Some Still Love Coal as Exchanges Battle to Dominate Market | Hacker News Reader

Some Still Love Coal as Exchanges Battle to Dominate Market

bloomberg.com

21 pointsjessecred16 comments

Something that most people will miss in this article is the acquisition of Trayport by ICE. Trayport is a UK based software company which provides the technological trading backbone for the European OTC Natural Gas and Power markets as well as global Wet/Dry freight, Iron Ore and Coal.

The financial coal market has found great success on Trayport which facilitated increased clearing volume for both CME and ICE. Most volume is traded OTC. This partially explains why ICE bought them. Another reason is likely because ICE wants to get into markets which have been primarily broker led, and historically powered by Trayport's network.

Coal is cheap and plentiful. It does have one of the highest carbon densities relative to energy produced, but there are developing ways around that:

Capture and sequestration

-CO2 from large source power plants is scrubbed from emissions, captured, and stored underground

-In some cases, this can be used to make oil wells more productive (and is economically positive, without considering carbon taxes or credits)

-There are some questions around long-term durability and resistance to leaking of underground storage

https://en.wikipedia.org/wiki/Carbon_capture_and_storage

Coal Gasification

-Convert coal to natural gas, which has a higher energy to CO2 ratio

https://en.wikipedia.org/wiki/Coal_gasification

I'd be more put off coal by low energy (oil) prices at the moment, but these will turn around on a longer time scale.

You leave open a lot of questions. What longer time scale? A decade, perhaps two? How developed are the newer coal technologies? My understanding is that they're extremely expensive. No one is doing carbon capture commercially?

Even ignoring global warming, coal is a dirty source of energy. It's one of the main reasons the air in China is so bad.

I can't comment on China - my guess is their regulations on things other than CO2 (sulfur oxides and nitrous oxides mainly) is probably also more lax than Europe and North America. Scrubbers exist for both of these and are used EU/NA. Yes these are more expensive.

Time scale - hard to say. I would think at $100 oil, coal is very competitive even with scrubbers, capture, and sequestration. At $30, probably not. Oil prices are more determined by politics than industry, but there seems to be a ceiling of $60-70 where a massive supply of non-conventional oil becomes economic.

There has been a commercial carbon capture and storage facility in Canada since 2000, which takes CO2 from plants in North Dakota. There are about 75 projects worldwide using CCS, in various stages of development. https://en.wikipedia.org/wiki/Weyburn-Midale_Carbon_Dioxide_...

So for time scale, it is already being done. For wider adoption, probably we are looking at ~10 years, as data is still being collected and these projects are large undertakings. But CCS in particular is one of the few approaches that can actually scale to make a sizable dent in CO2 emissions.

I'm not sure why you keep comparing oil and coal. For the most part, they don't compete. They're used for entirely different things. Very little electricity in in US is generated with oil, for example:

https://www.washingtonpost.com/graphics/national/power-plant...

At $60 dollars a barrel coal can be profitably converted into oil. Germany did it in WWII and South Africa's Sasol refined the process during the embargos.

You're right. As soon as oil returns to $100, we'll be seeing coal-powered autos.

Coal is not cheap. Accounting for externalized environmental and health costs, coal is more expensive per kWh than solar or wind. Failing to internalize those externalities is a $300-500 billion annual implicit subsidy in the United States alone: http://www.chgeharvard.org/sites/default/files/epstein_full%...

Widespread CCS is also science fiction at this point, and does not address the primary harm from coal: particulate matter and heavy metals. Coal use is extremely expensive even if you ignore carbon dioxide emissions.

Don't forget underground coal fires! Some of the thousands of coal seam fires burning today will continue for centuries, releasing CO2 (up to 3% of global emissions) and sweet, sweet mercury into the atmosphere.

The cost comparison is flawed if it is accounting for secondary costs of coal, but not solar or wind. (Which will probably be lower than coal, although perhaps not if accounting for vast land areas needed for generation and some rather nasty materials used in solar).

Does solar and wind have capacity to replace fossil fuel demand? These also have limitation is ability to match production to demand - perhaps storage technologies will reduce this limitation.

My understanding is current technologies in scrubbers can do a quite good job of removing particulates, and probably improve further with gasification. Not as familar with heavy metals.

The question the original article raises is why, when energy production is more sensitive to environmental issues, would people invest in coal. My points are that there are developments that could in the future lead to a much cleaner coal. Science fiction can and often does become reality.

I believe you're making the wrong comparison.

Coal is not to be compared to wind and solar. Coal is to be compared to natural gas. Natural gas produces far less CO2 per MW generated, and can be throttled quickly at combined cycle generation facilities. Coal _should_ be deprecated quickly for natural gas, as natural gas can backfill solar and wind generation. Coal is now down to about 30% of US generation capacity, and will continue to dwindle as coal plants are decommissioned or retrofitted to burn natural gas.

As wind and solar continue to be deployed (which will only speed up with the 5 year production tax credit extension in December 2015), natural gas usage can be reduced (or even eliminated with utility scale battery storage).

> The question the original article raises is why, when energy production is more sensitive to environmental issues, would people invest in coal. My points are that there are developments that could in the future lead to a much cleaner coal. Science fiction can and often does become reality.

Clean coal has _never_ been proven to be cost competitive [1].

[1] http://energy.gov/fe/science-innovation/clean-coal-research/...

Doesn't it also contain other trace elements that we generally don't want in our air? It's not just carbon

The previous Prime Minister of Australia is on record as saying that coal is good for humanity.

Then again, he is also on record as saying global warming is "crap", that a tax on carbon seemed like a good idea and then immediately scrapped it, knighted Prince Phillip and once ate a raw onion on TV. Go figure.

Coal was one of two available and abundant energy sources for most of the past 200 years (the other being oil). Without coal humanity's development could not have accelerated as quickly as it has in the past few generations. Without energy, you don't have an economy and without an economy, you don't get the amazing advances in medicine, technology and standards of living that we've seen in the 20th century.

The Prime Minister wasn't necessarily wrong.

Not disagreeing, but it also has some terrible downsides. We have much cleaner energy sources now, so it's not so good for humanity now!

Good BBC Radio 4 documentary on this topic, earlier this week: http://www.bbc.co.uk/programmes/b070dkt9

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