As the fallout from the nuclear disaster in Japan continues to worsen, many countries have announced moratoria on further nuclear power development. This is sensible. However the cynic inside me suspects that once the horror dies down, at least in the public consciousness, nuclear power plant construction will be back on the agenda.
Surprisingly (to me, anyway), green stocks have experienced a bounce as a result of Japan’s nuclear crisis. Green technologies tick a box that nuclear fails to, but – as much as it pains me to say it – I can’t see green energy being a long-term winner out of the Japanese disaster. Here’s why:
- Hydrogen has numerous problems, a critical one being the lack of a stable and functioning distribution network.
- Wind continues to face huge barriers as people can’t seem to decide if the technology is effective. There is additional resistance from those who claim that wind farms cause “visual damage” as they are unsightly.
- Sun has never been an option in the UK. I wonder why!
So, what’s left?
Coal of course. And I truly believe that it will be the long-term winner of the disaster in Japan, particularly if coal companies can credibly sell the concept of “carbon capture” to a sceptical public. It’s also cheap, plentiful and has a powerhouse of lobbyists at its disposal. Rising oil prices also tilt the balance in favour of coal – and will continue to do so if the price of oil continues to increase.
I read an illuminating interview with Fred Palmer in the Guardian recently. Fred Palmer is the senior vice-president of government relations for Peabody Energy, the largest private-sector coal company in the world. Peabody Energy shipped 246 million tons of coal in 2010, which equated to nearly $7 billion in revenues. The company claim that their coal products fuel 10 percent of all U.S. electricity generation and two percent of worldwide electricity. Fred is quite clearly pro-coal, but his argument is so succinct that even I, a green-conscious consumer, find it difficult to disagree with:
“There are billions of people on earth who don’t have any electricity at all and a couple billion people who don’t have adequate access to electricity. The thing that people don’t understand about energy is scale. You can make it with a windmill, or solar, or biomass, but you can’t do without coal. It’s just maths: more people living longer, living better. It’s not complicated. There are limited ways to deliver that scale of energy. Renewable will have an increasing role, but it will remain on the margins next to coal, oil, gas and nuclear. All recorded human history says that. Coal has grown faster in the last 10 years than everything else combined even as there’s been this massive push for ‘anything but coal.’”
So, according to Peabody Energy, the Coal vs. Green argument comes largely down to scale. Making particular reference to nuclear and oil, Fred indicates that given the price and supply scares, coal is left as the long-term energy generator of choice. He goes on to say:
“China uses coal the way the world uses oil. Last year, China did 3.5 billion tonnes of coal. When I started at Peabody 10 years ago, they were at 1.5bn tonnes. They’ve grown by [the equivalent of] two USAs in the last 10 years. I don’t think we’ll ever experience peak coal and here’s why. There’s obviously not unlimited metallurgical coal and there’s not unlimited high-quality thermal coal, but when you get to the lower ranked coal such as lignite you just need to put gas fires on them. You can either generate electricity there, or turn it into pipeline quality natural gas or liquid fuel. The Dakotas, Mississippi, Alabama, Louisiana, Texas all have large, large amounts of lignite. Or in western China and Mongolia you have lower-ranked coals. So I don’t think there’s a peak coal problem. I think Xinjiang province in the west of China where they say there’s a trillion tonnes of resources will be the new Middle East.
“Anyone who has the notion that we’re going to move away from fossil fuels just isn’t paying attention. I’m not trying to be provocative. I’m just telling you how we see it. And I want to be absolutely clear that we are in the low-carbon coal camp and we need to drive that. China could easily tell the world that they’re not going to do anything on climate. But they are not doing that. They are a major coal user.”
So there you have it, straight from the horse’s mouth. We all face a carbon future, whether we like it not. I would love to disagree with Fred Palmer, but right now I am struggling to find a comeback.
Is he right?