Shell gives Big Coal a shove along the gang plank

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News that Shell has been lobbying the World Bank against funding new coal projects leaves the industry more politically isolated and demoralised than ever.

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The revelation that the global oil and gas company Shell lobbied the World Bank against funding new coal power stations is a stark indication of the increasing political isolation of the global coal industry. The coal industry is now so isolated that its corporate competitors such as Shell feel sufficiently emboldened to give the already weakened industry a big shove along the gang plank reserved for undesirable industries.

“We found out most coal plants get their funding started by using the bilateral funding agencies, such as the World Bank, so we were talking to them about the impact their policies have on the energy mix of the world,” Shell’s head of gas, Maarten Wetselaar told The Australian last week.

In July the World Bank announced a new policy restricting finance for coal-fired power stations to the poorest countries and only where there are “no feasible alternatives”. The policy leaves the bank with some, but not a lot, of wiggle room to fund new coal-related projects.

It is impossible to know what impact Shell’s lobbying had. Perhaps it had none. Or perhaps Shell had simply realised which way the wind was blowing and was trying to ensure that the World Bank didn’t take climate protection so seriously that gas-fired plants were caught up in a policy aimed at restricting new fossil fuel power stations. Or perhaps it is simply Shell trying to buff its tarnished corporate social responsibility credentials.

An anonymous spokesman for the Minerals Council of Australia – the lobby group which represents major mining companies such as Rio Tinto, BHP Billiton, Anglo American and Peabody Energy – complained to The Australian that “we should be working together to meet the world’s energy needs”. But clearly they aren’t.

Shell’s lobbying is self-interested for sure. As the deployment of utility scale renewables grows rapidly on the supply side and efficiency and distributed generation bites chunks out on the demand side, the gas industry becomes ever more determined to elbow the coal industry out of the way in whatever space is left for burning fossil fuels.

The real impact of Shell’s lobbying is to leave Big Coal even more politically isolated than before and morale of the industry’s true believers lower.

It had already been a bad year for Big Coal before the World Bank unveiled its new policy and Shell’s lobbying became public. China, a cornerstone market for the global coal market, has launched moves to curtail coal’s role due to its contribution to air pollution. Coal plants in industry have been embroiled in corruption scandals and financial woes. Around the world opposition to the health costs of coal – whether from its transport in uncovered rail wagons or air and water pollution – is changing the public understanding of the real costs of coal.

In many developed countries the era on new coal plants is ending and the retirement of old plants accelerating. To add insult to injury, a bevy of financial analysts are now openly debating how soon demand for thermal coal will peak and then start to decline. The cumulative effect of these rapid shifts in the public mood is to create great uncertainty about future levels of demand, suppress prices and cruel many of Big Coal’s dreams of huge new projects.

The rapidly souring mood towards coal is a profound shift from just a year ago. All Shell has done is given Big Coal another nudge on top of those delivered by others. While Big Coal’s lobbyists are undoubtedly feeling lonelier than ever, the one limited consolation they have is that the tobacco and asbestos industries are ahead of them on the gang plank.

Bob Burton is co-author with Guy Pearse and David McKnight of Big Coal: Australia’s dirtiest habit (NewSouth Books, August 2013). He is also a Contributing Editor of CoalSwarm, a coal wiki and a director of The Sunrise Project, an Australian group promoting a renewable energy economy. You can follow his Twitter feed here.

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16 Comments
  1. Coaltopia 5 years ago

    Almost certainly a pre-emptive protection racket for gas, and possibly also a way to discourage domestic liquid coal development (which, despite its energy sovereignty temptations, can only be a good thing).

  2. Keith 5 years ago

    Time to agitate for better understanding of gas as a fossil fuel. The reality is that gas is on the same footing as coal and must also be aggressively wound back. To try to project that gas is a cleaner solution than coal is a myth that needs to be “outed”.

    • juxx0r 5 years ago

      Really?

      How much ash is produced from burning Gas?
      How much particulate matter is produced?
      How much carbon monoxide is produced from burning gas?
      How much Arsenic, Cadmium, Mercury, Lead, Strontium etc goes up the flue of a gas plant?
      And finally what’s the carbon content as a proportion of the net calorific value of the two fuels?

      Gas is massively cleaner, but you’re right, it doesn’t mean that we should be burning it as fast as we can.

      • Keith 5 years ago

        Hi juxxOr

        Agreed that coal is a disaster from many points of view and that gas burns cleanly.

        The elephant in the room for gas is the losses in capturing and transporting it. Governments have studiously avoided measurements because methane is 20x more potent as a greenhouse gas (although it stays in the atmosphere for a shorter time). Recent studies in the US suggest methane release is dramatically underestimated.

        Of course the immediate adverse health effects of coal are enormous, but global warming is a slow burning catastrophe, so I see no grounds for complacency about using gas as it is a substantial contributor and certainly not dramatically less than coal when the methane release is considered.

        • juxx0r 5 years ago

          Agreed

        • Coaltopia 5 years ago

          Don’t forget the energy requirements for liquefying and re-gasifying (vaporizing) LNG.

        • wideEyedPupil 5 years ago

          Over 20yr period CH4 GWP is 84 (IPCC AR 5 upgraded it’s potential, again)

  3. Tim Buckley 5 years ago

    G’day

    Interesting to see the fossil fuel industry splitting in an attempt by the gas sector to legitimise itself and distance from coal. As Keith mentions, it would be great to know in what circumstances gas is a materially cleaner energy source than coal, particularly including fugitive methane emissions in mining and then leakage during transportation. Maybe those still left at the CSIRO could
    provide an update on their studies into this question?

  4. Richard Hayes 5 years ago

    Both Natural gas and unconvential gas both are cleaner than coal if, the leakage from the field is less than 4%.

    Unfortunately, no one has any good baseline data to know what the leakages are.

    • wideEyedPupil 5 years ago

      If you examine areas of CSG extraction and geologically identical neighbouring areas without CSG rigs and the ground height atmospheric levels of CH4 are multiples higher then it’s effectively a realtime emissions to baseline comparison.

      The industry likes to claim the emissions are just natural leakage but if they are so convinced of this fact why have they absolutely never commissioned baseline testing before fracking an area? Because they are stinking big liars that’s why. The Southern Cross Uni work will demonstrate that . The recent Harvard paper adds to the growing weight of evidence that Fossil Gas is as bad and in many cases worse for GHG for the near-term CC effects as burning coal.

      http://news.harvard.edu/gazette/story/2013/11/u-s-methane-emissions-far-exceed-government-estimates/

      http://thinkprogress.org/climate/2013/11/25/2988801/study-methane-emissions-natural-gas-production/

      If anyone is interested I’m working on a low cost CH4 and PM meter so individuals can do baseline and realtime monitoring of gas and coal mining projects in their area without raiding the piggy bank.

  5. SidAbma 5 years ago

    How efficiently can natural gas be consumed? The residential markets have Condensing water heaters and Condensing boilers. These appliances operate at mid 90% energy efficiency. As far as I know there is only 1 grade of natural gas, unlike gasoline.
    Commercial buildings and industry and the power plants, the ones who consume the most of the countries natural gas energy, why do they not operate as efficiently?
    The technology of Condensing Flue Gas Heat Recovery has been in use in North America for over 30 years. This technology can make these large natural gas consumers energy efficient, to well over 90% Energy Efficient.
    It’s a decision. Do they really want to increase their energy efficiency (reduce their energy bills = profit) and reduce the effects of Climate Change (reduce global warming and CO2 emissions) or is it about the shareholders wants?
    Much can be done, but it is a decision. Even our governments with all this talk of Energy Efficiency, is mostly just talk, or picking away at the low hanging fruit.
    Want to make a difference? Research yourself what Increasing natural gas energy efficiency can do for our environment band our economy.
    It is amazing!!

    • wideEyedPupil 5 years ago

      Shutting down the gas industry with superior renewable technology is the answer not reducing the amount of badness that gas does per joule. It’s probably worse than coal on balance except for coals shocking health impacts. Gas especially unconventional gas has health impacts and aquifer impacts and toxic waste impacts of it’s own that rival coal.

  6. Colin 5 years ago

    Well that has certainly cheered up my day no end.

    Xmas will be that little bit happier knowing that King Coal’s reign is coming to an end.

    It may be too late to stop 2°C (3.6°F) of warming but I’m grateful for small mercies.

  7. Chatteris 5 years ago

    Fracked gas certainly isn’t looking so good these days. Does Shell frack, I wonder?

    http://oilprice.com/Energy/Energy-General/New-Study-Finds-Higher-Methane-Emissions-from-Fracking.html

  8. Chatteris 5 years ago

    Well, well. It turns out that shell does frack, and in fact plans to frack some more right next door to where I live!

    http://www.shell.com/zaf/aboutshell/shell-businesses/e-and-p/karoo/fracturing.html

  9. sean 5 years ago

    Gas will remain an important chemical feedstock well after coal is dead.

    coal’s only other use is coke for iron refineries, which can be economically replaced with electrolysis with cheap power. methane on the other hand is a feedstock for all gas and liquid fuels, and a wide variety of chemicals.

    the good news is that while methane’s effect is more intense, it is only around for a short while, and the imbalance between the addition and subtraction of methane to the atmosphere is relatively small. (600 terragrams/year in vs 580 tg/year out), Huge amounts can be done to reduce the release of methane into the atmosphere.
    Landfills produce 40TG/year, as does the incomplete combustion of biomass. Livestock (115TG/year) give off more methane than energy extraction(110TG/year) (although this will change with farmers treating the bacteria in the animals gut to increase food conversion)
    (This information was current for 1999, since then there has been a large expansion in fracking, and the associated fugitive emissions)

    I think that methane production should be encouraged, especially the capture of rotting wastes, as it provides a non-fracked source of dispachable energy. It also has the side benefit of affecting the climate more severely than carbon dioxide, thus bringing forward devastation and encouraging the use of renewables. Perhaps with enough destruction we will grow wiser homo sapiens.

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