Coal. The Next Big Tobacco?
The fossil-fuel industry hopes to avoid the legal mistakes made by Big Tobacco in the 1990s. Will that be enough to ensure their survival?
Coal, long the most dominant generator of electricity in the United States, and the companies which mine this fossil fuel are under attack by regulators both nationally and globally [1]. The fulminations of politicians and journalists are not without merit though; the burning of coal is linked to thousands of premature deaths in the United States and millions of people worldwide [2]. Despite these stark facts, coal continues to supply 29% of the world’s energy supply, indeed even growing from 26% in 1971 [3]. As consumers of this fossil fuel energy, how do we reconcile our addiction to electricity generated from coal with the deleterious contribution that coal-burning makes to green house gas generation and air pollution?
Intriguingly, the conflict between a deeply entrenched product and its dangerous side effects is paradigmatic in the United States. One only needs to consider the sales of cigarettes. Many of the attacks launched at Big Tobacco in the 1990s are being repeated for coal in the present era. In this regard, anti-coal advocates seek to diminish social acceptability of coal and to ramp up costs and cut profits via massive increases in regulation. Indeed the Climate Accountability Institute along with the Union of Concerned Scientists held a workshop that sought to compare the evolution of public attitudes and legal strategies related to tobacco control with those related to anthropogenic climate change [4].
One of the major coal miners in the USA is Cloud Peak Energy, Inc. This 1,700 employee company supplies about 4 percent of U.S. electricity, which roughly constitutes 15 million homes [5]. Richard Reavey, vice president of public affairs of Cloud Peak Energy, intends to avoid the mistakes made by Big Tobacco decades prior [6]. Rather than debating whether climate change is occurring, he instead advocates talking to critics of the industry about addressing greenhouse gas emissions and energy use [7]. To this end, Cloud Peak Energy is focused on carbon capture and sequestration rather than climate change skepticism. In 2014, Cloud Peak Energy joined the National Carbon Capture Center (NCCC) partnership, which brought together the U.S. Department of Energy, major utilities, and academic stakeholders. The goal of the NCCC is to develop cost-effective CO2 capture technologies that support the continued use of coal for power generation [8].
Despite significant public and private investment in “clean coal,” results remain elusive as exemplified by the Kemper Project in Mississippi. This groundbreaking new electricity plant employs gasification and carbon capture technologies at a meaningful scale; however, the project is greater than two years behind schedule, and its cost has more than doubled to $6.9 billion from its original estimate [9,10]. Considered to be a central part of the Obama administration’s climate plan, these setbacks impart skepticism to the notion of clean coal.
At any rate, coal still produces 32% of electricity in the USA today, and does not show signs of dramatically slowing down within the next 10-20 years. Cloud Peak Energy could very well benefit from lobbying that some of today’s wind and solar power subsidies be reassigned for the development of carbon capture, use and storage (CCUS) technology and plants. Cloud Peak Energy could also position themselves wisely by saddling up next to Hillary Clinton, likely the next President of the USA. Currently, her platform for revitalizing coal communities centers around building new infrastructure and repurposing mine lands and power plant sites [11]. What if instead, effective CCUS technology could eventually be brought to market? Would it not make more sense to upgrade the existing factories, rather than completely wipe clean the histories of families who’ve been working in these mines for generations? Only time will tell if Cloud Peak Energy can operate unscathed in an enemy-filled environment long enough to ascertain if truly clean coal can be achieved.
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[1] https://www.eia.gov/coal/
[2] “Climate Change Indicators in the United States, 2014,” U.S. EPA, 3rd Ed., 2014. p 73.
[3] International Energy Agency, “Key World Energy Trends. Excerpt from: World Energy Balances”
[4] http://www.climateaccountability.org/pdf/Climate%20Accountability%20Rpt%20Oct12.pdf
[5] http://billingsgazette.com/business/features/cloud-peak-taking-more-active-role-in-coal-debate-we/article_1ff6d6bf-8eb2-571c-bcf0-0be4ef7bd736.html
[6] Presentation: Survival is Victory: Lessons from the Tobacco Wars. The 111th RMCMI Convention & Annual Meeting, Snowmass June 28 – 30 2015
[7] https://www.scientificamerican.com/article/coal-executive-says-his-industry-must-confront-climate-change/
[8] https://www.netl.doe.gov/research/coal/carbon-capture/post-combustion/nccc
[9] https://www.theguardian.com/environment/2014/mar/12/kemper-us-power-plant-coal-carbon
[10] https://mississippitoday.org/2016/10/10/the-kemper-plant-is-99-percent-complete-what-happens-next/
[11] https://www.hillaryclinton.com/briefing/factsheets/2015/11/12/clinton-plan-to-revitalize-coal-communities/
Your post does a great job of outlining the fraught political challenges surrounding this issue in the US. In particular, your comparison to the tobacco industry’s treatment highlights how climate change activists typically adopt an adversarial tone to attack the coal industry; as the coal industry fights back with climate change denialism, the communities who depend economically on the mines for jobs are caught in the middle and stand to lose the most from anti-coal legislation. Hillary Clinton’s positive proposals to support job and infrastructure transitions in these towns have received very little attention in this year’s campaign (as has any discussion of the environment and climate change more broadly). This seems to leave an opening where private sector players like Cloud Peak could present more of a positive narrative for how these communities could attract new jobs in CCUS or in other green industries as the economy in these regions of the US change. As we discussed in the US election marketing case, however, it’s clear that a fear-based marketing message has galvanized coal communities around opposition to climate change policy much more effectively than a positive message for change has. This will likely continue to create an even greater challenge for forward-thinking companies like Cloud Peak who hope to work with the next administration on transition strategies, regardless of the outcome of the election.
Businesses don’t survive by clinging desperately to outdated technology. Whether carbon capture ever works or not, we are moving away from coal. The energy companies that depend on it and their employees should look to the future and figure out what new opportunities are available. If they cannot innovate, they will find themselves in the same position as all those cigarette manufacturers: shadows of their former selves selling a product society has grown to detest. If they push forward, they may find that they can preserve their culture, values, and history, but grow in ways they could hardly have imagined, as Apple did.
Alex, you’ve heard the canary in the coal mine! There is certainly a crisis in this industry and, even though she did vote to bail out the banks during the financial crisis, I am not even sure Hillary Clinton can prop this industry up long-term. I think getting coal energy down to carbon neutral will be next to impossible in the time that it will take other clean tech to become more economically viable than coal.
Another area that I think would be interesting to explore is if the coal industry will be able to overcome its long-term Coal workers’ pneumoconiosis (CWP), also known as black lung disease, liabilities. CWP killed 25,000 people in 2013 (Wikipedia) and I find it hard to believe that the market would, ceteris paribus, prefer an industry that killed tens of thousands of people annually over one that is much safer.
Thanks for the comment Sam, and for introducing the latin phrase ‘ceteris paribus’ to me. I agree that there are serious, undiscussed concerns about the coal industry ‘avada kedavra’-ing thousands of it’s employees a year.
Alex – thanks for highlighting Cloud Peak as a potential innovator in the Coal industry by trying to push for clean coal. My grandfather owned a coal mine and was subsequently a mine inspector for years. Anecdotally, he would tell us stories about how much the industry was struggling to stay afloat given the large tolls coal mining takes on the environment and health of workers. Many of the towns in the surrounding areas that used to be bustling are now empty and struggling economically. Just in 2015, coal production in the US dropped 10.3%. Similar to DK, I therefore wonder if this investment into clean coal is worth the time and money. It seems that even the one large Kemper project is having trouble proving out the concept to be applied on a larger scale. With so much focus on renewable energy, do you think that coal is in a place to remain a viable energy source in years to come?
The challenges that Cloud Peak Energy face highlight the inherent difficulties in engaging with carbon capture and sequestration. While I do see DK’s point that the world needs to move to clean energy, I do appreciate a more practical approach that really takes into account the realities that we face here and now. And at the moment, the fact is a third of all the energy produced in the country comes from coal, and it’s unrealistic to assume that we can very quickly reduce this to 0%. People will continue to burn coal over the next coming decades, so there is underlying value in trying to limit the harm that the coal generates.
That said, while reading the CPE example, I thought a bit about the costs involved in sequestration, and whether there were actual sustainable benefits that could be generated. It seems the jury is still out (see https://www.sciencedaily.com/releases/2010/06/100627155110.htm), but I’d definitely hope to see more investments in the future. Realistically, the only way sequestration would work at a large scale if there’s very thorough regulation that forces all coal companies to engage in the practice – in which case the cost of renewable energy may look a lot more attractive. But this I suspect is continually stymied by the coal lobby in Washington.