Trumped By Gas
WHEN the United States GOT FRACKING NOT EVEN THE PRESIDENT COULD SAVE COAL. By NICK CATER
The news that two more coal plants are about to close in the US would have been unwelcome at the White House.
Despite the President’s “best endeavours”, the carbon footprint of the average American continues to shrink. More than 46,000MW of coal-fired generator capacity will have disappeared by the end of his term, the equivalent of almost twice the entire capacity of Australian coal plants.
It is hard to see what more Donald Trump could have done. He has neutered the Environmental Protection Agency, ripped apart his predecessor’s Clean Power Plan and given the finger to the Paris Agreement. Yet he has failed to revive the fortunes of coal, despite his solemn promise to miners in Virginia on the campaign trail in May 2016.
Trump should have known that you can’t fight the market. The fracking revolution means coal can no longer compete on price with gas, which emits half the CO2 and a 10th of the pollution.
The same thing might well have occurred in Australia, if state governments had not been spooked by fracking.
It might have helped if they had done the right thing by landowners and offered them a share of the royalties for allowing drilling on their land. The shabby treatment of farmers as third parties in dealings between the Queensland government and gas companies created a potent alliance of farmers and environmentalists, which other state governments have been wary of confronting.
The result of the ill-considered moratorium on fracking and all forms of gas extraction in Victoria is that natural gas is in short supply on the east coast, forcing up the cost. Coal has unwittingly been priced back into the market.
In the great tradition of well-meaning governments achieving the opposite of what they set out to do, the state of Victoria will emit more CO2 this year than it would have done if the market had been allowed to operate freely.
Victoria’s three remaining coal plants, Yallourn, Loy Yang A and Loy Yang B, would probably be toast by now if the state government had allowed enterprising prospectors to develop gas holdings, making gas a viable competitor into the National Energy Market.
A reliable supply of cheap gas in a competitive market would not only hasten the end of coal, it would stabilise the grid and allow renewables to thrive. Gas, with its ability to fire quickly, can provide back-up more easily than coal when the output from wind and solar plants falls.
The former South Australian Labor government might not have had to shell out for Elon Musk’s battery, or scour the planet for spare diesel generators when the Northern Power Station closed prematurely, if it had not artificially constrained the development of gas.
The switch from coal to gas around the world, principally in the US and China, has been a game changer. It has saved about 500 million tonnes of CO2 over the past 10 years, according to the International Energy Authority, the equivalent to putting an additional 200 million electric vehicles on the road, assuming they run on zero-carbon electricity.
Emissions from the US energy sector are 27 per cent lower than they were in 2005, despite the robust growth in the economy. It puts the US on a plausible track to meet the Obama administration’s Paris target if it still cares about that kind of thing.
While it won’t be enough to bring a smile to Greta Thunberg’s pursed lips, the US has achieved bigger savings than other developed economies. It is doing better than Germany, Japan, Canada and New Zealand.
In today’s climate debate, however, there is increasingly little space for pragmatism. The absolutism of our times demands a clean economy, rather than an economy that becomes cleaner over time. Activists insist on renewable energy targets rather than cleaner energy targets. They demand we set a target date for zero emissions without the foggiest idea how to get there.
It was not always so. In the calmer conversations we were having before Al Gore interrupted by reinventing himself as a scary movie maker, the transition to gas was widely regarded as the first step towards a solution.
Today gas has become the target of crass campaigns that make it out to be the problem, lumping it together with coal under the disparaging term “fossil fuel”.
Pressure on investors will curtail the use of gas prematurely unless sanity prevails. Last week’s announcement by BlackRock, the world’s largest fund manager, that it would stop investing in coal did nothing to appease the critics.
“We’ll need to push BlackRock to move away from not only coal but all its climate-destabilising investments, including oil, gas and companies whose operations threaten to turn the lush Amazon into a savanna,” insisted Michael Brune, the executive director of the Sierra Club.
Let us assume for a moment that Brune genuinely hankers for a cleaner economy and is not, as so many climate activists patently are, pursuing a darker agenda. Let us assume he genuinely wants to clean up the planet one tonne of CO2 at a time, and that he gets Voltaire’s point that the perfect is the enemy of the good.
What can he hope to achieve by encouraging a flight of capital from natural gas beyond delaying the transition to a low-emission economy? Fracking has reduced CO2 emissions in the US 10 times faster that two other imperfect technologies, wind and solar, according to a report by the Manhattan Institute.
Rather than bank the dividend, the climate-explains-everything movement has fallen for the nirvana fallacy, the belief that the perfect solution to a particular problem is to hand. It permits the creation of a false dichotomy between the imperfect and the implausible.
Natural gas will not be the energy source that gets us to zero emissions, barring a breakthrough in carbon capture and storage. In the words of the old jazz classic, however, “If that isn’t love it’ll have to do, Until the real thing comes along”.