Rumors of coal's demise have been greatly exaggerated

By Jason Hayes
web posted September 29, 2003

In the move toward the provincial election Ontarians have encountered a group of opinion pieces from Ontario Clean Air Alliance (OCAA) Chair, Jack Gibbons. While few would question Gibbon's dedication to the health and well-being of Ontarians, most should question his forecasts on the natural gas resource and the environmental, economic, and social impacts of phasing out coal-fired energy.

Amidst a continuous string of hyperbolic attacks like "dirty coal" and "spewing out smog-causing sulphur", Gibbons' opinion pieces asserted that Ontario's coal-fired energy could be wholly replaced by natural gas by 2010 with minimal cost and no real impacts on energy supply. A recent Toronto Star article highlighting Gibbons and the OCAA even quoted a source, which believes that "coal is already defunct or on the way out in most of the world".

Therefore, the main issues to be addressed in this debate are; the overall cost (economic, environmental, and social) of coal fired energy and the ability to replace coal with natural gas. Does the cost of using coal outweigh the benefits and can other fuels readily replace it as an abundant, affordable and increasingly clean fuel source?

Is coal now "defunct"?

With all due respect to Mr. Gibbons and his research staff, the rumors of coal's demise have been greatly exaggerated. Clearly the death of coal-fired energy is something that Mr. Gibbons would love to see. However, it is unlikely he will get his wish in his lifetime, and with good reason.

A full and honest debate on the various energy sources will show that all energy sources and all forms of generation have costs as well as benefits. There is no one panacea. Hydroelectric generation can flood land and impact riparian ecosystems. Used nuclear fuel requires responsible, long-term management. Natural gas is a very valuable, but very limited fuel that does not simply arrive at the burner tip, but entails the expense and environmental impacts of exploration, development and transportation. Wind turbines are often unsightly and need back-up from conventional energy technologies. Solar cells require the use of toxic chemicals in their construction and can actually use more energy to make than they will ever produce.

The same is true for coal. Yes, it produces emissions but is also abundant, affordable and, as we will see, increasingly clean.

US Department of Energy data shows that coal represents 85 per cent, natural gas 10 per cent and oil 5 per cent respectively of North America's proven hydrocarbon reserves. TransAlta, in 2002 testimony before a US Senate Committee, indicated that Alberta has a 900-year supply of coal versus a 10-year supply of light conventional crude or a 20-year supply of natural gas.

In direct contrast to the OCAA report Gibbons mentions, recent work by Geological Survey of Canada geologist J. D. Hughes quoted National Energy Board forecasts of 3.5 to 5.2 Tcf (trillion cubic feet) in natural gas shortfalls by 2025. Such shortfalls beg the question of how natural gas could possibly act as a cost effective transition fuel for 25% of Ontario's energy.

Even without the forecasted shortfalls, coal is historically cheaper than natural gas and subject to much less price volatility. Coal's delivered price advantage over natural gas is expected to improve over time according to the US Department of Energy. Recent estimates indicate natural gas could cost more than four times as much as coal by 2020.

On the environmental side, results show that coal-fueled generators have made significant investments to improve their environmental performance.

· According to the Ontario Ministry of the Environment's 2000 Air Quality Report "overall air quality in Ontario improved significantly during the past 30 years despite significant increases in Ontario's population, gross domestic product and vehicular travel over the same
period".

· Ontario's coal-fueled generating stations meet about 25 per cent of electricity demand. Investments in low sulphur fuels and pollution control technologies have substantially reduced acid gas emissions at these stations. Total fossil emissions of acid gas were only 37 per cent of what they were in 1983 even though electricity production was almost 14 per cent higher.

Not satisfied with these results, owners of coal-fueled stations are continuing to invest millions of dollars in additional pollution-reduction equipment.

Criticism of coal-fueled generation largely hinges on scientific results selectively presented. The typical anti-coal argument goes like this: "Ontario's poor air quality results in 1,900 premature deaths and costs the health system billions of dollars each year. Coal-fueled generation is responsible for 14 per cent of the province's smog emissions. These plants should be shut down." This argument ignores important facts. Ontario Ministry of the Environment reports clearly show that the province's air quality is affected by both external and internal sources of pollution. More than 50 per cent of the smog precursors affecting Ontario come from US sources. The biggest domestic contributor is our own transportation sector at 32 per cent. By comparison, Ontario's coal-fueled generating stations contribute about seven per cent.

Closing existing coal-fueled plants and replacing them with combined cycle natural gas plants or CCGTs will have significant economic impacts. Ontario consumers will pay $6-7 billion for new CCGTs and pay higher annual fuel costs. They will also face upward pressure on natural gas consumption for home heating. About 70 per cent of Ontario homes are already heated with natural gas. These additional CCGTS will increase Ontario's natural gas consumption by more than 20 per cent; and this does not include the consumption impacts of new gas-fueled generation already on the books.

The debate about coal – and the outcome of that debate – will significantly affect all of us. Let's do it right. We need all the facts, not rhetoric.

Any discussion about coal must include a critical, detailed look at the costs and benefits of all options involved. Any decision about coal must include a comprehensive plan that minimizes these costs and maximizes the benefits. Rushing to close our coal-fueled stations is not the answer, as it will only lead to higher energy prices and reduced competitiveness for consumers and businesses.

Jason Hayes owns and operates Hayes Holdings Consulting, an environmental and technology consultant service, based in Calgary, Alberta.

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