Monthly Archives: September 2012

The latest Coal news

UK shale gas is more lead balloon than silver bullet | Damian Carrington

Fracking’s backers say it will deliver a quick, cheap way of cutting carbon emissions. The latest analysis shows none of these claims stands up

With the UK government expected to give the go-ahead for shale gas exploitation “soon”, it’s a good time to re-enter the smoke and mirrors world of fracking.

There are plenty of people bubbling with excitement at the prospect of the drilling beginning. They argue that shale gas has been the biggest cause of carbon dioxide emission cuts in the US recently, thanks to the replacement of coal. Its cheap too, they say, again pointing again to the US, and there’s a vast amount under our feet here in the UK, just waiting to be freed. Lastly, shale gas is popular with the free market enthusiasts who lambast the subsidies given to renewable energy. Yet not one of these arguments stand up.

Let’s take the emissions cuts first. In May, the International Energy Agency claimed that annual US emissions fell by 1.7% in 2011 “primarily due to on-going switching from coal to natural gas in power generation and an exceptionally mild winter.” The coal-to-gas switch has been driven by gas prices that are falling due to large volumes of shale gas. But a new analysis of US government energy data by Greenpeaces’s upcoming energy news site, Energydesk shows renewable energy in fact played a bigger role than gas in cutting climate-warming gases.

The analysis shows that electricity generation from coal did indeed fall significantly from 2010-2011, by 113TWh. But gas generation rose only by 29TWh. Generation from wind, hydro-electricity and other renewables rose by three times that amount: 92TWh. Looking at a longer period, 2008-11, coal’s share of the US power mix fell by over 6%, while gas rose by 3.3%, Greenpeace found. But renewable generation rose by 3.6% and, given that renewable energy emits far less carbon than gas, again we see that renewable energy is contributing the lion’s share of the emissions cuts. (It’s worth noting at this point that the UK’s renewable energy generation grew by 6.5% in the last year.)

Cheap trick

Fracking’s boosters might well say, forget carbon, shale gas is going to be cheap. Not so, again. “Shale will not be a ‘cheap’ source of gas and there is unlikely to be a repeat of the US experience,” says a new report from the Energy Contract Company (ECC), reported in the FT. In fact, they reach the same conclusion as Deutsche bank had already, and for very similar reasons: tougher regulation, different mineral rights.

The CBI, which represents over 250,000 UK businesses, is also deeply unconvinced about the prospect of cheap shale gas. Its director general, John Cridland, said this week: “Look at European gas price projections. They all disagree on the number, but they all agree on the direction – up. European shale will help, but not on a US scale.”

These arguments appear immaterial to ex-BP boss Lord John Browne, who again used the US example to argue in the FT that “the prize is substantial” if “good practice and the UK’s tough safety regulations mean [fracking] can be performed safely and without endangering water supplies.” What the FT failed to tell its readers in Browne’s article was that he is a director of Cuadrilla Resources Holdings Ltd, the main fracking company drilling in the UK. Perhaps he meant the prize for his company would be substantial?

Ed Davey, secretary of state for energy and climate change, derided Browne’s “regrettably partial” analysis and addressed the myth that shale gas is all set to flow and transform the UK’s energy future: “Until we have more certainty about the potential scale and costs of shale gas production in the UK it is unwise to assume it will be some kind of silver bullet.”

New energy minister John Hayes, who is no green having (wrongly) labelled wind power as a “failure” on both environmental and economic grounds, recently said the same in parliament: “Shale gas in the UK is still in its earliest days; just one well in the UK has been drilled and fracked, and the production prospects are unknown at this stage.” Several geologists have told me that you need hundreds, or even a thousand wells, before you really know how much gas you’re going to get out.

The ECC report projected that shale gas production might hit about a quarter of UK demand by 2030 – the same year by which the UK has to decarbonise its electricity supply, according to the Libdems, Labour and the government’s official advisors, the Committee on climate change.

Hostage to fortune

That, as the Institution of Mechanical Engineers point out in their recent report, means “the development of shale gas must be coupled with the development of carbon capture and storage technology for use with gas-fired power plants.” CCS isn’t going to be cheap and the IME’s Tim Fox added: “UK shale gas could make a helpful contribution to the UK’s energy security, but it is not the silver bullet many claim it is. It is unlikely to have a major impact on energy prices. A general over-reliance on gas will render the UK a hostage to volatile global energy markets, with or without UK shale gas.”

Lastly, let’s tackle the idea that shale gas conquered the US without the huge subsidies critics say are need to prop up renewable energy. “The free market has worked its magic,” the Barnett Shale Energy Education Council, an industry group, claimed in July, reported AP. But again, this isn’t true, as AP’s article goes on to reveal: “Over three decades, from the shale fields of Texas and Wyoming to the Marcellus in the Northeast, the federal government contributed more than $100 million in research to develop fracking, and billions more in tax breaks.”

So there we have it. Shale gas from UK fracking might, with state help and many years from now, produce a relatively small amount of gas, which won’t reduce gas prices and would bust our carbon budgets unless emissions are expensively buried. I am not opposed to shale gas in principle, if all the environmental concerns are addressed, especially methane leakage. But as I think the analysis above shows clearly it’s not so much a silver bullet as a lead balloon.

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UK renewable energy output jumps by 42%

New government figures reveal UK renewable electricity capacity has soared 42% over the past year to 14.2GW

The government has today released its latest quarterly energy statistics, confirming that the UK’s renewable energy sector is continuing to expand rapidly, while also fuelling concerns that high gas prices are forcing energy companies to switch to more polluting coal power.

The statistics from the Department of Energy and Climate Change (DECC) show renewable electricity output during the second quarter of 2012 rose 6.5 per cent year-on-year to 8.13TWh, while capacity soared 42.4 per cent to 14.2GW, largely as the result of the opening of a raft of new large-scale on- and offshore wind farms and the conversion of the Tilbury B power station to dedicated biomass.

The increases meant that renewables’ share of the UK’s electricity mix edged up from nine per cent in the second quarter of 2011 to 9.6 per cent a year later.

The performance would have been stronger still, but low rainfall and winds led to a 31 per cent drop in hydroelectricity production and an 11 per cent drop in power output from onshore wind farms.

In contrast, output from offshore wind farms soared 47 per cent year-on-year to 1.64TWh, bioenergy edged up 6.5 per cent to just over 3TWh and energy from Solar PV and wave and tidal systems increased more than nine-fold to 0.47TWh.

The figures come just days after the UK set a new record for wind power output and mean the UK is now on track to set a host of new renewable energy records during 2012, despite on-going concerns that policy uncertainty is harming investor confidence.

However, the new data will also further fuel environmentalists’ fears that the currently high price of natural gas is driving a new “dash for coal” that is likely to result in a significant increase in greenhouse gas emissions.

DECC revealed gas accounted for 29.8 per cent of the electricity mix during the second quarter, its lowest second quarter share in 14 years, while coal accounted for 36.1 per cent, its highest second quarter share in 14 years. With nuclear’s share of the electricity mix also falling slightly to 21.9 per cent, coal was the dominant fuel source during the second quarter.

There was also a blow for the UK’s energy efficiency efforts, with the figures revealing total primary energy consumption for energy uses rose 6.3 per cent year-on-year. The increase was largely a result of the poor weather, but DECC admitted that even when adjusted to take account of weather differences between the second quarter of 2011 and the second quarter of 2012, primary energy consumption rose by 0.8 per cent.

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Australian ‘mega mine’ plan threatens global emissions target

‘Unprecedented’ increase in the scale of Australian mining would nullify an internationally agreed goal, Greenpeace warns

Plans to open up a new Australian “coal export rush” would turn a single Queensland region into the seventh largest contributor of carbon dioxide emissions on the planet, undermining international efforts to keep global warming below 2C, a new report has warned.

Nine proposed “mega mines” in the Galilee Basin would, at full capacity, result in 705m tonnes of CO2 released into the atmosphere, according to a Greenpeace Australia analysis. This level of emissions would surpass those of all but six nations in the world. By comparison, the UK emitted 549.3 million tonnes of CO2 from all sources in 2011.

Greenpeace said that the nine mines’ production capacity of 330m tonnes of coal a year for export would represent an “unprecedented” increase in the scale of coal mining in Australia. The mines’ maximum output, primarily aimed at servicing the burgeoning Chinese and Indian markets, would nearly double Australia’s total 2010/11 coal production of 352m tonnes and eclipse its export total of 283m tonnes.

The Greenpeace report states that the mines will only be able to launch and operate at capacity if global appetite for coal continues to grow strongly. This scenario would in effect nullify an internationally agreed goal to keep the increase in average global temperatures below 2C from pre-industrial levels.

Greenpeace warns that a growth in coal-fired emissions represented by the nine Queensland mines would be in line with the International Energy Agency’s model of a “catastrophic” 6C rise in temperatures.

“At a time when the science could not be clearer on the need to reduce global carbon emissions, and when governments worldwide are shifting to a low-carbon economy, exploiting the Galilee Basin is a reckless proposition,” the report states. “It is imperative that the Galilee Basin coal reserves remain in the ground.”

The Alpha coal mine, a joint venture between Indian conglomerate GVK and Gina Rinehart’s Hancock Coal, last month became the first major Galilee Basin project to be given state and federal government approval, despite protests from environmentalists and farmers.

The mine, which will bring an estimated AU$1bn (£642m) into the Queensland economy, will have the capacity to create 64.7m tonnes of CO2 – the equivalent of Israel’s entire 2009 emissions from fuel combustion.

The other eight mines are yet to be given the green light by ministers. Adani, another Indian mining firm, hopes to build a new town for 12,000 people to service its big Carmichael mine, which would produce up to 60m tones of coal a year.

Greenpeace’s report argues that the expansion in Queensland coal mining will damage the nearby Great Barrier Reef through coral bleaching from increased temperatures, but also in the shorter term due to the development of new ports and shipping lanes in order to transport the coal overseas.

In June, a UN report expressed “extreme concern” over the level of development along the Great Barrier Reef coast, calling for all building to cease until an assessment of the ecosystem’s health was carried out.

The Greenpeace Australia campaigner Georgina Woods, author of the new coal report, said: “Australia has just pretended up until now that coal exports aren’t part of the problem but it’s time that we started talking about it if we want to keep treasures like the Great Barrier Reef.”

“These proposed mines need to be taken off the table and development along the Great Barrier Reef coast needs to be ruled out. The topic of coal exports is a very immature conversation in Australia but we need to start that conversation.”

Australia is itself a heavy user of coal, as well as a leading exporter. Although the country has committed to cutting its own carbon emissions by 5% on 2000 levels by 2020 and introduced carbon pricing in July, the federal government has been accused of botching its attempts to move the country away from fossil fuels. This month, the government abandoned plans to pay five of Australia’s dirtiest coal-fired power generators to close down, despite already handing them $1bn in taxpayer money to cushion the impact of carbon pricing.

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