The G7 leaders met recently in Cornwall, England. The tin mining heritage of the region was probably lost on them, but they were able to reach an agreement on “unabated” coal-fired power. They unanimously committed to end new, direct government support for unabated, international thermal coal power generation by the end of 2021. (See World News, p 8.) That’s a big nothing burger. Unabated coal power generation refers to the use of coal without substantially reducing CO2 emissions, such as carbon capture, use and storage (CCUS). How many new, unabated thermal power plants were these governments planning to support? Most power plants are built by private companies and some receive funding from governments, but those governments didn’t have a seat at this table.
Looking at that photo of G7 leaders, who do you think is the most energy savvy? Of the countries represented, only U.S., Germany, Japan and Russia have a significant industrial base that consumes large quantities of electrical power. Two of them, Japan and Russia, understand the importance of low energy costs. Canada’s Prime Minister Justin Trudeau has already squared off against his country’s resource sector on several fronts. Germany’s Chancellor Angela Merkel recently secured supplies of Russian natural gas to stabilize a highly criticized, renewable energy program. Emmanuel Macron has no skin in the game because France is powered by emissions-free nuclear power. So, at the end of the day, they took a hardline stance against a coal strawman, but really agreed to nothing.
Meanwhile, coal production rose in the U.S. The Energy Information Administration (EIA) is reporting a 7.8% year-to-date increase in coal production. (See U.S. News, p. 6.) Readers should note that, in general, this growth is taking place across the board: Appalachia, Illinois Basin and the West. In fact, the EIA estimates 2021 U.S. coal production could reach 600 million tons by year end, which would be an 11% increase over 2020.
In this edition, Coal Age’s South African correspondent, Gavin du Venage pens a piece on the situation there. The majors, Anglo American, BHP, Glencore, South32, etc., have announced plans to exit the South African coal scene. Some have already sold operations to black-empowered companies, such as Thungela and Seriti. Those companies along with Exxaro and others believe in the indispensability of coal. Coal provides 90% of South Africa’s power, it represents their largest exported commodity, and the government understands it.
Coal consumption rises as electricity and steel demand increases. If the world transitions to battery electric vehicles as expected, the load will only increase. Instead of distancing themselves from coal, some of those leaders should consider investing in abatement programs for coal-fired power to provide clean, low-cost energy.
