2000s >> 2008 >> no-1245-may-2008

Cooking the Books 2: Anyone for coal?

Of the fossil fuels the worst in terms of emitting carbon dioxide into the atmosphere is coal. So, why, if something has to be done to reduce CO2 emissions (as most scientists in the field advise), are plans afoot to reopen coal mines in Britain?

An article “Old King Coal makes comeback in Britain” (18 March) on uk.reuters.com reported:

“Coal mining is making a comeback in Britain as the quest for secure energy supplies chips away at environmental objections and record high prices for the raw material make pits economically viable”.

As the price rises it becomes profitable to exploit more difficult coal seams despite it costing more to work them. Already “two moth-balled deep mines reopened recently, two more were under review and a third working mine was recruiting experienced staff to develop a new seam”.

Capitalist firms are influenced in their choice of fuel by a short-term consideration such as the going market price. Governments can take a longer view, but not that long, a couple of decades at most. In Britain energy policy has been driven by changes in the relative prices of coal, oil and gas. Up to the 1960s coal was massively predominant. Then, when oil became relatively cheaper, the 1964 Wilson Labour government decided to run down the coal industry. Following the Arab-Israel War in 1973, which led to the closing of the Suez Canal, the price of oil soared and Tony Benn, as the Minister of Technology at the time, was able to be appear as the miners’ friend by keeping open pits previously earmarked for closure. It also put the NUM in a position to win two national strikes.

From the 1980s cheap gas from the North Sea became available. The Thatcher government decided to practically close down the coal industry, taking on and breaking the NUM in the process. Even so, there is still a small coal industry in Britain producing 17 million tonnes a year: a further 43 million tonnes are imported.

To combat global warming the government wants to reduce reliance on burning fossil fuels and increase the use of renewable sources of electricity such as wind power. But renewable energy will only take off if it becomes cheaper than fossil fuels (and nuclear power). Currently it isn’t.

The theory is that as oil runs out its price will rise, making renewable sources relatively cheaper. The trouble is that it also makes it profitable to exploit previously marginal sources of oil such as tar sands and oil under the deep sea. And it makes it profitable to exploit marginal sources of coal.

Even if oil does run out, coal won’t. According to the Reuters report, “Experts tend to agree that, with estimated global reserves for 300 years, coal is not going to go away because it is relatively cheap to extract, to burn and readily available despite the dilemma that it is also the most polluting fuel”.

Actually, it’s more readily available in some places than others – in the US and China for instance – and they are not likely to give up the competitive advantage this access to a cheap source of energy gives them.  Which is why they have resisted international arrangements such as Kyoto which seek to make coal-burning relatively more expensive. But even coal-importing countries like Britain are not going to refuse to use coal if it’s cheaper, as can be seen by the government’s recent decision to authorise the building of a new coal-fired power station.

To do otherwise would be commercial madness. Energy enters into the cost of most products,  so to choose a more expensive source would be to make your country’s goods less competitive on world markets.

That no government will do. Under capitalism renewable sources will only be adopted on a wide scale when the price becomes right. But how long will that take? In the meantime coal will continue to be burned.

Leave a Reply