As COP26 drew to a close, the great and the good who converged on Glasgow, Scotland, appeared relatively united in rhetoric, if not in enforceable commitments.
Their views have been clear. For the world to slow human-caused global warming, fossil fuels—particularly coal—must largely, and quickly, be abandoned. The final language in the COP26 decision text “calls upon Parties … to accelerat[e] the phase-out of unabated coal and of inefficient subsidies for fossil fuels.”
By the time the Glasgow Climate Pact was approved, the leaders of more than 40 countries, along with the governors of Hawaii and Oregon, had already signed the “Global Coal to Clean Power Transition Statement,” which commits parties “to rapidly scale up technologies and policies in this decade to achieve a transition away from unabated coal power generation in the 2030s (or as soon as possible thereafter) for major economies and in the 2040s (or as soon as possible thereafter) globally.”
In his remarks to COP26, Chinese leader Xi Jinping, praised by Kerry for pledging to cease funding coal projects outside China, touted the Chinese Communist Party’s (CCP) recent directives on peaking carbon emissions, which vowed that “coal consumption will be reduced at an accelerated pace” as part of the country’s 14th and 15th Five-Year Plans.
It isn’t clear if anyone has asked Little Amal, the gigantic puppet of a Syrian refugee who took to the stage in Glasgow to deliver seeds signifying the future climate work to be done, what she thinks about Old King Coal. But with influential friends such as The New York Times and Bill McKibben’s 350.org, it’s hard to imagine Amal being made to show anything like approval.
For self-appointed climate changers, coal is an easy target. It produces more carbon dioxide emissions than natural gas, diesel, gasoline, or propane.
Additionally, although smokestack scrubbers can remove much of the sulfur dioxide and other pollutants in coal plant exhaust, such technologies aren’t used everywhere.
Coal mining also produces methane, another greenhouse gas, and can harm rivers, mountaintops, and other ecosystems.
The problems with coal and other fossil fuels are even easier to emphasize when the environmental harms of solar, wind, and other renewables are minimized or ignored.
Yet as winter approaches amid worldwide energy woes, one-sided rhetoric on coal is giving way to cold, hard reality. A crisis of not enough coal being available to meet the world’s needs may be in the offing.
Coal in Short Supply
Multiple U.S. coal producers have reportedly sold out of coal through the next year, with some reporting they have sold out or nearly sold out through 2023.
Additionally, statistics from the U.S. Energy Information Administration (EIA) show that U.S. coal stockpiles have rapidly dwindled, falling to just under 49 million tons in August from roughly 100 million tons in November 2009.
Coal prices have risen dramatically in recent months, swinging to a high of almost $270 per ton before falling to about $150 per ton in recent weeks—still 88 percent higher than at the beginning of 2021, according to reporting by the website Trading Economics on international benchmark prices.
On Nov. 15, Bloomberg reported that U.S. coal prices have reached highs last seen in 2009.
In India, rolling power cuts have been blamed on coal shortages. Perhaps unsurprisingly, India has moved to increase its coal stocks, raising skepticism about Prime Minister Narendra Modi’s pledge to COP26 delegates that India would move toward non-fossil fuel energies to hit net zero by 2070.
Out of the almost 200 coal plants currently being built in Asia, 28 are in India.
One unidentified senior official with India’s Tamil Nadu Generation and Distribution Corp. told Reuters, “You can have the cake of coal and the icing of solar”—a reflection, perhaps, of widespread yet unspeakable thinking among many energy bureaucrats, particularly in the developing world.
China also has dealt with power shortages that are tied to its coal supply, although in its case, the proximate causes may also include Beijing’s decision to ban coal from Australia over the country’s push to investigate the origins of COVID-19 and the CCP virus.
Scrutinized carefully, a joint declaration from the United States and China on Nov. 10 is as politically delicate as one might expect. It reads, in part, “China will phase down coal consumption during the 15th Five-Year Plan and make best efforts to accelerate this work.”
The language seems markedly softer than the CCP’s directive that “coal consumption will be reduced at an accelerated pace,” perhaps leaving China the wiggle room it needs to keep building coal plants at home, while signaling its green bona fides to the West.
Europe, too, has been affected, as coal prices there have also increased.
Higher energy prices are expected to make basics such as gas and electricity unaffordable for more European households this winter, prompting the European Union (EU) to ask its members to subsidize relief funding for consumers.
Hungarian Prime Minister Viktor Orban blamed rising prices on the EU Commission’s “Green Deal,” according to The Associated Press.
Meanwhile, Switzerland has cautioned its industries that they may be forced to cut energy use in the coming winter due to the risk of blackouts.
Last-minute revisions to the COP26 decision text also seem to reflect the political calculations related to coal. While the first draft called upon parties to “accelerate the phasing-out of coal and subsidies for fossil fuels,” its final draft speaks instead of “unabated coal” and “inefficient subsidies.”
Though a coal-free future may match the long-range ambitions of many COP26 attendees, present shortages of the commodity seem to be touching off and magnifying an energy crisis felt around the world.
If a coal crisis is coming, what exactly is causing it?
Natural Gas, Renewables, and Ripple Effects
One driver is rising natural gas prices.
Henry Hub natural gas spot prices have reached highs not seen since 2014, with gas futures surging as well.
In an October report on those sky-high prices, Anne-Sophie Corbeau, an energy researcher at Columbia University, argued that unexpectedly strong natural gas demand in Asia and Latin America and declining production in the United States and other countries have all helped deplete natural gas stocks in Europe.
Corbeau and other analysts have noted that there has been a switch from natural gas to coal around the world. Yet coal shortages and the decommissioning of coal-fired plants in Europe have constrained the extent of such switching.
The Biden administration’s Environmental Protection Agency (EPA) has also moved to develop new rules limiting carbon emissions from coal-fired plants.
In recent weeks, the EPA has signaled its intentions to continue that rulemaking, despite the potential for the Supreme Court to overturn its authority in this area after agreeing to hear West Virginia v. EPA, a challenge to a D.C. Circuit Court decision striking down a Trump-era power rule.
Although coal-fired electricity generation is projected to increase in the United States this year, that rise comes on the heels of several years of steady decline in coal-fired electricity generation since 2014, according to EIA statistics.
Further, and as noted previously, U.S. coal reserves have been roughly halved in the past dozen years.
Lackluster results from some renewables have also influenced the demand for coal.
Coal power dominated wind power on the German grid in 2021, with turbines underperforming in a pattern blamed on low wind speeds.
The problems with wind power could go beyond recent temporary weather patterns. A recent study of wind turbines in the United States shows that performance fell after 10 years, which is the point at which turbines lose eligibility for production tax credits.
Researchers have also found that solar power assets are significantly underperforming. A report from the solar risk assessment firm kWh Analytics concluded “project underperformance continues to worsen” in solar, citing “higher-than-expected degradation, terrain mis-modeling, and bankrupt manufacturers” as chief causes of the trend.
Some analysts take issue with a focus on renewables. In a statement, the International Energy Agency (IEA) has responded to energy commodity prices by saying it is “inaccurate and misleading to lay the responsibility at the door of the clean energy transition.” Yet that statement cites “lower-than-usual availability of wind energy” as one factor behind the sharp increase in European natural gas prices.
Issues with coal, natural gas, and renewables could have a range of other knock-on effects.
Among the most serious is a shortage of nitrogen-based fertilizers, which are produced using natural gas. Production cuts or shortages have already occurred in the United States, India, Europe, and other countries, creating the real potential for reduced global crop yields in the coming months or years.
The coal shortage in China has reduced exports of other goods produced directly with coal, such as urea, which Indian farmers rely on as a fertilizer.
China’s power crisis has also triggered a magnesium shortage for Europe’s automotive, electronics, and aircraft manufacturing sectors. The continent reportedly imports 95 percent of its magnesium from China.
The ripple effects of an energy crisis ultimately extend much further. Since virtually every sector of the global economy depends on energy, costlier energy can be expected to affect virtually every industry and, by extension, consumers.
“If you’re an advertising exec or an environmental advocate or a lawyer, your utility bill going up 30 or 40 percent doesn’t impact your lifestyle. If you’re a single mom working on a farm or working at Walmart, the price of energy massively impacts your life,” Chris Wright, an executive with the fracking firm Liberty Oilfield Services, told The Epoch Times.
Politics and (Coal) Power
Some commentators assert that national and global political wrangling is at the root of current coal shortages, most notably in the case of China.
Chen Weidong, formerly the China Institute of Energy Economics’ chief energy researcher, reportedly told a virtual forum that the country’s coal shortage was “a man-made crisis,” caused by caps on domestic mining that were set with the aim of reaching carbon emissions targets.
Tao Guangyuan of the Sino-German Renewable Energy Centre told the same forum that China underproduced coal in early 2021 based on a benchmark from the 2020 pandemic year. He claimed that limits on coal production were already having clear negative effects during early 2021, but that “no one dared to say it.”
Taiwanese economist Wu Jialong told The Epoch Times that Beijing’s power cuts were part of a quid-pro-quo deal with the United States to decrease carbon emissions in exchange for the release of Meng Wanzhou, the daughter of the founder of Huawei as well as the company’s finance chief.
As recently as April, S&P Global Platts claimed that China’s capping of coal consumption was “deemed easy to meet” alongside other goals.
Months later, faced with domestic power shortages, Chinese buyers were reportedly prepared to purchase coal at “any price,” according to Al Jazeera.
“The whole world is in doubt because they reopened quite a number of coal mines due to increasing electricity consumption,” Huang Shicong, a financial analyst, told The Epoch Times. “It shows that what they’ve done so far is a total failure.”
In other countries, the political reaction against nuclear power, which picked up steam after the 2011 Fukushima disaster, has magnified vulnerability to fossil fuel shortages.
Germany, which has rapidly decreased the share of nuclear in its grid since 2011, joined four other EU countries in pushing back against the inclusion of nuclear power as a sustainable power source in the EU’s green taxonomy.
Like the United States, Germany has reduced its reliance on coal power and has pledged to close all of its remaining coal-fired power plants by 2038. The country has also rapidly scaled down its natural gas production, despite remaining the EU’s largest natural gas consumer.
Germany’s growing reliance on natural gas from Russia has become a geopolitical flashpoint. The Nord Stream 2 pipeline, which will send Russian natural gas directly to Germany via the Baltic Sea, was completed in September despite opposition from the United States and Ukraine.
On Nov. 16, Germany halted the pipeline’s certification, spurring an increase in European natural gas prices.
Just days ago, Belarusian President Alexander Lukashenko reportedly threatened to cut off natural gas supplies to the EU after it threatened to sanction Belarus over its allowing migrants to attempt to cross into the EU across Belarus’s western border.
Is a Crisis Inevitable?
Can a coal crisis be averted?
To the extent that a crisis is the result of deliberate policy, pro-coal policies such as India’s may help alleviate it.
Policies incentivizing safe, efficient, and less carbon-intensive alternatives to coal, including natural gas and nuclear power, could also go a long way toward powering the world while limiting greenhouse gas emissions.
COP26’s softening language on coal suggests that, in the medium or long term, pragmatic accommodation of that fuel may win out, at least in India, China, Russia, and other countries not beholden to 2050 net-zero commitments.
In the United States, the outcome of West Virginia v. EPA could significantly affect the viability of domestic coal-fired power plants. While Kerry and other Democrats have signaled their opposition to the fuel, the outsized U.S. coal emissions per capita, centrist Sen. Joe Manchin’s (D-W.Va.) influence on energy policy, and the possibility of a Republican takeover of Congress in 2022, all suggest it may be too early to count out coal.
Yet, in the short term, businesses and consumers may feel the squeeze as temperatures fall.
Corbeau, of Columbia University, noted in her report that there is “no magic switch to increase wind and solar generation on demand.”
“It could also be a good time for governments looking to reduce demand to raise citizens’ awareness of measures that can cut electricity and gas consumption,” she later added—words that, intentionally or otherwise, recall the energy crisis-wracked presidency of “The Sweater Man,” Jimmy Carter.
‘A Man-Made Crisis’
The claim that China’s recent blackouts were man-made may leave Westerners feeling a little too comfortable.
With 20th-century history as our guide, it’s easy for us to see how central planning and international tensions can combine to yield inefficiencies, shortages, and, at the extremes, avoidable suffering and death. Surely Europe and the United States are too open, too affluent, and too pluralistic to let that happen.
Yet Western leaders’ sweeping rhetoric on coal at COP26—exemplified by Kerry’s declaration that the United States will be coal-free by 2030—should leave any such observers uneasy about the West’s resistance to self-inflicted energy austerity.
Of course, the rhetoric at COP26 and similar climate summits doesn’t always translate into action, especially given the lack of strong enforcement mechanisms under Article 15 of the Paris Agreement.
Top-down green policies, even if well-intentioned, will affect the complex interplay among coal, natural gas, and renewable energy, creating economic and geopolitical ripple effects galore. While some, like a switch to or from natural gas, are predictable, others can barely be foreseen.
In today’s media landscape, the term “coal crisis” must be made to evoke a few expected and enduring images: a missing mountaintop in Appalachia; a melting glacier in the Arctic; a young activist; or a literal puppet, castigating the nations of the world for their failure to move fast enough against slowly rising temperatures and an ever-changing climate.
The victims of our coming coal crisis may remain invisible in much of the media: the unemployed American miner, no longer able to make a living in the place he calls home; across the Atlantic, the French retiree, turning down his thermostat as he bundles up against the encroaching frost; thousands of miles to the southeast, the rural Indian farmer, unable to feed his family because fertilizer suddenly became too expensive.
We ignore them at our peril.