Tue July 29, 2014
As U.S. Exports Coal—and Pollution—Where Does That Leave Kentucky?
Here’s what’s not up for debate: Eastern Kentucky coal production has plummeted over the past several years. In 2000, the region mined just over 106 million tons of coal. Last year, production was below 40 million tons.
The reasons for that decline are numerous and complicated.
It’s getting more expensive to mine coal in Eastern Kentucky, as easily-reachable reserves are depleted. Power plants are favoring cheaper, high-sulfur coal from the Illinois Basin and Powder River Basin. Natural gas is more competitive. And environmental regulations have also played a role—and will continue to play a role as the Environmental Protection Agency finalizes its regulations on carbon dioxide emissions.
One constant refrain from the state’s coal supporters has been that the Obama Administration’s actions to reduce carbon dioxide emissions are useless; as the U.S. burns less coal, more of that coal is sent overseas, where emissions controls are more lax.
That’s not necessarily an argument for doing nothing to reduce the country’s CO2 emissions, but data included in an Associated Press article published yesterday suggests that some of the coal the U.S. isn’t burning is going elsewhere.
What’s still not clear is where Kentucky’s coal industry fits into that equation.
According to an AP analysis of Energy Department data, the U.S. has cut coal consumption by 195 million tons over the last five years. And 20 percent of that coal has been shipped overseas. This raises some tough questions for Obama, as the EPA pursues climate change regulations.
This fossil fuel trade threatens to undermine President Barack Obama’s strategy for reducing the gases blamed for climate change and reveals a little-discussed side effect of countries acting alone on a global problem. The contribution of this exported pollution to global warming is not something the administration wants to measure, or even talk about.
“This is the single biggest flaw in U.S. climate policy,” said Roger Martella, the former general counsel at the Environmental Protection Agency under President George W. Bush. “Although the administration is moving forward with climate change regulations at home, we don’t consider how policy decisions in the United States impact greenhouse gas emissions in other parts of the world.”
Over the past six years, American energy companies have sent more coal than ever before to other parts of the world, in some cases to places with more lax environmental standards.
The consequence: This global shell game makes the U.S. appear to be making more progress than it is on global warming. That’s because it shifts some pollution — and the burden for cleaning it up — onto other countries’ balance sheets.
“Energy exports bit by bit are chipping away at gains we are making on carbon dioxide domestically,” said Shakeb Afsah, an economist who runs an energy consulting firm in Bethesda, Maryland.
So, that’s what appears to be happening on a global level. But are these increased exports helping the beleaguered Eastern Kentucky coal industry—which, as of last December, I projected would lose 35 percent of its current customers as power plants in the region were retired or switched to natural gas?
It’s tough to tell.
Here’s what we know: according to federal data, Kentucky’s coal exports are the highest they’ve ever been (or at least since 2001, which is the earliest data available). And as you can see on this graph, Eastern Kentucky coal exports were a lot higher than Western Kentucky exports in 2012.
But there’s a sort of wonky problem with federal export data. The Kentucky Energy and Environment Cabinet maintains a wealth of data about coal in the commonwealth, but there’s a hole when it comes to quantifying how much Kentucky coal is exported overseas.
The EEC relies on data from the federal Department of Energy and the U.S. Census. And when you look at the numbers—Kentucky’s total production minus coal used domestically minus foreign exports—they don’t add up. Aron Patrick of the Department for Energy Development and Independence says there’s some “lost coal” there.
That’s because the federal data only counts coal that’s loaded onto a barge in Kentucky and shipped overseas as “foreign exports.”
If, say, it’s loaded onto a train and shipped to New Orleans, where it’s unloaded, mixed with other coal, and then loaded onto an ocean liner for export, the government counts that as Louisiana coal.
Patrick says the EEC is working on a way to get a more accurate picture of how much Eastern and Western Kentucky coal is being shipped overseas. But historically, coal exports have accounted for a relatively small percentage of Kentucky’s coal production. So, it still remains to be seen whether other countries demanding—and burning—American coal will have any effect on the state’s coal industry.