Coal is once again a hot commodity.

The Wall Street Journal reports a surge in the international demand for coal to produce electricity, especially in underdeveloped countries that are still trying to bring cheap, reliable power to millions of people.

The Energy Information Administration reports that U.S. coal exports doubled in 2017 and are expected to rise again this year.  In West Virginia, coal exports increased from 24 million tons in 2016 to 34 million last year, a rise of 42 percent.

“The rebound shows coal’s resilience, especially in emerging regions, and recent events suggest the market for black combustible rock will remain strong,” reported the Journal.  “In the U.S., the Trump administration has proposed to reverse U.S. rules on coal emissions, and countries including India and Vietnam are planning major coal projects.”

The resurgence of coal is startling given the considerable obstacles. The fuel has become a pariah in many developed countries because coal-fired power plants are a leading emitter of carbon that contributes to climate change.

But while scientists, policy makers, environmentalists and industrialists argue about the impact of global warming, underdeveloped countries are often more concerned about how to get electricity to a village so people can have lights, refrigeration, clean water and a connection to the rest of the world… essentials that an estimated 1 billion people do not have currently.

“Coal plants are attractive because they are less expensive to build than renewable energy facilities,” the Journal reports. “The cost of constructing a renewables plant is roughly double the outlay of a fossil-fuel facility, experts say.”

West Virginia economic experts say the increased international demand provides new markets for coal companies.  “The expansion of coal-fired generation in India, Vietnam and Turkey will help to offset the decline in domestic demand for the steam coal that is mined in both northern and southern West Virginia, said Brian Lego, an economic forecaster at WVU’s Bureau of Business and Economic Research.

Lego said even with the challenges of concerns about climate change and the increased difficulty of obtaining financing for coal-fired power plants, there could be “some new mine investment in West Virginia—new mines opening, longwall investment, etc.”

He does point out, however, that global markets are fickle and fluctuations in economic growth as well as trade policy decisions could contribute to significant swings in demand. Those kinds of ebbs and flows are always hard on communities that depend on the coal industry and its suppliers for their livelihood. Still, coal’s comeback is a positive for West Virginia’s economy.

Underdeveloped countries that are increasing their coal consumption have not given up on alternative fuels.  As the Journal reports, in Nigeria, where half of the 190 million citizens have no access to electricity, the country’s leaders are counting on coal and alternative fuels.

“What the world really needs is to achieve a balance,” Nigerian minister of power, works and housing Babatunde Fashola told the paper.

Developed countries may have the luxury of picking and choosing their power sources or, as we have seen in the United States, even adopting policies aimed at shutting out coal. But much of the rest of the world is just trying to turn on the power, and to them coal is a critical part of the energy portfolio.

 

 

 

 

 

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