What will the rise in coal prices mean for Europe, Russia, China and beyond?
Are we going to be burned with coal? James Hansen's Diplomatic Note
The price of coal on international markets has been rising for 24 weeks in a row. The benchmark – the benchmark commonly used in world trade – is Australian coal called “Newcastle thermal”. It has risen 400% in a year and lately the price is growing at a rate of 12% per week.
The immediate cause is stellar prices – and sheer scarcity – of natural gas.
These incentivize the return to the much-maligned "more polluting" source of energy, coal precisely, which we thought belonged to the past. According to IEA-International Energy Agency data, the price of natural gas in Europe and Asia increased tenfold between October 2020 and the same month of this year.
This is obviously excellent news for coal producers, but much less for the rest of us, especially with what looks like the imminent arrival of a new "energy crisis" that will greatly increase the cost of home heating and good part of industrial production. It also means that, in fact, the "revolution" of renewable sources has failed, at least for now. It is the confirmation that, therefore, it cannot be counted on.
The immediate blame will be placed on Vladimir Putin, who has dramatically reduced Russian gas supplies to Western Europe. This is in an attempt to oblige Germany and the EU to proceed with the immediate authorization of the entry into service of the Baltic Nord Stream 2 gas pipeline without taking into account the European “green” legislation. But Europe is not the world and this is only part of the story, not even the most important.
Much is due – perhaps obviously – to the economic disturbances caused by Covid, to the interruptions in logistic chains and also simply to the weather, which in some important countries has denied wind turbines the wind that had to make them run properly. Part of the blame is human, ours and of the government organizations that – convinced that it was enough to decree the victory of the green revolution to accomplish it – have attempted a series of steps longer than the leg in the field of energy, introducing heavy tax burdens on conventional energy production. and closing existing plants without waiting for valid alternatives.
Even "coal" China had eventually aligned, closing down vast production mines in Shanxi just in time for the coming crisis. There, according to Reuters , four extraction plants with a total annual production capacity of 4.8 million tons have been closed. Chinese coal imports increased by 76% in September alone.
What to do then? For the foreseeable future, we can grit our teeth and hope this misfortune passes too — and it won't be too cold this winter. In the meantime, the reasons that spur the search for alternative forms of energy supply are absolutely valid. However, it would be good to try – before going too far – to learn not to confuse our noblest ambitions with accomplished facts.
This is a machine translation from Italian language of a post published on Start Magazine at the URL https://www.startmag.it/energia/carbone-aumento-prezzi-conseguenze/ on Sun, 17 Oct 2021 06:08:36 +0000.