
        the next many years, but on what mighta maybe
        could possibly come true.

        do you own shares in a coal company,
        richard?

        seriously.

      • Existing conventional coal plants, providing dispatchable full-time capable resources, cost U.S.$39.90 per MWh, 58% lower than comparable new coal plants, 63% lower than new wind generation at 2015 fuel costs and capacity factors and 72% lower than new PV solar generation at 2015 fuel costs and capacity factors.

        https://friendsofsciencecalgary.wordpress.com/2016/08/29/the-levelized-cost-of-electricity-from-existing-generation-sources/

        Existing combined cycle natural gas power plants are only slightly less expensive (~$34/MWh) with natural gas selling for ~$3.00/mcf. Natural gas can’t stay this cheap much longer… Coal can stay this cheap for hundreds of years.

        I don’t have any financial interest in the coal industry, beyond being an electricity consumer. I make my living finding oil and natural gas.

  21. Some days I can see why emails on unlimited free energy could be very lucrative. Electricity is invisible and “magic”. Between tax support, regulations, and politics, there is no reality in the costs of energy nor the effectiveness. It’s link-for-link matched by contradictory information. If we were to determine what is really the most effective, least costly energy form, I foresee centuries of trying to wade through all the contradictory data. It’s just more of the “there is no reality” world we are now living in.

  22. It’s not the price of NG alone, but the popular and mature combined cycle designs.
    A NG fired CCPP operates at an efficiency of about 60% as opposed to the 35% of straight Rankine coal power.
    In a CCPP about 10% goes up the stack, about 30% is CT electrical power, about 30% is ST electrical power, about 30% is rejected heat from the Rankine side of the cycle.
    NG fired CCPP’s are much simpler to design, approve, site and build. A CCPP produces about a third as much CO2/MWh as coal.
    About 15% or so of coal fired capacity will be retired because of age, high heat rates, AQCS costs, but the newer plants and supercritical designs will press on.

  23. I’d prefer to see the actual capital costs of the new HELE coal fired plants being built in Asia and elsewhere rather than the US EIA figures ( especially when they are figures produced during the Obama administration time).

  24. coal pollutes.
    it’s dirty and filthy and nasty.
    its an 19th century fuel,
    full of soot and toxins
    and should be eliminated
    even without any considerations
    of its terrible impact
    on the climate.

  25. Middleton, as usual in your posts, you completely miss the point. This one is a howler.

    Coal-fired power plants in the US are closing in record numbers because the US EPA finally closed the loopholes that allowed existing plants to operate without expensive pollution control devices. Coal power plant owners refuse to install the equipment and elect to close down the plants.

    By the late 1960s, the US environment became an issue and the Clean Air Act was passed in 1970. However, coal-fired power plants were exempted from most of the provisions of the CAA by various means. In practice, while other industries such as smelters, chemical plants, and refineries were required to install air pollution abatement systems, the coal-fired power plants did not. This, as it turned out, was a mistake.

    Coal-fired power plants, and nuclear power plants enjoyed substantial profits while their chief rival, natural gas, was at a high price during the decades after passage of the CAA. That was the time to spend some of the profits to install pollution reduction systems. Now, when natural gas prices are low, coal-fired plants cannot afford the pollution reduction systems. Also, the US EPA has finally closed the loopholes on coal-fired power plants and required them to reduce their air pollution. see link to “The Tragic Flaw of the Clean Air Act.” http://www.regblog.org/2016/05/17/revesz-lienke-tragic-flaw-clean-air-act/

    The response, predictably, is for the owners of the coal-fired power plants to close the plants. (Note the rapid decline in coal percentage in the graph above, from 2005-2015; from 50 percent to 38 percent) see link to SLB article “Coal Power Plant Shutdowns Ahead of Pace in 2015: Gas and Renewables Replace the Coal Power.” http://sowellslawblog.blogspot.com/2016/04/coal-power-plant-shutdowns-ahead-of.html

    • Rog,

      This was one of the two points of my post:

      Coal-fired power plants in the US are closing in record numbers because the US EPA finally closed the loopholes that allowed existing plants to operate without expensive pollution control devices. Coal power plant owners refuse to install the equipment and elect to close down the plants.

      I think you’re the first anti-coalers to get this bit right.

      🖒🖒

      • The exact same thing happened in the UK – UK coal plant owners were unwilling to pay for additional anti pollution (non-CO2 related) measures under the LCPD directive and the plants therefore had to close. Not only that, but most closed earlier than required after being run at max permitted hours for short term profit.

      • My favorite part of this meme is how EPA and the various state epa clones have responded to coal plant operators who have designed and built emissions control systems which met the standards EPA and its clones had set. They collectively refused to accept the remediation implemented by these plants, even though it met the standards THEY had set. This is a typical leftist tactic, moving the goal posts, or as it is known, the “Lucy Effect”. Leftists never accept anything that does not advance their anti-technology, anti-science and anti-American agenda.

      • Yep,

        Power plant operators spent billions to comply with steadily tightening air pollution rules…

        Only to have the rug pulled out from under them with CCS requirements. The collapse in natural gas prices was just icing on the cake. Without the dynamic regulatory goal posts, utilities could have survived a decade of low natural gas prices.

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