October 21, 2011
Coal is Here to Stay. Really.
In case there was any doubt, coal is not going anywhere as an energy source for the foreseeable future. Today it was reported that Peabody Energy, the American coal company, is inching closer to acquiring Australia's Macarthur Coal with a $4.9 billion takeover offer (the Peabody offer is backed by Macarthur's largest shareholder).
For all the discussion of banning coal-fired plants and endless restrictions to new coal plants, those who own the resources continue to have a market. And as restrictions rise in the United States, the market internationally for coal simply expands. I admit, I prefer other fuel sources in most instances, but the reality is that coal provides relatively cheap and abundant power. "Clean coal," at least to date, is aspirational, not reality. But cleaner coal is a reality, and we can be doing more with it.
According to the Energy Information Administration, "coal-fired plants contributed 43.3 percent of the power generated in the United States. Natural gas-fired plants contributed 23.4 percent, and nuclear plants contributed 18.8 percent." Nearly half of our power comes from coal, and in many areas, a cost-effective and efficient fuel switch is not readily available. We have already learned that over reliance on natural gas can be a disaster, as that fuel's price volatility is legendary.
At some point, we need to start getting rid of the oldest coal plants offline. There shouldn't be much argument about that. (Of course, sometimes there is.) Part of that plan should be to replace the worst old plants with far better new ones. New coal-fired plants aren't clean, but they are without question cleaner.
If we're going to burn coal, we should be burning it as cleanly and efficiently as is possible. And as of today, I've got $4.9 billion more reasons why I'm sure we're going to burn it.