A mighty American giant has fallen. Earlier this month, the largest private coal company on the planet, Peabody Energy (which in 2008 had a market cap of $20 billion) declared bankruptcy.
Though the news made headlines across the country, it is just the latest development in a nearly decade-long shift from coal. One of the most entrenched, politically powerful and polluting industries is seeing an unprecedented financial collapse, driven by climate realities but also as the result of impressive grassroots activism that is transforming political realities across the country.
“Peabody’s bankruptcy does not necessarily mean the end of coal is nigh, but I hope it will be taken as a sign that we need to act swiftly to end the era of burning fossil fuels, which has unleashed climate chaos that our kids will inherit,” said Kim Knowlton, deputy director of the Natural Resources Defense Council’s science center.
Still, it’s hard to overstate how big this shift is. The United States is routinely called the Saudi Arabia of coal, and for good reason. We have more coal than any other country; 28 percent of global recoverable coal reserves, 260 billion short tons in total – much of which, even today, remains underground. Cheap, plentiful coal was the foundation of the American industrial revolution, the energy source that powered Detroit’s automakers, Pittsburgh’s steel plants and textile factories across the country.
King Coal Is Losing Its Kingdom
Around the turn of the century, coal was huge. The industry had a firm grip on our power generation, providing more than 50 percent of our electricity needs, and was the chief reason America was the world’s top greenhouse gas emitter. Big coal was also key in lobbying against climate bills in Congress and America’s participation in the Kyoto Protocol.
“The fossil fuel industry had a stranglehold over our economy,” Lindsay Meiman, a spokesperson with 350.org, told Planet Experts. “The industry had a key role in blocking climate action.”
Even increasing scientific certainty about anthropogenic climate change couldn’t – on its own – make much of a dent in the coal industry’s power. During the George W. Bush presidency, the industry embarked on massive plans to build over a hundred new coal-fired power plants across the country, expand liquification facilities so that coal could become an alternative to petroleum and build massive export ports along the western United States so that American coal could power new plants planned in Asia – particularly, coal-hungry China. Had these plans gone through, they would have tied America’s energy base to coal for 50 years or more (the typical lifetime of a coal-fired power plant) and would have doomed the global climate.
But around this time, something began to change. Activists challenged big coal, successfully stopping construction of those proposed plants. Then, around 2010, they shifted their attention to shutting down existing plants.
“The factor that changed everything was grassroots power,” said Mary Anne Hitt, director of the Sierra Club’s Beyond Coal Campaign. “Very geographically dispersed coalitions were winning in places like Kentucky, Iowa, Texas, Indiana, each with its network of grassroots heroes and leaders.” It was a bottom-up movement, where environmentalists worked with justice organizations, community leaders and organized labor, winning in states where environmental activism is not a given.
For Big Coal, Reality Bites
One thing that activists had on their side was reality.
Coal is one of those rare commodities that is dirty and polluting at just about every stage of production, processing and disposal. Mining destroys mountains in Appalachia, and leaves waste in massive dams, which are prone to break, and happen to be located mostly near poor or minority communities. Coal’s transport has been linked to breathing issues due to particulates escaping from carriages and trucks. Burning emits not only huge amounts of greenhouse gases but also mercury, sulfur and other harmful pollutants.
With these dirty strikes against it, initiatives to oppose coal power picked up momentum. While strong renewable energy standards were passed in states across the country, grassroots activists prevented coal plants from receiving permits or avoiding pollution controls. Meanwhile, the divestment movement made banks, insurers and other investors wary of putting money into coal. These actions contributed to a string of coal bankruptcies that culminated with the former King of the industry, Peabody, going under this month.
The collapse of coal has caught financial analysts by surprise, yet some believe that this is merely a temporary lull, akin to what petroleum saw in the late 90s when it was at just $18 a barrel. With time, perhaps, coal, like petroleum, will return to higher prices and once again be a competitive global energy source.
“Coal is certainly a thing of the past,” said Meiman. “Considering it a part of our energy future is dangerous point of view.”
Unfortunately, many pension managers and investors haven’t gotten the memo. Even endowments from organizations that have fighting climate change as a stated goal, such as the Bill and Melinda Gates Foundation, continue to invest in coal. According to Hitt, they are missing something very key.
“We’re not just going to turn those coal plants back on,” she said, “because this not just a shift of electrical power, it’s a shift of political power.”
Coal Isn’t Giving Up the Crown Without a Fight
The movement against coal isn’t finished, but there are ambitious plans to ensure that the U.S. gets closer to a truly coal-free future.
“Our goal is to get 50 percent of all coal plants [in the United States] having announced they will retire, by 2017,” said Hitt. “It’s a very big reach, but that’s the kind of progress that not only climate science demands, but communities suffering [from coal’s impacts] also demand.”
Globally, there is also encouraging action. China has sharply dropped its coal imports, while, earlier this year, Vietnam announced that it is abandoning its previously ambitious coal power plant plans in favor of investment in renewable energy. India’s coal imports dropped by a much-higher-than-expected 35 percent last year due to massive oversupply and a quicker-than-expected expansion in renewables. That’s why there is a massive global coal glut, despite the fact that prices have dropped from $200/ton in mid-2008, to below $50/ton today.
The end of coal is within sight, both in America and abroad.