A Balanced Energy Future

Energy is fundamental to life: it lights our cities and neighbourhoods; powers our daily work and commute; and heats and cools our homes, cooks our food, brings us entertainment and helps us lead productive lives.

On a planet with a population of 7 billion – and one that continues to grow – energy drives prosperity and fuels progress around the world. And we need all forms of it, including fossil fuels.

The bulk of population growth is occurring in developing countries as they sprint toward industrialisation and beyond. Developing countries are relying on fossil fuels because they are abundant and cost-competitive. Hence, China is not so much a leader in green energy as it is a leader in the global race for oil, coal and natural gas.

By 2050, the number of US inhabitants – and therefore energy consumers – is expected to increase by 139 million people, representing 50% growth since the 2000 census. It will need a full and robust portfolio of complementary energy sources to fuel progress and sustain a vibrant economy for a growing population. That portfolio must not only be diverse enough to meet its growing needs, but secure enough to assure reliable, uninterrupted access.

The US has the good fortune to be endowed with a range of plentiful energy reserves, meaning it can be largely self-reliant under the right energy policies. For example, since more than 95% of coal consumed in the US is mined within its borders and, as long as those resources can be accessed and used with reasonable regulatory controls, its abundance means the country cannot be held hostage by foreign embargoes, cartel pricing or the threat of blockade.

Peak theories

Many have used specious “peak” theories about our fossil fuel supplies to sway energy policy. They would have Governments, rather than the free market, dictate the energy freedom and choices consumers should have. 

Yet in the US, the argument that we are exhausting our energy sources because of inadequate supply is false at best. The US’s recoverable oil, natural gas and coal deposits are the largest on Earth. Meanwhile, Government policies are being built on outdated assumptions about recoverable energy resources.

For example, in 1980 the US Government estimated that the country had 30 billion bbl of proven domestic oil reserves. Yet over the next 30 years, as drilling technologies evolved, the US recovered over 77 billion bbl of oil – more than twice the country’s supposed reserves. According to the Institute for Energy Research, the amount of oil that is technically recoverable under US soil now totals more than 1.4 trillion bbl, and for North America as a whole, 1.7 trillion bbl. That is more than the entire world has consumed since the first oil well was drilled in Pennsylvania 150 years ago.

So, too, with natural gas. Believing that gas supplies had peaked and were in decline, the US Congress passed legislation in 2005 to speed construction of LNG terminals so more foreign gas could be imported. Yet technological innovations that started to ramp up at the end of the decade made extraction of natural gas from shale and tight formations remarkably fruitful and economical. The result? By 2010, total natural gas resources under US soil were at the highest levels in the 46 year history of the Potential Gas Committee, the nation’s authoritative source for reserve estimates.

Peak theories about coal are the latest rage. In fact, the US’s recoverable coal reserves exceed that of any other country and account for 28% of total reserves worldwide. At current consumption rates, the US has more than 200 years’ worth of economically recoverable coal using today’s mining technology. And as technology improves, we will be able to access even more of our coal resources. Recent geological surveys indicate that more than 4000 years’ worth of coal exists beneath US soil (not counting Alaska’s vast resources, which are more than 60% greater than those in the lower 48 states). With 40 centuries of coal resources, we are hardly at our peak.

The bottom line: coal is key to our energy independence, providing a baseload source of electricity that is always on in the US. 

There is simply no other way to secure the future energy needs of a nation and the world without continuing to use fossil fuels – all while continuing to be responsible to our planet and environment by introducing cleaner, more efficient technologies.

Clean coal

Coal-fired power has become considerably cleaner and will continue to get cleaner. The US Environmental Protection Agency (EPA) statistics show that over the last decade, SO₂ emissions from coal-fired generation declined by 52% while NOx emissions fell by 58%.  This is one reason that no US city ranks in the top 50 worst-polluted cities worldwide, according to the World Bank.

A coal-fired power plant built today can remove up to 99% more controlled pollutants than one built 40 years ago. Dominion Virginia Power is completing its new 585 MW Virginia City Hybrid Energy Center. For the next 45 – 50 years this power plant is expected to supply electricity to 146,000 homes, while releasing less than 1% the amount of mercury and SO₂ emitted by a typical pulverised coal unit built in the 1960s.

To serve their customers’ growing energy appetite – an additional million households by 2017 – Dominion fully recognises the need for reliable baseload coal-fired generation as part of a full portfolio of choices, which includes renewables, nuclear and gas as well. As Paul D. Koonce, CEO of Dominion recently wrote, a balanced approach “is necessary to protect the environment, keep rates low and reliability high and support economic growth.”¹

Whether in our back yard in Virginia or in China or India, coal and fossil fuels have an indisputable role in a broad portfolio of energy choices that will fuel progress for the growing human race. Energy producers must work together to assure that the generations to follow continue to have access to all these vital sources of energy.

References

1. http://www.washingtonpost.com/opinions/the-right-energy-mix-for-virginia/2012/01/06/gIQAY9EmfP_story.html

Author

Kevin S. Crutchfield has been CEO of Alpha Natural Resources since July 2009. He joined ANR in 2003 and was named president in 2007, and has over 25 years of domestic and international experience in the industry, including a number of senior management roles.

This article first appeared in the July 2012 issue of World Coal. Subscribers can log-in to view the issue online.

Read the article online at: https://www.worldcoal.com/coal/11072012/alpha_natural_resources_balanced_energy_future/