Speech to the World Coal Association
Below you fill find my speech to the world Coal Association, delivered to their annual general meeting in Brussels on the 16th of November 2015. In it, I make 2 asks of the coal industry - firstly, in short term, no new coal fired power station that does not run at 40% efficiency; and second, in the medium term, no new unabated coal fired power station should be built.
Ladies and Gentlemen thank you for inviting me here today.
I am a geology graduate of the University of St Andrews. A lesser known piece of trivia concerning Scotland’s oldest University, founded back in 1410 or 1413 (the dubiety rests with the fact that the bishop applied to the wrong Pope), is that the university rests atop a seem of coal. Only a foot or so at its thickest point, you can see the coal outcrop along the cliffs. Any thicker and the medieval centre of St Andrews would today look quite different.
A lump of St Andrews coal that tumbled from the cliffs and was washed clean by the tides of time.
The church was one of the ‘early adopters’ of coal. Just round the coast from St Andrews you come to Culross, which sits a-crest the great Fife Coal Beds. In the 19th century those coal beds would employ five thousand people and produce eight and a half thousand tonnes of coal a year. However, before the deep shafts were sunk, it was the monks of the local Abbey who hewed the coal, all to fuel the local salt panning industry.
The dip of the coal takes the seems below the Forth, and inevitably the challenges of mining further and further into the Forth took its toll and the monks abandoned their endeavours. The story of Scotland’s coal could have ended there had it not been for an entrepreneur by the name of George Bruce. Leasing the rights from the church, George invented a bucket and chain device driven by horses that continually drained the water from the ever deeper mines, channelling it back into the sea.
George Bruce’s success brought the King, James the Sixth (or James the First if you are of an English persuasion) to Culross to witness the marvel of the age. There shortly followed a knighthood for George and a tax for the industry.
By 1750 coal was being mined at seven hundred thousand tonnes a year in Scotland. By 1830 3 million tonnes were being carved from the ground. Production peaked in 1914 at 42 million tonnes per year.
And today, following a narrative you in this room are all too familiar with, just 2 million tonnes per year are extracted from an ever declining base of production.
Coupling of growth and emissions
Just over the water from Fife lies the city of Edinburgh, or ‘auld reekie’ as it is affectionately known. The city gained its nickname during the eighteenth century’s industrial revolution, when the smoke from the coal fires mingled with Edinburgh’s famous cold winter air and hung in a haze of black.
It was back then, with invention of James Watts’s steam engine and later the steam locomotive that centuries of agrarian society came to an end, mass urbanisation took place, and with it too the rise of economic prosperity in the West. It was because of coal that the intrinsic link between economic growth and emissions was first established.
The only retardant to this unstoppable revolution was the quality of air. As the factories churned in Edinburgh and Glasgow the buildings blackened. The London pea-souper became a common sight. Until, in 1952, following a four day fog which claimed the lives of four thousand Londoners, the government was forced to act. Shortly thereafter the Clean Air Act was introduced, the first serious piece of emissions reduction legislation after centuries of unfettered coal burning.
Decoupling of growth and emissions
The challenge for the globe today is breaking the link between economic growth and emissions.
For some this test is easier than others. Take two examples: China and India.
China, ahead of it’s curve, has promised to peak coal use by 2030. Last year, the growth in China’s coal consumption screeched to a halt as it’s industries grew more efficient and switched to Hydro power, and the Chinese Government pledged to build one new nuclear power station every month for the next twenty years. Some feats truly are the preserve of authoritarian superpowers.
But with the smog stretching from Beijing as far as California, and emissions twenty times the World Health Organisation limit for inner cities, Beijing has recognised that it cannot seek to sustain its economic growth using unabated coal. Just last week, President Hollande garnered an important but overlooked commitment from the Chinese Premier Xi Zinping - that China would no longer link its climate change reduction targets to its economic growth.
India, on the other hand, trails behind. As China diversified, India’s consumption of coal grew by 11% in just one year. The reason for this is that India intends to drive growth (and in the by-going reduce poverty) at all costs. India has the world’s 5th largest coal reserve and aims to double its coal production by 2020 and in so doing drive up GDP by 8-10% a year.
As China committed to peak its coal use by 2030, Prime Minister Modi has made his political priority to elevate India’s economy to the third largest in the world by the same date. Why? Because of the richest 10% of Indians, a third live in households with no refrigerator. In the next richest 10%, less than half have refrigerators, and in the next 10% only a third. The point being, when you need to win elections, you win the by making people richer. Its the economy, stupid.
‘Tomorrow and tomorrow and tomorrow’
So much for history. What about tomorrow?
There is plenty of coal left in the ground. With proven reserves of 891 billion tonnes there is enough coal to meet global production needs for the next century.
I have written on the issue of reserves versus realisation, focusing upon Botswana, where there is up to 200 billion tonnes of ‘unproven’ coal that the Government is desperate to extract. In a land in which over half its population has no electricity at all it is easy to see why the motto of its Ministry of Energy is: the future is coal.
But burning 200 billion tonnes of coal is enough to reach three quarters of the earth’s carbon limit. 891 billion tonnes is enough to reach three times over. And so the question for countries such as Botswana, which seeks to develop an impoverished society, to build and power the schools, the factories the hospitals and homes it needs, is how to do so while managing emissions and protecting human health.
And so, to Europe
We have rehearsed where China and where India stand. We Understand the aspirations of Botswana. The issue now is the western democracies, who have reaped the benefits of coal over two centuries. How stands the US, how stands the EU?
The sustained and continued decarbonisation of Europe and the US is not driven by efficiency in industry, nor is it driven by mitigation through technologies such as CCS. It is, at its most rudimental, an informed public expressing an informed opinion. What Western democracies have vis a vis India, Botswana and to a certain extent China is that we have gone through our cycle of industrialisation and we have come out of it bloody nosed. As a consequence, so too has coal.
In the US, Obama’s ‘gas bridge’ has driven down the price of coal, reduced emissions, and allowed US a climate change leadership role.
In Europe the drive towards green has inspired an ‘energy revolution’ in Germany, led to the closure of Scotland’s last ever coal fired power station; and has seen Europe’s second largest power station, Drax, begin its transition from coal to biomass.
The view from the towers of Brussels is unequivocal.
Even though the German ‘energiewende’ has failed to reduce emissions by placing too much faith in intermittent renewables; despite green subsidies exceeding a hundred billion euros a year; regardless of the fact that fuel poverty in Scotland has risen to 39%; and although we now displace our carbon footprint by importing renewables from the USA.
In spite of all of this, Brussels’ relentless rejection of coal is unwavering.
So, the reason you are here. What is the future for coal?
The answer is simply that in the long term, there is no future.
Bold statement. Big statement. But it requires qualification - when does the future start?
We are but weeks away from the Paris climate talks, where it is hoped if not expected that the world will agree a globally binding deal to keep the earth from warming beyond two degrees centigrade. With that ask comes an imperative for the coal industry, iterated to this forum by the chair of the UNFCCC (UN Framework Convention on Climate Change) Christiana Figueres last year - coal can and must change.
In order to maximise the lifespan of your industry in China, in India, in Botswana and in expanding markets across the world I believe you need to make two major commitments.
Firstly, in the short term, the coal industry must commit to building no new coal fired power stations that run at less than 40% efficiency.
For every one percent increase in the efficiency of a coal fired power station, the emissions of that plant are reduced by two to three percent. Moving the average global efficiency of coal fired power plants from 33% to 40% could cut two gigatonnes of CO2 from the atmosphere now - the equivalent of India’s annual output of CO2 emissions, or running the Emissions Trading System for 53 years.
Secondly, in the medium term, that there can be no new investment in unabated coal.
The Boundary Dam power station in Saskatchewan, Canada is the world’s first coal fired power station fitted with CCS. It captures 90% of the emissions it produces, meaning Boundary Dam emits four times less than the average gas fired power station.
These are serious asks. They will require serious money. But they are essential if your industry is to have a future at all.
With these commitments you open up the possibility of European Investment Bank funding for investment in CCS, of support from the Emissions Trading System through the modernisation and innovation funds, and to benefit from European research funding for new technology.
Without these commitments, you risk further annihilation at the hands of punitive legislation such as the large combustion plants directive, which has given coal plants in Europe the choice to either clean up, or shut up.
With these commitments you can fill the gap that renewables leave when the wind doesn’t blow and the sun doesn’t shine while keeping emissions low. You can reduce fuel poverty and stabilise our energy supply.
Without these commitments, you risk the political dash for gas, rendering coal investment worthless.
With these commitments, you can show the world that you have heeded the warnings of history that are forever etched upon the buildings of Edinburgh and Glasgow, and that are visible today in the smog that engulfs Beijing. Without them you will succumb to what the past has always taught us, a lesson that is most vociferously rehearsed here in Brussels:
At the end of the day, the cost of coal in human lives is immeasurably more than the value of coal in cheap and plentiful energy.
The choice ladies and gentlemen, is entirely yours to make.