A coal train crosses the northern plains near Lethbridge, Alberta. U.S. exports of coal are at an all-time high and could rise higher as domestic utilities switch to natural gas. Experts say the country is simply shipping pollution associated with coal overseas. Image: Flickr/urbanworkbench
LONDON – The good news is that U.S. greenhouse gas emissions are continuing to decline. "Over the last four years, our emissions of the dangerous carbon pollution that threatens our planet have actually fallen," said President Obama in his State of the Union address last month.
The bad news is the United States is exporting its polluting gases, particularly in the form of coal, like never before.
Figures released earlier this month by the U.S. Energy Information Administration show U.S. coal exports reached a record of more than 115 million tons in 2012, more than double the 2009 figure.
In a report examining the legal implications of increased U.S. coal exports, the Columbia Law School notes that greenhouse gas emissions are not just a national issue.
"Because the impacts of CO2 emissions are global in nature, it makes no difference from a climate change perspective whether coal mined in Wyoming is consumed in Chicago or Shanghai," it says.
Higher levels of CO2
Coal is far more polluting in terms of greenhouse gases than either oil or gas, emitting higher levels of CO2 and also other toxic substances such as sulfur dioxide, nitrogen oxide and mercury.
The drop in U.S. emissions – according to the EIA, total U.S. carbon emissions have now fallen by more than 8 percent since peaking in 2007 – is in part due to the economic slowdown, but more so to a move from coal-fired electricity generation to less carbon-intensive natural gas, particularly gas produced from hydraulic fracturing or "fracking."
In 2005 coal accounted for half of all electricity generation in the United States: now it generates 37 percent of the country's electricity, with forecasts that figure will drop to around 20 percent by 2030.
The move to gas has been spurred both by tougher regulations on pollution and, with gas production booming, an overall drop in energy prices. There has also been strong growth in renewable energies, particularly in solar power.
Unfazed by domestic decline
U.S. coal giants such as Arch Coal, Alpha Natural Resources and Peabody Energy have not let the decline in domestic demand faze them. Instead they've gone wholesale into export markets, particularly in Europe, with coal-exporting terminals on the U.S. East Coast operating at maximum capacity.
High gas prices within the European Union make U.S. coal extremely competitive as an energy source. Bad weather has contributed to an uptake in demand.
The collapse in price on the EU's European Trading Scheme carbon market and a vast oversupply of so-called pollution permits is another reason for the surge in U.S. coal imports. Worries about energy security and an over-dependence on gas supplies from Russia and the countries of central Asia are additional factors driving the trade.
EIA figures show Europe is now by far the biggest customer for U.S. coal, importing more than all other markets combined. U.S. exports to the UK jumped by about 70 percent in 2012.
Exports to Germany, which phased out nuclear power generation in response to the Fukushima accident in Japan, have also increased.
Europe's energy companies are taking advantage of relatively cheap coal imports while they can. EU regulations, particularly the Large Combustion Plants Directive, stipulate that older coal plants that do not meet stringent emissions targets must be shuttered.
While tighter regulations on pollution could result in a decline in U.S. coal exports to Europe in the years ahead, it's unlikely producers in Pennsylvania or Montana will be cutting back on their activities. Asia, by far the biggest coal-consuming region, where demand continues to grow, is the next target.
The United States is the world's fourth largest exporter of coal – after Australia, Indonesia and Russia. U.S. firms are now setting their sights on the big markets in Asia, particularly China and India.