Global Warming: Can We Find Common Ground?
2004 ANNUAL REPORT
2004 ANNUAL REPORT
Look at what is happening in China. Its economy is booming. China’s coal exports are declining as their consumption grows. Electricity demand in China is expected to triple between 1995 and 2015. More than 560 new coal-fired generating plants are planned by 2015. Will these plants be built with CO2 reduction technology or with old technology?
Increased worldwide demand for coal has driven up coal prices. The United States produces more coal than it needs, but not a lot more. We have the capacity to expand production, but it takes several years to ramp up to meet new demand. Ramesh Malhotra, who buys coal from and sells coal to Cinergy and others, predicts coal prices by using his “misery index.” He expects higher coal prices when the weather is extremely hot; or when rivers are frozen making deliveries difficult. Most utilities buy 60 percent of their coal under long-term fixed contracts, but the rest is bought in the volatile spot market. That’s why electric consumers often feel the pinch when prices rise.
Malhotra believes global warming is real, but he’s not sure how global politics will affect our actions. Just as in the past, when crisis spurred invention, he expects we will find new ways to burn coal and reduce CO2.
Irl Engelhardt, the chairman of Peabody Energy, is a strong proponent of developing technologies to burn coal more efficiently and cleanly. He remembers the public support behind the United States’ goal to be the first nation to put a man on the moon. With the same kind of broad-based support, he believes we can win the technological race to develop clean-burning coal technologies.