The surprisingly sustainable case for coal |

The surprisingly sustainable case for coal

The following excerpt is from Peabody President and Chief Executive Officer Glenn Kellow’s presentation at CERAWeek in Houston, Texas on March 14, 2019.

Written by Lauren Glendenning
For Craig Press

Editor’s Note: This sponsored content was brought to you by Peabody

Twentymile Mine, in northwestern Routt County, provides $330 million in direct and indirect economic benefit to the region and employs 245 people.
Images courtesy of Peabody
About Peabody Energy:
  • 23 surface and underground mines in the U.S. & Australia
  • 7,400 employees
  • 7 million tons of coal sold to global electric utilities and industrial plants in 2018
  • $5.58 billion in 2018 revenues
  • $11.5 billion direct and indirect economic benefits from global operations in 2018
  • 22% improvement in Peabody’s global safety rate since 2013
  • 5,344 acres of coal mined lands restored globally in 2018

Peabody is the leading global pure-play coal company and a member of the Fortune 500, serving power and steel customers in more than 25 countries on six continents. The company offers significant scale, high-quality assets, and diversity in geography and products. Peabody is guided by seven core values: safety, customer focus, leadership, people, excellence, integrity and sustainability.

About Twentymile Mine:

  • 9 million tons of coal sold in 2018
  • $330 million in direct and indirect economic benefit
  • 245 employees

Amid a fuel that is so often miscast as a Hollywood villain, there is a surprisingly sustainable case to be made for coal.

The story of global energy is not one of good vs. evil — it is a tale of the pursuit of two goods: affordable, reliable energy and reduced emissions. Maximizing the benefits while minimizing the costs are what so many of us are about every single day.

First, the basics: The world uses some 8 billion tons of coal per year. A bit more than one out of every four units of energy in the world comes from coal.

For the first time ever in 2018, global coal-fueled generating capacity topped 2,000 gigawatts (GW). That’s a massive 62 percent increase since the year 2000 and each GW can use about 3 million tons of coal per year. Some 45 GW of new coal-fueled generation is under construction in 2019 alone, and more than 40 nations have added coal-fueled generation since 2010.

The future of coal

Within the U.S., past years of regulatory burden, financial incentives to switch fuels, and a country-specific shale play have created a secular decline, but coal still fuels more than 25 percent of electricity generation. During the peak day of the 2019 polar vortex, coal fueled 37 percent of electricity — more than any other source.

Coal is also essential to original steelmaking, which consumes a billion tonnes of coal each year, and coal provides about 70 percent of the energy to create cement. Electrification of the transportation sector is already having stunning results, with coal again returning as a major fuel of transportation in places such as China with high-speed trains and electric buses, cars and scooters.

Simply put, the world plans and needs to use coal for the foreseeable future.

Improving the industry through technology

Technology has been the proven answer and has the potential to further drive down emissions from coal.

Step one is to allow the world to access electricity, something lacked by 1 billion people, nearly 15 percent of the world’s population. Around 3 billion people rely on primitive biomass, which would be some 1,000 times cleaner using coal by electrification.

Steps can also be taken to improve emissions from existing fossil fuel generation, and the track record there is excellent through low-emissions technologies.

Since 1970, U.S. emissions from coal have been reduced 93 percent. The first step in reducing carbon emissions begins with higher efficiency. Globally, the average efficiency of coal-fueled power plants today is 35 percent. Raising that average by 5 points, to 40 percent, would reduce global emissions by 2 gigatonnes, or the equivalent of India’s annual total.

Positive steps are already being taken. In China, high-efficiency, low-emissions plants comprise 66 percent of the installed capacity. 

The final “grand prize” for advanced coal technologies comes through widespread deployment of carbon capture, use and storage (CCUS). The Intergovernmental Panel on Climate Change has said not only would the cost of achieving the 2-degree Celsius goal be 138 percent more expensive, it may well not be possible without widespread deployment of CCUS technology.

A bit more than one out of every four units of energy in the world comes from coal.
Images courtesy of Peabody

The case for coal

In reality, the world needs greater regulatory clarity around carbon dioxide storage and greater deployment of plants. The technology exists today, though it is only through learning-by-doing that we optimize project costs to deploy at scale. In addition, there are transformational technologies in the innovation pipeline that promise to reduce costs even further with continued research and development.

In the U.S., we are already seeing renewed optimism in this field with the passage of the FUTURE Act legislation, advancing the 45Q tax credit. Peabody was pleased to be part of a bi-partisan effort supporting its passage.

A world that will use coal for many decades more into the future needs sustainable coal companies more than ever. If you drive first-tier, sustainable companies from coal, then the resulting effects will be negative for multiple stakeholder groups and society as a whole.

The coal industry of course faces multiple challenges, but within those challenges exist opportunities for those of us with the wherewithal to remain financially sound, to manage well, to insist on responsible mining, and to encourage advanced technologies to continually reduce emissions.

I suspect that coal will remain viable for far longer than some would like, but for the far greater good of multiple stakeholders than many might realize. 

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