Commentary - August 25th, 2014
7:28 am
Wed August 27, 2014

Green-Washing Coal Mining And Coal Exports

The Oregon Department of State Lands recently denied a permit to Ambre Energy for its proposed coal shipping port on the Columbia River at Boardman. That proposed Morrow Pacific coal port is the smallest of the three coal ports still under consideration in the Pacific Northwest to move Powder River Basin coal from Montana and Wyoming to Asian markets.

It may seem obvious that mining more coal and sending it off to be burned is likely to increase air pollution, including greenhouse gas emissions. However, coal companies, often with the support of the federal government, have argued that at worst, exporting U.S. coal to fuel electric generators elsewhere in the world simply displaces other coal that would have been burned, leaving pollution levels largely unchanged. Some go further to argue that the export of Powder River Basin coal will actually reduce carbon and other toxic air pollutants.

One such study gained some headlines recently asserting that “exporting U.S. coal to Asia could drop greenhouse gas emissions 21 percent.”[1]  That study envisioned the Powder River Basin coal currently fueling the Boardman electric generator in Oregon and the Centralia generator in Washington, the only coal-fired generators in those two states, being exported instead to South Korea via Ambre Energy’s proposed Morrow Pacific coal port. The electricity currently being generated by those two Pacific Northwest coal-fired generators would be replaced by building two natural-gas-fueled electric generators.

This thought experiment is a bit disorienting since both Washington and Oregon have negotiated agreements that those two coal-fired generators would be retired. In addition, as was just mentioned, the Ambre Energy export terminal that was at the heart of this imagined scenario has been denied a permit by Oregon.

But setting the counter-factual character of this though experiment aside, it is easy to understand how combining these changes in electric generation in the Pacific Northwest and South Korea could lead  to lower air pollution emissions being calculated. Ceasing the burning of coal at Boardman and Centralia will obviously reduce greenhouse gas and other toxic emissions. That is why those plants are being retired. Adding an equivalent amount of natural-gas-fueled electric generation will not completely offset those pollution reductions since the combustion of natural gas is less carbon intensive and, in general, has lower levels of other toxic pollutants than the burning of coal. (This, however, assumes that the leakage of natural gas into the atmosphere from the production, shipping, and use of natural gas is quickly brought under control.)

Shipping the Powder River Basin coal all the way to South Korea will involve the burning of a lot of diesel fuel and the emission of significant amounts of pollution from trains, barges, and ocean going ships. But in this thought experiment, much of the increased air pollution associated with transporting coal to distant markets was calculated to be offset by the fact that the coal-fired electric generators in South Korea are of more recent vintage and are more efficient in their use of coal to produce electricity. As a result they are cleaner on a per kilowatt-hour produced basis.

The net result of combining all of these changes in electric generation in two countries oceans apart is an imagined reduction in greenhouse gases and other toxic air emissions. Hence the headlines asserting that exporting Powder River Basin coal would reduce air pollution and the threat of climate change.

The obvious problem with this thought experiment and its optimistic conclusion is that the changes that have been combined are not causally related to each other.  In order to export coal to South Korea, no coal-fired generators in the U.S. have to be shut down. Arch Coal, for instance, wants to develop the Otter Creek coal deposits to serve Asian markets, and other coal in the Powder River Basin is also available. There is no shortage of Powder River Basin coal.  So the shift in electric generation in the U.S. from burning coal to burning natural gas is not being triggered by the demand for coal in Asia. It has been triggered by low natural gas prices and increasing public concern about the air pollution associated with burning coal.  That has led to a decline in the burning of coal in the U.S. and more coal being left in the ground in the Powder River Basin.

Instead of artificially linking independent events in order to concoct positive environmental benefits from exporting coal, we need to focus on what opening up particular coal markets in Asia to a very large deposit of relatively low cost coal, namely the Powder River Basin, is likely to do to those markets. Powder River Basin coal can carve out a share of those Asian markets only by competing with existing coal suppliers and under-selling them. That will reduce the cost of coal-fired electric generation and encourage expanded 50-year commitments to many more coal-fired generators there.

That we know is the wrong track for the both the U.S. and the world.



[1] Press release, Duke News, Duke University, August 19, 2014. “Environmental Implications of United States Coal Exports: A comparative Life Cycle Assessment of Future Power System Scenarios,” by Barrett Bohnengel, Dalia Patiño- Echeverri and Joule Bergerson. Environmental Science & Technology, July 15, 2014. http://pubs.acs.org/doi/abs/10.1021/es5015828