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Will the US put the lights out in the waning Coal Industry?
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For a long time, coal put โ€˜greatโ€™ into Great Britain. Coal mining fueled the Industrial Revolution, it kept people warm, it kept the lights on, and it allowed people with little else to make a decent living. Somewhat unexpectedly, the coal industry generated exciting adventures for Great Britain, as the country became a thriving exporter reaching out to the Far East and across the Atlantic. A long-held view is that coal played a vital role in the 19th- century industrialization that helped Britain become the first nation to modernize its economy by exploiting black gold reserves. Ironically, April 21, 2017 marked a watershed moment when Britain got through its first day without burning coal since the Industrial Revolution.

The coal milestone wasnโ€™t the only energy record set in Britain recently. In March 2017, energy produced by solar broke the 8 gigawatt (GW) barrier.

The burning of coal, which is the primary cause of global warming, has been on the decline for many years. According to Carbon Brief, an award-winning UK-based website covering climate change and energy policy, coal contributed less than a tenth of UK electricity, slightly less than wind.

Like the largest dinosaurs, the coal industry has put a giant footprint on the planet. This revelation is significant because in recent years the coal industry has played a cancerous role in global environmental problems. Global temperatures have already risen by nearly 1C. Grim externalities on the weather are set to become calamitous unless we track emissions against the crucial 2C global warming limit. The Paris Climate Agreement, an epochal effort that Britain, India, and China signed on, embodied this concern.

coal industry mining

We are now in the final chapter of the story of coal mining, and it is important that we find a way of maintaining living standards while mitigating the impact of our growth on the planet.

Global appetite for coal mining is waning

The hunger for coal in India, China and other developing economies wonโ€™t stop for a long time. However, these countries have very ambitious programs to increase their reliance on clean energy.

Chinaโ€™s coal consumption has unceasingly fallen in the last three years, causing global carbon emissions to dive. This decrease, thanks to Chinaโ€™s new mandatory 58% coal cap target, is projected to continue. India, third in global coal consumption, has seen marginal annual increase in its coal consumption over the last two years.

With its population nearing 1.3 billion, Indiaโ€™s per capita energy use is only 4.5 BOE (barrels of oil equivalent), compared to Chinaโ€™s 15.9 BOE, and United Statesโ€™ ravenous 48.5 BEO. These perplexing disparities are driven by the fact that in China and United States, 100% of citizens have access to electricity compared to a meagre 70% of citizens in India. Moreover, the structure of the Indian economy is such that highly energy intensive Manufacturing industry, constitutes of only 25 percent of economic output, compared to the low energy intensity Service industry, which is about 67 percent. In contrast, manufacturing constitutes of 65 percent of Chinaโ€™s economic output, and United Statesโ€™ 11 percent.

The real killer of coal industry

Coal and other fossil fuels have always been abundant in India and China. A growing middle-class and an ever-growing appetite for energy in these nationsโ€™ means decades of high energy demand. But just because demand will be there, that doesnโ€™t mean these nations will fill it. Currently, the biggest concern is the air quality in its cities. How will India and China manage to grow its economy without sacrificing its air quality?

For starters, both the nations have taken big strides to reduce coal consumption and have been actively closing coal plants. India recently canceled its plans for the 4,000MW Mundra Ultra Mega Power Plant in the state of Gujarat. Recently, India has announced plans to not build any new coal power plants after 2022. Moreover, India plans to generate 57 percent of its power from renewable energy by 2027.

Cumulatively, India and China are the worldโ€™s biggest investors in renewable energy. The speed and magnitude with which the nations are expanding despite setbacks is worth applauding. Looking at the progress, analysts have projected that both India and China will become world leaders in the renewables sector.

We are in the final chapter in the story of coal industry and this is pivotal. The divergence is largely propelled by the needs to take concerted efforts to tackle the climate change problem. The question is, when will U.S. put the lights out for coal mining?

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