ANALYSIS | Coal industry digs its head in the sand over climate change

2020-02-03 07:31

Coal is in trouble.

Climate science is not on its side, and no one will commit dollars to new coal mines. Eskom's ailing coal-fired power fleet, which gobbles up most of South Africa's mined coal, will have to be decommissioned in the coming decades.

But the industry's only response to this is to promise investment in vague "clean coal" technologies, and half-hearted calls to form a lobby.

On the biggest issue that it faces – climate - it would appear as though the coal industry is digging its head in the sand.

Industry players, both domestic and international, gathered at the 15th annual IHS Markit Southern African Coal Conference in Cape Town last week.

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There was broad consensus that coal remains an essential player in the South African economy. Industry players complained of being under attack despite coal's importance as an employer and driver of the economy.

While coal remains the primary source of energy for Eskom, the 2019 Independent Resource Plan (IRP) envisages a reduced role for coal in the energy mix in the years ahead. This as much of Eskom's coal-fire powered grid will need to be decommissioned over the next two decades due to the age of the power stations.

South Africa is also a signatory to various international climate accords, which means it must reduce its carbon footprint by phasing out fossil fuels, like coal, in future.

While environmental activists have complained that the IRP doesn't go far enough to address the climate crisis, the coal industry is virtually funereal over it.

Coal often decried as myth by experts

Addressing delegates, Minerals Council South Africa senior economist Bongani Motsa went so far as to liken the IRP to an abusive spouse.

Speaker after speaker, with the exception of a few optimists in the room like Seriti Resources CEO Mike Teke, spoke with trepidation about the coal industry's fate. Many pointed to "clean coal" technology as a suitable answer to the charge that the coal industry is bad for the environment.

Clean coal is often decried as a myth by experts in the field because there are no technologies which can mitigate all of the negative effects of coal mining.

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It quickly became clear, however, that climate was not central to the miner's concerns last week. For example, at the final panel of the conference, all five speakers on stage were asked what the industry's biggest challenge was.

"Funding."

"Funding."

"Funding… and water."

"Funding."

"Funding… and marketing."

Their focus was clear.

Denial

Beneath the surface-level concerns over developing "clean coal" technologies lurked a concerning denial from many industry players - of not only the severity of the climate crisis, but in some cases, a denial of the coal industry's part in it at all.

Over the kind of lunch one would expect to eat while wearing an Armani tux, an international investor mused that the industry was being unfairly targeted. (By whom, he did not say, but a certain Swedish teenager with a long plait mouthing "How dare you!" to a room full of world leaders, comes to mind.)

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But fossil fuels are a big part of climate change, right?

Climate change is not the coal industry's fault, he protested; it's overpopulation that's the problem, he said.

Coal is really very clean, he said, more so than what people realise, and even if it isn't, the world can't live without it.

"The world is built on three pillars: steel, cement and power. You need coal for all of them," he said.

A few tables away, a younger gentleman wearing jeans and a backpack, from a junior miner, felt the same way when asked the same question. People think coal is being mined like it was in the seventies, he said.

Coal is clean now, you see, and these "greenies" don't understand how it all works.

Protestors outside the venue garnered no more than a smug eye-roll from the industry players inside; or those who noticed the protest at all.

The elephant in the room 

But the elephant in the room was always going to be climate, and only a handful of speakers outright acknowledged the severity of the problem.

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Out of the gates on day 1, Teke was frank:

"The use of coal is reducing over time in the US, the EU… the role of renewables is important. We cannot wish renewables away."

Probably anticipating an onslaught of rotten tomatoes from the delegates below, Teke was quick to add: "It doesn't mean if you are a coal miner, you are an environment denier."

And coal mining doesn't have to die with Eskom's coal fleet, he said. Teke's solution is to look East, where South African coal exports are growing. In other words, if Eskom is not going to buy South African coal, someone else will.

Seriti Resources is even building a new mine called New Largo, which will supply coal to Kusile.

Too little too late?

While the industry's commitment to develop "clean coal" technology might seem like a positive thing, (at least they are doing something, right?), the problem is that it is 2020, and the industry has made little progress in this regard so far.

That fossil fuel burning is one of the largest contributors of man-made climate change has been established science for some time. Unless all coal mining CEOs have been in a sulphur-induced coma for the last decade or so, they should have known that this moment was coming.

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It is not even clear whether these mooted technologies are suitable for the South African environment at all.

As Fossil Fuel Foundation director Rosemary Falcon pointed out at the conference, following a very detailed presentation about available clean coal technologies, no one in South Africa has done any meaningful cost-benefit analysis in this field. This is despite South Africa being the world's 14th highest emitter of greenhouse gases. (Eskom is responsible for over 40% of the country's greenhouse gas emissions.)

As the conference came to a close, one thing became clear: the coal industry doesn't need glamorous conference facilities and canapés to find out why it is "under attack" - it only needs a mirror.

Read more on:    mike teke  |  renewable energy  |  climate change  |  coal
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