Fueling the Future with 21st Century Coal

By Gregory H. Boyce
Chairman and Chief Executive Officer, Peabody Energy

For 16 years Thabo Molubi’s productive day finished when the sun set. Without access to electricity, this South African furniture maker carved out a meager living with his hands. Then, an electrical line reached his village in the veld—and everything changed. He installed lights, power saws, and drills. He quadrupled productivity, improved product quality, and was able to hire local workers to sell his furniture far beyond his village.

Thabo Molubi joined the tens of millions of people who, every year, are leaving grinding poverty behind and entering the global middle class. When I came across Molubi’s story in a piece by the American author Paul Driessen,1 I was reminded of a conversation at the World Energy Congress. I had just concluded a speech calling on world leaders to prioritize an end to energy poverty. This is an environmental and energy crisis few acknowledge—yet it is far more immediate than the remote targets and timelines that consume the current conversation. After my remarks, a delegate from an African development bank approached. He noted that I was the first speaker to address an issue that was so central to his work. “Why,” he asked, “do so many well-meaning officials claim to champion the developing world while denying access to the low-cost energy that could meaningfully improve the standard of living of impoverished people?”

Fueling the Future

The picture exemplifies how Peabody Energy advances sustainable mining practices to restore coal-mined lands to prime and productive farmland here in central Indiana, as well as across the United States and Australia.

Why indeed? An answer can be found in the widening fault line between the energy approaches of the developed and developing worlds. The world’s rising economies recognize that energy is a human right and a growing need. Studies show that each tenfold increase in electricity is linked to a 10-year increase in life, and the United NationsA has linked life expectancy, educational attainment, and income with per capita energy use.2 In fact, access to affordable energy is instrumental to the achievement of the United Nations’ Millennium Development Goals, which range from halving extreme poverty rates to achieving universal primary education by 2015.

The Challenge Defined

Energy is as essential to our quality of life as food or water, and yet more than half the world’s population, 3.6 billion people, lack proper energy access and 1.3 billion people have no electricity access at all.3,4 These men, women, and children finish their days early due to a lack of light. No refrigeration is available to keep food and medicines fresh.  Doctors and nurses serve an estimated one billion patients in the dark. And approximately half of all primary school students in the developing world must study by candlelight.B

It is flatly unacceptable that, in the 21st century, hundreds of millions of people still rely on traditional biomass for cooking and heat. In some nations, stoves burning wood, agricultural residues, and other wastes account for more than 90% of household energy consumption. Often women and children spend hours gathering these fuels—an activity that deforests landscapes, damages ecosystems, and wastes enormous human potential. The World Health Organization estimates that each year 1.3 million4 people die as the result of fumes from these indoor stoves.5

Without action, this gap can only grow. By mid-century, the global population is expected to reach nine billion people6; five out of every 10 could lack adequate access to energy based on predicted population growth. And while projected energy needs are staggering in the developing world, energy disparities are expanding even in the most developed nations. The International Energy Agency (IEA) called on nations to invest US$41 billion annually or risk failure in the global effort to eradicate energy poverty.7

This is a human tragedy, and an environmental crisis, that is entirely preventable.

A Solution Delivered

As overwhelming demand looms, developing nations have embraced what, to some, is an unlikely solution: 21st Century Coal. The term “21st Century Coal” was introduced by the governments of China and the U.S. in 2009, in the context of an international partnership to advance the development of clean energy solutions from coal. It more broadly symbolizes the essential role of coal in achieving the world’s shared energy, economic, and environmental objectives. It also describes state-of-the-art advances across the industry in areas of safety, productivity, sustainability, and near-zero emissions technology in recent decades.

Few fully recognize the stark differences between negative stereotypes about coal mining and use and current reality. New technologies and coal mining techniques have made economic and environmental goals compatible and achievable. Consider the experience of the U.S., where technical investment transformed coal use into a great environmental success story. Tens of billions of dollars have been invested by U.S. utilities in clean coal technologies to reduce emissions over the past several decades. Since 1970, key emissions from coal-fueled generation have been reduced by 87% per megawatt hour8 during a time when coal electricity increased 115% and real U.S. gross domestic product more than tripled.

“Smokestacks” for coal plants have now become steam stacks, and a study in the New England Journal of Medicine9 revealed that air quality in major American cities is better than at any time in the last two decades, contributing to measurable improvements in life expectancy—even as coal continues to provide more than 40% of U.S. power.

21st Century Coal on the Prairie

21st Century Coal plants represent another leap forward, including one project not far from the headquarters of my company, Peabody Energy, in the U.S. Midwest. Equipped with $1 billion in environmental controls, the Prairie State Energy Campus in southern Illinois is one of the cleanest coal-fueled power plants ever built and the largest to come on line in the U.S. in more than three decades. Prairie State, which was developed by Peabody, has achieved one-fifth the key emissions of conventional coal generating units while creating thousands of jobs.

Upgrading the world’s coal fleet with technologies like Prairie State would deliver a 90% improvement in sulfur dioxide, 93% less nitrogen oxide, and virtually zero particulates, while dramatically reducing the burning of fuel wood and waste that causes enormous indoor air pollution in developing nations. Today’s efficient plants also achieve a carbon dioxide emissions rate that is as much as 40% less than older plants being replaced (see Figure 1 for a comparison of CO2 emissions versus net power plant efficiency).

Fueling the Future Figure 1

Figure 1. CO2 Emissions decline as net power plant efficiency increases

Replacing the world’s older coal plants with advanced generation would be the carbon emissions equivalent of removing the entire U.S. passenger car fleet from the roads. Doing so also would drive $4.3 trillion in economic gains and 21 million new construction jobs, according to a study by Management Information Services.10

The fact that this can be accomplished today with commercial technologies is not lost on the leaders of the world’s best economies.

Nations such as China face what is often called a “prosperity paradox.” In a single generation, China has lifted hundreds of millions of people out of poverty—an accomplishment unparalleled in human history. Chinese use of low-cost coal has powered this prosperity, with coal use increasing 260% since 1990 as China’s Gross Domestic Product rose 20-fold in nominal terms. The correlation prompted the IEA to call China a “coal-fueled economic miracle.”11 And yet, China also faces intense pressures due to the pace of its urbanization and industrialization that threaten to undermine its achievement. Some 200 million Chinese moved to megacities in the past decade in the largest human migration ever recorded, and the China Institute for Reform and Development estimates that this number could double by 2020. Within the next 10 years, more people could urbanize in China than live in the entire U.S.

This prosperity paradox is echoed in developing nations around the world. Every day, more than 367,000 people are born.12 Hundreds of millions more Thabo Molubis will soon be looking for a better life through modern power, and energy use is expected to intensify as a direct result. Many are asking how we can meet such enormous need without straining scant resources and degrading environmental quality.

Once again, China is leading the way to the answer. This Asian nation recognizes that advancing energy access through greater use of coal need not come at the expense of environmental progress. Economic strength has been linked with clean air and water in much of the world. Evidence and common sense tell us that more prosperous nations can afford greater environmental protections and more advanced technologies. This is why China is prioritizing economic and technological development as the most effective path to cleaner air. Chinese leaders are building more supercritical and ultra-supercritical coal plants than any other nation in the world. This one nation represents a remarkable 55% of the global advanced coal- fueled generation that is expected to come online by 2017 (see Figure 2 for the projected coal demand growth through 2035).13 As part of the country’s 12th five-year plan—its national blueprint for economic and social development—China has committed to decommissioning the nation’s oldest plants and deploying modern emissions control technologies in the existing fleet. These advances cannot arrive soon enough. China’s per capita electricity use today is equal to the U.S. in 1955; India’s per capita electricity use is equal to the U.S. in 1920. We are just at the beginning of this story.

Fueling the Future Figure 2

Figure 2. Coal demand growth 2010–2035 (millions of tonnes, U.S. shown in short tons)6,7

A Future for Near-Zero Emissions

We also are just beginning to realize the potential of the next phase of 21st Century Coal technologies involving carbon dioxide capture, use, and storage (CCUS).  While many proposed climate change policies continue to divide the global public, the science behind coal with carbon management is solid and widely understood. Studies indicate coal with CCUS is cost competitive with nuclear and natural gas with CCUS. These “green coal” technologies achieve near- zero greenhouse gas emissions by capturing and injecting carbon dioxide into aging oil fields to recover stranded oil or sending it deep into saline aquifers or other geological formations for safe storage.

Perhaps the best example of green coal is a plant just outside Tianjin, China. GreenGen is a major coal gasification plant that will ultimately reuse carbon dioxide for enhanced oil recovery. It is one of the world’s largest near-zero emissions projects, it began generating commercial power in 2012, and Peabody is the only non-Chinese partner in the project.

The Modern Coal Mine

A visit to Prairie State or GreenGen dispels many myths about coal-fueled electricity generation today. Similarly, I find that visitors to Peabody’s mining operations from outside the industry are amazed by the scale and sophistication of modern coal mining. Contrary to popular belief, most mining occurs above ground; 60% of global coal production, 67% of U.S. output, and 80% of Australian coal comes from surface operations. The best operations are characterized by large size, world-class safety and health management systems, highly skilled workforces, and state-of-the-art machinery.

Peabody Energy's Coppabella Mine

Peabody Energy’s Coppabella Mine in Australia serves export markets in Asia and produces low-volatile pulverized coal injection coal to make steel

21st Century Coal mining operations demand an intense focus on the fundamentals of operational excellence. Everything matters—from environmental standards to workforce training. But no issue is of greater importance than safety. For example, Peabody recently delivered the safest year in company history in 2012 by making safety a way of life, a method of working and living. Our focus on delivering zero incidents of any kind is relentless and resulted in a global incidence rate of 1.82 last year, a 9% improvement from 2011 and the fifth consecutive year of record safety performance. Peabody is not alone: In the U.S., working at a mine is safer than working in a shopping mall, in construction, or many other fields according to incidence rate data from the U.S. Occupational Safety and Health Administration and the U.S. Mine Safety and Health Administration.

Having made a career in mining, I have a deep respect for those who choose this industry as a career, and I also recognize the scope of our collective responsibility to ensure that effective health and safety standards are in place and followed. For this reason, during my Chairmanship of the Peabody Energy’s Coppabella Mine in Australia Serves Export Markets in Asia and Produces Low-Volatile Pulverized Coal Injection Coal to Make Steel

National Mining Association (NMA), we established a CEO Safety Task Force which set an industry goal of eliminating fatalities and reducing reportable injuries by 50% within five years. To accomplish this objective, representatives of NMA member companies collaborated on development of a model safety and health management system called CORESafety, which is based on the best practices of other industries. The CORESafety system is designed to be adaptable to all mining companies, is complementary to existing safety and health initiatives, and is currently being implemented across the U.S. mining industry.

Peabody has sought to share best practices and forge global partnerships that can result in improved safety performance, resource recovery rates, land restoration, water resource management, and environmental monitoring. When mining is complete, lands are returned to a condition that is the same, and often far better, than before mining occurred. For example, in 2012 Peabody Energy alone restored more than 4000 acres of wetlands, prime farmland, forests, and prairie across two continents and recycled more than 18,000 tons of materials.

China is making significant progress in this area, as well, and has responded to recent safety and environmental challenges by shuttering small, less-regulated mines and emphasizing win-win international partnerships that promise to introduce advanced, large-scale surface mining techniques in its far western regions.

Peabody Energy operators

Peabody Energy operators monitor real-time computerized dispatching technologies that monitor productivity and improve operating efficiencies

Advanced Technology Drives Modern Mines

Advanced technology is the backbone of this effort. Peabody employs global positioning satellites, real-time monitoring systems, and computerized dispatching technologies to improve operating efficiency. Thermographic cameras help technicians measure heat differentials in equipment and conserve energy and improve equipment availability; acoustic listening devices assist employees in performing preventative maintenance; and proximity detection systems prevent collisions in high-congestion, low-visibility areas. An example of advanced technology is modular mining technology that synchronizes haul truck routing to optimize coal blends for customer requirements.

21st Century Coal mining also features machines of significant size and complexity, including haul trucks capable of carrying more than 400 tons, massive shovels and draglines, and underground longwall mining systems with more parts than an average supercomputer. Peabody commissioned a haul truck capable of holding 447 tons, enough to qualify for the Guinness Book of World Records, and we developed a conveyor and blending system at our North Antelope Rochelle Mine (NARM) in Wyoming that enables this single operation to transport and blend coal over great distances with precision.

The pace of innovation is intense, but the potential for improving lives and livelihoods is immense. The world has nearly a trillion tons of proven coal, which makes up 60% of global energy resources. Coal is widely dispersed and broadly available, Peabody Energy Operators Monitor Real-Time Computerized Dispatching Technologies that Monitor Productivity and Improve Operating Efficiencies with coal mines in 70 nations (the top 10 coal producers are listed in Table 1). Coal also is easily transported, reliable, and affordable.12 It remains the leading baseload fuel to replace declining nuclear generation and maintains a distinct cost advantage over liquefied natural gas globally.

Fueling the Future Table 1

Table 1. List of top 10 global coal producing countries

Fueling the Future

Looking ahead, it is time to find some common ground on coal. For too long, energy policies in many nations have defaulted into predictable positions: business against activists, coal versus gas versus renewables, nation versus nation. The world often seems entrenched in a debate based on fixed opinions and fuzzy data. It is time to recognize the realities of 21st Century Coal mining and use. It is also time to empower people like Thabo Molubi to achieve better health and wealth through the greater use of affordable energy, which largely comes from coal.

Common sense tells us that the world cannot regulate, tax, or conserve its way out of our current global economic stagnation. The solution is a balanced policy framework that encourages and rewards greater use of coal in a low-carbon way. 21st Century Coal can combat energy poverty and fuel an industrial rebirth. We believe it will take five steps, what we call the Peabody Plan:

  • First: We must work to eliminate energy poverty by ensuring that at least half of new generation is fueled by coal;
  • Second: Replace older traditional coal plants with advanced coal technologies;
  • Third: Develop at least 100 major carbon capture, utilization, and storage projects around the world within 10 years;
  • Fourth: Deploy  significant  coal-to-gas,  coal-to- chemicals, and coal-to-liquids projects globally in the next decade; and
  • Finally: Commercialize next-generation clean coal technologies to achieve near-zero emissions.

It is time to finally approach energy issues pragmatically—and recognize that the answers are right under our feet. It is time to act on available technology solutions. It is time to rebuild our nuclear power infrastructure, explore for natural gas and oil, and develop more cost-efficient renewables. Most of all, it is time to drive an energy technology renaissance with 21st Century Coal.

 

NOTES

A.    Analysis by Dr. Frank Clemente, Pennsylvania State University, based on International Energy Agency World Energy Outlook, 2012, and The World Bank World Development Indicators, 2012.

B.    Analysis of United Nations Population Division, “The World at Six Billion,” Dr. Frank Clemente, Pennsylvania State University; International Energy Agency, World Energy Outlook, 2012; World Coal Institute, “Coal Tackling Poverty,” 2007. World Health Organization, 2012 data.

C.   Ultimately recoverable demonstrated reserves on Btu basis. United States Geology Service, National Assessment of United States Oil and Gas Resources, U.S. Coal Reserves; World Energy Outlook  2012, International Energy Agency; Annual  Energy Outlook  2012, Energy Information Administration; Peabody analysis.

 

REFERENCES

 

1. P. Driessen, Power for the People, Blog entry, 2 April 2011. Accessed May 2013, townhall.com/columnists/pauldriessen/2011/04/02/power_for_the_people

2.   United Nations Development Program, Human Development Report, www.un.org/millenniumgoals/

3.   U.S. Central Intelligence Agency, The World Factbook, www.cia.gov/library/publications/the-world-factbook/index.html

4. Practical Action, Poor People’s Energy Outlook 2013, 2013: Practical Action Publishing Ltd. practicalaction.org/ppeo2013

5. Centers for Disease Control, Cookstove Alliance (Your Health – Your Environment Blog), 2012, blogs.cdc.gov/yourhealthyourenvironment/2012/06/05/cookstove-alliance/

6. U.S. Energy Information Administration, 2012; International Programs Center, U.S. Census Bureau, World POPClock Projection, www.census.gov/popclock

7. International Energy Agency, World Energy Outlook 2012, 2012: OECD Publishing.

8. U.S. Environmental Protection Agency, Clean Air Markets database, July 2012,  www.epa.gov/airmarkets/; Project permits

9. Scientific American, Lung-gevity: Longer U.S. Life Expectancy One Benefit of the 1970 Clean Air Act, posted 25 April 2011. Available at: www.scientificamerican.com/article.cfm?id=us-air-quality-on-mend

10.  Management   Information   Services,   “The   Economic   and Environmental Impact of Adding 1,000 GW of Coal Electric Power,” 2010, and Peabody Energy global analytics.

11.  International Energy Agency, 2009, www.iea.org/Textbase/npsum/coal_china2009SUM.pdf

12.  United Nations, as reported by S. Roberts, U.N. Says 7 Billion Now Share the World, New York Times, 31 October 2011, www.nytimes.com/2011/11/01/world/united-nations-reports-7-billion-humans-but-others-dont-count-on-it.html

13.  Platts, World Electric Power Plant Database, January 2013, and Peabody Energy global analytics.

 

The content in Cornerstone does not necessarily reflect the views of the World Coal Association or its members.