I’ve written before about “peak coal” — warnings that we may not have as much mine-able coal left as the industry would have us believe (See previous posts here and here Also see this excellent commentary by Coal Tattoo reader and frequent commenter Tom Rodd).
And now, today’s Wall Street Journal includes an article (Subscription required) that highlights this problem:
While there is almost certainly as much coal in the ground as … [the] Energy Information Administration believes, relatively little of it can be profitably extracted. Last year, the U.S. Geological Survey completed an extensive analysis of Wyoming’s Gillette coal field, the nation’s largest and most productive, and determined that less than 6% of the coal in its biggest beds could be mined profitably, even at prices higher than today’s.
And just read this quote from Brenda Pierce, head of the USGS team that conducted that landmark study:
We really can’t say we’re the Saudi Arabia of coal anymore.
The article goes on to say:
No one says the U.S. is facing a coal shortage. But the emerging ranks of “peak coal” theorists argue that current production levels may be unsustainable and, if anything, create a false sense of security.
In the field, challenges are becoming more apparent. Mining companies report they have to dig deeper and move more earth to extract coal from aging mines, driving up costs. Utilities have grown skittish about whether suppliers can ship promised coal on time. American Electric Power Co., the nation’s biggest coal buyer, says it has stepped up its due diligence to make sure its suppliers can make deliveries after some firms missed shipments last fall. It even bought a mine to lock down supplies.
“We are very much concerned, and it’s getting worse,” said Tim Light, senior vice president for AEP.
The story notes that some coal industry advocates aren’t buying the concerns, or think they’re greatly overblown:
Coal is down but hardly out. It remains the electric-power industry’s dominant fuel. Emerging “clean coal” technology could help improve coal’s environmental profile. And coal remains an energy ace in the hole, available to substitute for other fuels if shipments are disrupted.
Some in the coal industry believe concerns about future supplies are overblown. Coal advocates argue that improved technology could increase the amount of coal that can be extracted profitably. Coal “is certain to remain an enormously competitive energy resource by virtually any conceivable measure,” says Kim Link, spokeswoman for Arch Coal Inc., which produced about 12% of the nation’s coal last year.
The WSJ article reminded me of comments a few months back from Congressman Nick J. Rahall of West Virginia (who oddly enough recently dissed the idea of green jobs):
Rahall said the stateâ€™s most productive coal seams likely will be exhausted in 20 years. And while coal will remain an important part of the economy, the state should emphasize green job development. That, he said, is especially important as pressure against mountaintop mining increases.
Rahall said the pressure is coming from both Republicans and Democrats. During the 2008 presidential race, Republican nominee John McCain came out in favor of ending mountaintop mining.
â€œItâ€™s something thatâ€™s evolving over time in our industry and the responsible segment of our industry realizes that,â€ he said.