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No coal-powered plant in Sabah

Posted by Save Sandakan On February - 20 - 2011ADD COMMENTS

Michael Kaung

| February 17, 2011

Conservationists in Sabah can celebrate now that a highly contentious project has been scrapped.

KOTA KINABALU: The Barisan Nasional (BN) government has scrapped plans to build the controversial coal-powered plant in Lahad Datu.

Caving in to pressure to keep Sabah clean and green, Chief Minister Musa Aman said the government had scrapped “once and for all” any bid to put up a  coal-powered plant anywhere in Sabah in the interest of the environment.

Making the announcement after chairing the state Cabinet meeting today, he said both the federal and state governments have agreed to pursue alternative energy sources like natural gas to meet the state’s energy needs.

“On behalf of the state government and the people of Sabah, I wish to accord my heartfelt thanks to our Prime Minister (Najib Tun Razak) for not only being attentive to our power supply needs but also for his grave concern for our environment,” Musa said.

He added that Najib has told Tenaga Nasional Bhd and Petronas to come up with alternative clean energy fuels such as natural gas to replace the proposed 300MW coal-fired plant in Lahad Datu.

Najib, he said, understood that while there was a need to boost the state’s power supply, it could not be done at the expense of the people’s welfare and the environment.

“The prime minister understands that one of Sabah’s greatest assets is its natural attractions and still somewhat pristine environment.

“While Sabah needs to increase power supply to meet increasing development, the state cannot afford to put its natural environment at risk,” he added.

Protect the environment

Musa said that it was the paramount duty of a responsible government to give priority to protecting the environment and its people.

“We must protect the environment, especially when it is the biggest tourism draw,” he said, adding that the growth of eco-tourism depended how best the state kept its natural environment and not expose it to unnecessary risks.

“I know there have been certain objections to the proposed coal plant. Today is proof that such objections have not fallen on deaf ears,” he added.

A proposed coal-powered plant in Lahad Datu came under intense public criticism and a detailed environment impact assessment was rejected by the Department of Environment.

However, Sabah Electricity Sdn Bhd, through its subsidiary Lahad Datu Energy Sdn Bhd, had made attempts to re-submit the report in the hope of starting construction of the plant in Tunku in Lahad Datu.

NGOs, including the Sabah Environment Protection Association (Sepa), had started campaigning more than two years ago to prevent the construction of such a plant. Consequently, the site of the plant was shifted three times due to bitter opposition from residents in the east coast
of the state.

http://www.freemalaysiatoday.com/2011/02/20/doing-away-with-coal-plant-part-of-nem/

Popularity: 32% [?]

Govt says no to coal power plants in Sabah

Posted by Save Sandakan On February - 19 - 2011ADD COMMENTS

Posted on February 17, 2011, Thursday

KOTA KINABALU: The government has agreed not to build coal-fired power plants in Sabah.

Chief Minister Datuk Seri Musa Aman said the decision was made at the recent National Economic Advisory Council meeting chaired by Prime Minister Datuk Seri Najib Tun Razak.

“I am aware there are protests against the proposed construction of a coal power plant. Today, it’s proven that all the protests have been given due attention.

“The Barisan Nasional (BN) government under the prime minister’s leadership is a government that always listens to the voices and feels the pulse of the people. We have high determination and political will to make the decision which was not easy, namely not to build coal power plants in Sabah,” he told reporters after chairing the State Cabinet meeting here yesterday.

Musa expressed appreciation on behalf of the state government and Sabah people to Najib who had not only given serious attention to energy needs in Sabah but also showed high concern for the environment.

The proposed construction of a coal power plant in Felda Sahabat, Lahad Datu, to meet electricity supply needs in Sabah East Coast has previously received objections not only from local non-governmental organisations but also international activists.

In August last year, the Environment Department had rejected the Detailed Environmental Impact Assessment (DEIA) for the project but Tenaga Nasional Bhd (TNB), in its 2010 Annual Report, mentioned that “a reviewed DEIA report will be submitted for study and approval” for a 300MW plant.

“The prime minister also understands that among valuable assets that belong to Sabah is its appealing natural environment which is still preserved.

“We need to protect our treasure, particularly the natural environment because it is among major contributors to the state’s economic sector,” Musa added.

The growth of ecotourism activities and nature adventure tours, he said, depended on how far the natural treasure could be preserved and not exposed to any risks.

He said the government was aware of the problem of energy shortage in Sabah, particularly in the East Coast area.

In this regard, the federal and state governments had agreed to use liquefied natural gas (LNG) to generate power in the state, he said. — Bernama

http://www.theborneopost.com/?p=94058

Popularity: 3% [?]

Other plants don’t discharge into sea

Posted by Save Sandakan On January - 27 - 2011ADD COMMENTS

I refer DE 9th Jan 2011 Forum letter entitled ’Anti-coal group not majority’ (page 21), written by Mr. David Lee.

Point for point, Lee says that “anti-coal does not represent the silent majority about the project proposal (site 300 MW coal-fired plant at Sinakut, Darvel Bay). They would sooner have the electricity supplied to their homes uninterrupted rather than join the debate.”

In fact, his ‘silent majority’ claim  actually highlights the reality of a lurking danger : an uninformed majority.

For instance, the majority of  fatal accidents happen because the victims obviously  don’t know what’s coming! Similarly, most people don’t know how our  independent power  producers operate their coal plants and perhaps Mr Lee should study it himself.

But it stuns everyone the moment they see Google pictures how these plants discharge huge amount of waste water straight to the sea and night pictures of dark fly ash shooting into the air, 10 out of 10 objected.They change their mind quickly when they realize coal plants use our seas as their ‘garbage’ dump.

Deep in their hearts, the majority object heavy pollution, when  you let them know .

On his claim that the majority want “uninterrupted supply” of electricity to homes and industries, who told Mr Lee NGOs have advocated anything to the contrary?

Does Mr Lee know anyone in Sabah who campaigns against uninterrupted power supply?The good news is East Coast and Lahad Datu folks say “uninterrupted” power supply is already a reality there of late.

Why all of a sudden this can be done, when some tried their best to argue they need a coal plant to do it and  put all the blame about the decades of constant blackouts on anti-pollution groups for causing the woes?

It confirms the time-honoured saying: If there is a will, there is a way, even without coal, thanks to Green Energy Minister, Peter Chin, who vowed to resign by the end of 2010, if he could not fix the perennial blackouts.

Well, he fixed it and celebrated his success, we heard!

By urging the State and Federal Governments to study traditional coal user countries like  Japan, Britain ,  Europe, Australia, Taiwan and China, Lee went on to urge the Federal and State Governments to “make the right decision.”

The right decision is to reject such a heavy air and sea polluter in what every marine scientists and fishermen have always known is the richest coral ecosystem in the world which is already earning RM250 million per year from diving alone, not including fisheries, seaweeds and fish farming.  Sabah Tourism and Tourism Malaysia have already said they wanted to expand the diving industry to all the scores of islands in and around the Dent Peninsular because Sipadan can’t cope any more with the rising crowd.

It can’t be a right decision endorsing an industry that pours toxic wastes into this system and eventually envelope the skies of Semporna with a daily shroud of nitrogen dioxide haze (low level ozone), destroying both air and water quality, as is the case reported  in Manjun, Klang, KL and Johor.

It will only brand such a renowned  marine destination negatively and put a road block to its growth.

Ironically, Mr Lee, a foreigner to Australia, praised the Great Barrier Reef as a “paradise for tourists” but in the next breath,  sank to a spiral of totally negative remarks about  “foreign environmentalists who come to Sabah one or two days and make fantastic prises about Sabah’s environmental paradise, exotic species, pristine forests, lost world, world heritage quality.”

What is this?

Jacking Australia but cynical  about foreigners’ good word on his  own State.

But we know Mr Lee wants to say : see, “Queensland burns tens of millions of tons of coal to produce 8,000MW of electricity for decades, from a dozen huge coal-fired plants . If our Sabah environmental activists’ claims of environmental disasters are correct, the corals in the Great Barrier Reef would be wiped out by the pollutants by now,” we quote him.

Well, Mr Lee mentions “pollutants”.

It will be interesting if Mr Lee can prove to the people of Sabah the dozen huge coal plants in Queensland he mentioned, make direct discharges of waste water into the Great Barrier Reef!

As far as we know, coal plants in Australia don’t discharge pollutants straight into the sea.

For example, the Bayswater and Eraring –Australia’s two largest power stations, employ a ‘closed system’ to use, recycle and reuse the same body of cooling water to avoid contaminating the natural water systems – rivers or seas.  

To do this,  Baywater and Rearing erect natural draft towers 132m high to drop and cool hot water from the boilers ,  store the water in man-made lakes, then draw and run the same water through their condenser pipes to cool the super-hot turbines.

This self contained cooling system doesn’t give coal plants the liberty to pollute nearby natural  water systems , ensures zero discharge and protect particularly rich marine ecosystems from thermal or  toxic runoffs !

As paradoxical as it may sound, anti coal don’t condemn coal.

Why condemn a mineral which acts like a sponge that absorbs all the deadly heavy metals like arsenic, mercury, lead, etc , keep them safely buried underground in order to keep our environment from harms way?  

But once we burn it for power, it’s clearly in Sabah’s interest to question  HOW they plan  to do it!

The bone of contention centres on potentially monstrous waste discharge into our best sea.Even Mr Lee should object if he knows that is going to happen.

So, what stirs the NGOs’ preventive objection  is  potential spectre of  a terrific discharge of hot waste water into the sea around Dent Peninsular and Semporna for a possible century.

Mr Lee doesn’t seem to worry about the consequence.

But a lot of people do.

Among them are very educated, leading doctors, CEOs who have developed and managed tens of thousands of hectares of oil palm estates, including former Speaker of the State legislative Assembly who is known to read a lot and therefore know a lot about coal burning.

They can easily face Mr Lee for a debate if he wants. 

When they proposed to build it is Seguntur, Sandakan, people who live nearby rose to the forefront object include  a family of asthmatics who are on medication and were afraid constant exposure to fly ash discharge could trigger fatal attacks.

Does Mr Lee know the valid range of life or death concerns of our local people before branding them as stooges of powerful foreign environmentalists.  

Also, the director of a major hospital can’t be a stooge of  foreign environmentalists, an she?

So, Mr Lee, don’t push coal plants in Sabah and invoke Australia as if our independent power producers adheres to the same strict mitigation processes as the Australians do!

Ours head straight to the beach, exploit and draw easy seawater, disinfect  it chemically, run it through the cooling system and dump it back to the sea.       

Is this the “right decision” Mr Lee presses the governments to make?

If so, we would say the so called “environmentalists” Lee  invariably label  negatively , are the real patriots because they show care , they want to protect Sabah’s natural resources from the excesses of industries but don’t object to industries.

Even so, no body, including the best Australian coal power stations, know how to capture C02, the chief culprit in global warming.  

C02 emissions remains a dangerous pollutant.

Mr Lee’s hope of keeping C02 underground is not practical.

A major earth quake and it all escapes!

Paradoxically, Mr Lee paid such glowing tribute to Australia’s huge coal industry without citing a word about the extreme  floods that struck Australia from the plains of Rockhampton to highland Toowomba last week!    

Instead, he made a one-track minded statement like “countries like UK, China, Europe had been burning coal for a 1,000 years. If coal were so bad as some claimed, the damages would have been written all over the faces of the people of these countries.”

Yet , the whole world saw how extreme drought, bush fires  and  extreme floods covered the face of Australia over the last two years, similarly Pakistan, China , Sri Lanka and also the extreme snows in North America and Europe just two weeks ago.

Strangely, Mr Lee doesn’t think these weather extremes have anything to do with burning coal over the last several hundred years and a steady rise in global temperature and continues to champion the high virtues of coal. 

He can ignore all what climate scientists and economists who have admonished the world to do something about decarbonising, because small changes in averages (average world temperature) cause big changes in the frequency of extreme events but strangely, Mr Lee’s blind spots to all these are total, except his singular interest in minerals and mining and so if he dominates the microphone, all these extreme events may swallow us.

We think  Mr Lee wrongfully accuse ‘Green Turf’ (Green Surf, Mr Lee) which he says campaigns for  “ absolutely no mining in Sabah” and challenge  NGOs to mine , refine and turn such rich minerals like iron ore, coal, copper, manganese, nickel and turn them into turbines , plants, mills et to produce the green energy  they are advocating.

MR Lee is very  wrong to think no body can do better than conventional thinkers like him. 

There is a huge range of talents, knowledge, insight, understanding and passion which are simply not tapped!

His idea of business as usual, do what the Indonesians  do, mine coal, make the billions, projects need go on and there is “no  escape at the expense of the environment” tell Sabahans to look Indonesia! 

The traditional ‘balanced development’ idea is already outdated because a lot of smart thinkers discovered sacrificing cherished permanent stuff for things materialistic and transient is simply foolhardy and short-sighted.

Instead, they advocate  the ‘win-win’ concept which involves good strategic planning that produce all round benefits without sacrificing vital ecosystem services but at the same time, reaping the full  benefits of Man-made development and projects.   

So we object when people say, if you want electricity , you must be prepared to sacrifice your richest sea. 

Mr Lee even questioned the  NGOs : ‘where is our conscience?’

He should ask himself that question instead.

If he says sacrifice Semporna’s productive ecosystems we must, because  people in KK want continued power supply to their house, he’s not thinking of  the thousands of stakeholders there who rely on its reef health and water quality for seafood, diving, seaweed farming, that’s no conscience.

The smarter thing to do is to try to break the trade-off , or at least reduce and minimise it but don’t encourage the government and project proponents by saying they are free to override or sacrifice ir-replaceable millennia old reef system, just for electricity which can be produced in dozens of ways and places!  

As for claims that environmentalists object to even 100m sand mining in rivers, the people who really raise objection to the press  are riverine land owners who see their land eaten away by erosion water quality destroyed because of heavy riverbed dredging.

Furthermore, rivers are dynamic currents. Dredge in one place, mud and sediments are carried hundreds of miles downstream, degrading every living habitat on its way.

In addition, sand miners more from once site to another. Dig 100m one time, if they move 20 times, it adds up to 2000m or the whole river. But of course, with Mr Lee’ singular focus on mining, he sees no reason to regulate these guys.

If he doesn’t believe, go the Papar River to have a look.

And don’t worry about environmentalists’ objections to sand mining, all of Sabah’s rivers are already heavily polluted with mud flows. If they object , it’s a reaction to seeing the destruction already done and an attempt to salvage some grace for Sabah. 

As for environmentalists objecting to every road through kampongs, don’t worry too, roads had already cut many mangrove forests asunder and mangrove forests have been removed wholesale for development when they could have left them alone and develop in more appropriate  grounds. All that win-win benefit can be achieved, minus the conventional attitude that belittles the environment and the vital importance of their ecosystem services to Sabahans.

As for environmentalists wielding great political power, the fact is they are powerless to approve or rescind projects , only struggle to persuade decision makers to please help, often with their own time and money, unlike some who continue to receive handsome pensions from tax payers’ money long after retirement, and basically for doing nothing for the public interest.

Mr Lee then said how the Chinese are getting smart like the Japanese and western countries by shifting their “heavy industries” to foreign lands. 

Actually what they have done is keep the clean, high value, strategic industries at home and shift the really dirty, toxic  primary processes outside, like the aluminium smelter Mr Lee mentioned..

A very good example is the Mamut Copper mine which peaked in the hey days of Mr Lee’s career , where the Japanese processed the raw materials here and shipped the copper home.

Extracting copper and gold with the most toxic chemicals like cyanide and discharging the deadly wastes into the Lohan and Mamut Rivers, killed all fish in both rivers and of course.   

Sabah Parks erected ‘toxic river’ warning sign at Poring.Belian fish, Tor lambroides, all died .

If they didn’t vanish, Sabah Parks might be able to make a lot of money from ‘fish massage now, like some villagers near Sabah Tea are enjoying now. 

MR Lee insinuated some ‘high government officials are already infected and are dancing to their (environmentalists) tunes.”  

Some high government officials indeed have seen  the massive lake of highly acidic water in Mamut Copper mine which still leaks out to the rivers.

We read in the local newspapers how a Japanese professor proposed to take out the acidity for a reported sum of some RM150 millions with effective mircrobes.

But how much did the State earn from Mamut Copper Mine?

We heard around just RM200million.

But according to some  high government officials,  the professor never returned, because his verdict is ‘the problem is too big’ to tackle! 

So Mr Lee should not portray these high government officials as though they are dumb, don’t know anything  and manipulated by environmentalists.

They know more than what Mr Lee think.

On their lap is a threat, costly unsolvable  legacy left  behind by miners and their advocates  who have long washed their hands. 

Save Sabah

 

Daily Express Forum Sunday 23rd Jan 2011 .

Popularity: 4% [?]

Anti-coal group not majority

Posted by Save Sandakan On January - 14 - 2011ADD COMMENTS

Forum

Published on: Sunday, January 09, 2011

Anti-coal group not majority
By: David Lee
I HAVE been reading every report in the local papers on the coal fired power plant for Sabah and the opposition seems to be as strong as ever.

The anti-coal-fired power plant group does not represent the silent majority who has not spoken one way or the other about the project proposal.

They would sooner have the electricity supplied to their homes and industries un-interrupted rather than to join in the debate.

They trust that the State and Federal governments would make the right decision with both the electorates and the environment in mind.

It would help to make the right decision if the decision makers make a study of the traditional coal user countries like China, Japan, Britain, European countries, Taiwan and Australia and see what damage had been done to the people and countries.

Countries like China, Britain and the European countries had been burning coal for a thousand years.

If coal use was that bad as some claimed, the damages would have been written on the faces of the people and the countries.

Queesnsland in Australia has the world’s biggest and longest coral reefs and the beaches are the world’s best. It is the paradise for tourists who go there by the millions each year.

The State of Queensland produces tens of millions of tonnes of coal for export each year.

In addition Queensland burns tens of millions of tonnes to produce some 8,000 MW electricity for decades. Over 70 per cent of the State’s energy needs came from coal. If our Sabah environmental activists claims of environmental disasters resulting from coal-fired plants are correct, the coral in the Great Barrier Reef off Queensland would have been all wiped out by now by the pollutants discharged from a dozen huge coal-fired power plants. Tourists would have stopped going there long ago.

Likeswise Britain and European countries draw the biggest tourist crowds.

Yet they are traditional coal users for centuries.

If those fish and coral off the Dent Peninsula were poisoned one day, it would not be the result of the as yet non-existing coal-fired plant, but due to the effluents from all the oil palm plantations and mills washed down to the sea. The run-off into the sea of excess NPK and other elements and temperature of the surrounding sea water over time and would adversely affect the marine life, coral included.

Even now, after 30 years of extensive agricultural activities on the east coast,. the sea water chemistry may have already changed.

But we did not have a base line study 30 years ago. So we don’t know what changes had taken place.

Whatever harm the oil palm industry may bring on the environment, there is no turning back.

The industry is deeply rooted in Sabah’s economy.

Looking at things in global perspective, I think George Wehrfrits who wrote in Newsweek Dec, 17,2007, summed up the situation aptly about the inevitable continuing would-wide coal use.

“It isn’t just Pandas the World Wildlife Fund is hugging. In a major policy shift, the group is cautiously embracing a longtime foe of the greens: King Coal. Its report titled Climate Solutions; WWF’s Vision for 2050, maps out a plan for doubling global energy consumption while slashing greenhouse-gas emissions by 60pc – the minimum necessary to limit global warming to 2 degrees C.”

“Amid the usual call for renewable, WWF envisions coal delivering 20pc of global energy needs in 2050.

Why coal? Because there is no silver “bullet” to stop global warming, says Liam Salter, head of WWF’s climate-change programme in Hong Kong. Nor is it practical to rule out the dirty coal but abundant fossil fuel.

The report envisions “a clearly defined, though limited, role for coal in a climate-friendly economy.”

Coal would fire highly efficient (and still experimented) power plants that store CO2 underground.

Conservation would help bridge the gap between now and 2030, when the new coal plants will be ready.” G.W. Newsweek.

As if in response to the WWF’s favorable assessment about coal usage the Indonesian miners are going full steam ahead with their coal mining and coal-fired power generation. Our neighbour is top coal producer/exporter in this region. By 2017 it will burn about 100 million tonnes of coal to generate electricity as its oil and gas reserves are depleting fast. What do you say about the effect of climate change from Indonesia’s coal power plant emission compared to our burning of mere 1 million tones?

Indonesia will double coal production to 400 million tonnes per year by 2017. It earns tens of billion US. dollars from coal export.

Who is going to stop the country from burning and exporting CO2 to Malaysia and other consumer countries?

Even the so-called green energy sources like oil and gas, hydro, biomass are all polluting energy sources. Our local NGOs should have gone to the Gulf of Mexico to help scoop up the scum from the recent oil spill and bury the birds to realise the effects of oil and gas pollution.

If we were to go total green we would need millions of tonnes of iron and copper ores and millions of tonnes of coal to refine and smelt the raw materials into finished metals to manufacture all the steel and other metals needed to fabricate oil and gas pipes, the monster rigs, the huge hydro turbines, hundreds of biomass plants, thousands of wind mills etc to produce 3,000 MW electricity that Sabah will need.

Sabah has all the raw natural resources like iron ore, coal, copper ore, manganese, nickel and other metals and minerals. But NGOs will have to mine them, refine them and turn them into finished ready-to-use metal products in order to be able to manufacture all those turbines, plants, mills, etc, to produce the “Green Energy” that some had been advocating.

But the Green Turf members said: “Absolutely no mining in Sabah”.

We have to come to our senses. No mining means no Green Energy!

The environmental activists might suggest that we could import all that from China.

But it would be a crime to export pollutants to another country. China’s sky would be all darkened by industrial pollutants and many of its citizens will choke to death if it continues to supply world needs for the steel and other manufactured products, while Sabah and the rest of the world enjoy the pristine environments and bright skies.

Where is our conscience?

Why can’t we have our cake and eat it too? Beause the Chinese are getting smart. They are following the footsteps of the Japanese who, in turn, had been following the footsteps of the Western world.

Rather than building more factories at home Chinese are now shifting their heavy industries and factories to the third world and even to the developed western worlds like United States and produce the goods they need in their own backyards!

The Chinese are coming to Sabah, too, to build huge aluminum plants, cement plants and all other plants to produce the goods that we need.

Hurray! The world trading creed has come full circle.

Sabah seems to be the only State which has been gripped by environmental activist movement.

The movement seems to be wielding enormous political influence as it is probably supported morally and financially from its rich foreign counterparts.

The local movement has been attracting foreign environmentalists who find the state fertile ground to carry out their mission.

They come to Sabah for one or two days and make fantastic praises about Sabah’s environment-eco-paradise, exotic species, pristine forests, lost world, world heritage quality, 8th wonders ,etc, and expect their pronouncements to be carried in the local newspapers. Must be real experts to be able to assess Sabah’s wonders in such a short time!

Their mission is to create a virtual clean and green state so that those fragile flora and fauna will thrive over humans. Every development – a road passing though conservation area to a kampong is considered harmful to the speies and the project has to be stopped.

Mining for river sand, (vital to our infrastructural development), on a 100 meter stretch of a big, 300km long river is to be stopped because some tourists and some monkeys in the nearby forest didn’t like the sight of the operation.

Some of our high government officials are already infected and are dancing to their tunes.

Minister Datuk Chin must have done some reading to come up with the statement that “most countries in the world are still heavily dependent on fossil fuels as their main source of energy.

We cannot run away from such traditional fuel sources”. Well said. But this is not the type of song the activists like to hear!

Can one imagine United States which depends 45pc of its energy on coal and China (60pc on coal), together consuming some 2.5 billion tonnes of coal annualy, were to suddenly go for green energy?

They would have to exploit and deplete the whole world’s mineral resources in a short time, including our Maliau Basin coal and iron in order to achieve the objective.

Whatever decisions the governments will make on the proposed Tunku coal-fired power plant, I hope it will not be founded on fictional scary tales of environmental disasters but on well researched data and on world-wide trend on coal usage.

The environmental authorities should be rational and be realistic and should not reject the whole project proposal just because there are some spelling mistakes here and there in the EIA reports.

Bear in mind that whatever project for the humans and species, and the governments and public agencies have carried out many such projects over the years, there is no escape but at the expense of the environment.

Chin, don’t throw out the baby with the bath water in frustration!

http://www.dailyexpress.com.my:80/read.cfm?NewsID=543

Popularity: 4% [?]

No Coal-Fired Power Plants Built in Past Two

Posted by Save Sandakan On January - 9 - 2011ADD COMMENTS

 

Years Published January 4, 2011 Washington Post

RELATED ARTICLES – Environmental Groups Bash ‘Clean Coal’ in New Campaign

The Washington Post has announced that in 2010, not a single new coal-fired power plant was constructed in the United States. This marks the second year in a row in which this has occurred. Coal remains the most abundantly used source of electricity, accounting for half of all power generation. However, a number of factors, such as the economy, lower natural gas prices, and environmentalist opposition, have effectively halted the growth of the coal industry.

Coal is being dumped in favor of natural gas, which due to extensive exploration and production, has a significantly lower price than in the past. Much of the new gas production is in shale rock, which have recently been unlocked due to new technologies. Reserves of shale gas are believed to be vast in North America and elsewhere, rivaling the oil reserves of the Middle East.

America’s largest electricity generator, American Electric Power (AEP), plans to turn to natural gas for any additional electrical capacity. The price of natural gas straight from the wellhead stood at about $4.25 per thousand cubic feet in 2010, well below its historic average price. According to a report from Deutsche Bank, if gas prices stay below $6, more plants will be converting from coal to gas.

“Coal is a dead man walkin’,” says Kevin Parker, global head of asset management and a member of the executive committee at Deutsche Bank. “Banks won’t finance them. Insurance companies won’t insure them. The EPA is coming after them…And the economics to make it clean don’t work.”

But coal is not completely dead yet. Last year, the coal industry managed to kill the climate legislation (cap and trade) in the US Senate, showing it still has a lot of influence in politics and public opinion. Plus, even as it declines, it remains the number one source of electricity in America.

However, the coal industry is under a heavy assault from the Environmental Protection Agency. Starting this year, new EPA regulations take effect to lower greenhouse gas emissions of power plants emitting over 75,000 tons of carbon dioxide per year. Such a rule would force industry to install state-of-the-art emissions controls on new construction in order to obtain the necessary air permits. For a dirty fossil fuel like coal, the added cost of new controls can make it economically prohibitive, accelerating the conversion to natural gas.

Fights among lawmakers and in the courts can be expected as the new regulations begin to take effect. Many Republicans plan to block or hamstring the EPA’s efforts. Nevertheless, overall demand for coal power is decreasing in the United States. From 2000 to 2008, 19 new coal-fired plants were constructed. In 2010, plans to build 38 new plants were abandoned, and an additional 48 plants were mothballed. For the sake of the environment, let’s hope this trend continues.

Link to Washington Post article: http://www.washingtonpost.com/wp-dyn/content/article/2010/12/31/AR2010123104110.html

Popularity: 4% [?]

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