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In defence of coal

Peabody Energy CEO Gregory Boyce Discusses Coal's Role in the Fight Against Energy Poverty


The coal industry has a public-relations problem: Although coal remains the biggest source of fuel for generating electricity in the U.S., its adversaries say it's just too dirty and just too damaging to the environment.

Peabody Energy Corp.'s Gregory Boyce, chief executive of the largest U.S. coal producer, sees things differently. In an interview with Wall Street Journal Assistant Managing Editor John Bussey, Mr. Boyce argued that reducing emissions isn't the only thing the world should be worrying about. Lifting the global poor out of poverty is critical, too, he said, and coal can play a role in that. Here are edited excerpts:
Too Dirty?

JOHN BUSSEY: Can you give us the lay of the land of coal usage in the U.S. and globally?

GREG BOYCE: Many people view coal as something that we don't use anymore or that we are racing away from. But coal generates 44% of the electricity in the U.S., and it is still a massive baseload supply of low-cost, reliable, nonvariable energy for our electricity grid. Globally, it has been the fastest-growing fuel over the past decade. In the next three years, the International Energy Agency projects that coal will be the single largest source of energy in the world.

MR. BUSSEY: Gas has half the carbon footprint of coal. Even with gas prices ticking up, isn't it inevitable that political pressures, environmental pressures, even business pressures will take into account that difference and say, "Coal's just too dirty?"

MR. BOYCE: You need to look at the life-cycle emissions of any fuel, [not just emissions at the point of generation]. And if you look at the life-cycle emissions of the production, transportation and use of gas, it is much closer to the performance of coal.

You have to look at methane leakage, particularly from unconventional gas drilling, as well as the energy it takes to transport gas through pipelines.

MR. BUSSEY: Let's talk about Europe, where we've seen an uptick in coal usage. There are some very interesting geopolitical issues at play. It's Ukraine. It's Crimea. It's Europe's realization, again, that it's so dependent on Russia for gas.

MR. BOYCE: Whether you're looking at a utility region, a country or whether you're looking globally, we need a balanced portfolio of energy—we need solar, wind, renewables, gas, coal. The only way to reduce risk in these energy portfolios is to make sure we're using all forms of energy.

When we say we're going to eliminate a fuel source and we're going to go to another predominant fuel source, we are setting ourselves up for disaster from an economic perspective. And when we have a disaster from an economic perspective, it doesn't matter how hard we try, we aren't going to get where we want to get on the environment.

Energy Inequality

MR. BUSSEY: You also make a different argument, one related to what you refer to as energy poverty.

MR. BOYCE: There are 3.5 billion people in the world today who don't have what we would call adequate access to electricity. There are 1.5 billion people who have zero electricity access today. That is the largest and the most significant human and environmental issue that we face. And until we solve that problem, we aren't going to make the progress that we want to in terms of a lower-carbon future.

When you start to look at those poverty demographics, that energy poverty, that energy inequality, then you understand why coal has been such a fast-growing fuel. How did China get 700 million people out of poverty and into the developed world? They did it with coal.

It's a simple formula. It's going to get repeated. The question for all of us is how do we continue to incentivize the use of coal and the best performance that we possibly can.

MR. BUSSEY: China may be enfranchising their people with energy, but they're killing them with the air quality.

MR. BOYCE: Four million people a year die due to energy poverty. While we're here talking this morning 300 people died due to energy poverty. What does that mean? No electricity. Malnutrition. No health care because there's no electricity. Indoor air pollution. So let's step back from a global view that says that the only thing we need to worry about is CO2.

MR. BUSSEY: Is your prediction that in three or four years coal will be the source of the greatest amount of energy production in the world?

MR. BOYCE: It isn't just my prediction. It's the IEA prediction. Because of the use of coal globally and where they see the base amount used here in the U.S. and the rest of the developed world, sometime over the next three years coal will be the single largest source of energy use globally, surpassing oil.

Source: The Wall Street Journal