Success at Home, But Trouble Abroad

by Nelson Harvey

Ever since the late 1990’s, many energy experts have been predicting a massive resurgence for “King Coal,” the dirty fossil fuel that already provides some 50 percent of U.S. energy supply. Now, it appears that their forecasts may have been tainted by delusions of grandeur: in the coal kingdom, all is not well. Ordinarily, this would be something for environmentalists to celebrate, but in this case it is not necessarily good news for the fight against global warming.

The coal industry boom was expected to result from increases in the price of oil and natural gas even as overall energy demand continued to grow. All of this happened, but so did two other things: concern about global warming grew and and construction costs rose. Now, according to the Associated Press, only 15 of the 151 coal plants announced in recent years have been built since 2002. Many utilities are reconsidering the economics of coal in light of pending carbon legislation on Capitol Hill. In the most extreme example of how climate concerns are changing the outlook for coal, the Kansas Department of Health and Environment on Thursday rejected an air permit for two new coal plants, claiming that their carbon dioxide emissions constituted a public health hazard. To back up their position, they referenced the landmark Supreme Court decision, announced in April, that the EPA could regulate carbon dioxide under the Clean Air Act.

But before we break out the bubbly over the cracks emerging in King Coal’s facade, its worth taking a second look at the rising construction costs that I referenced above. Here’s a piece from the AP article:

“… material costs and demand for skilled labor has prompted plant costs to spike 40 percent or more. Industry representatives blamed increased competition from China and other developing nations aggressively pursuing new coal plants.”

The message here is clear: China is building coal plants at a breakneck pace. In late June, that nation overtook the U.S. as the world’s largest emitter of greenhouse gases, and it seems determined to hold onto the title. Global warming is, by definition, a global problem. Right now, the world’s two biggest emitters are not formally part of an international solution. Let’s hope that changes when the international community meets in Bali this December to hash out a successor to the Kyoto Treaty.

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