VOL. 12 NO. 1
Why Black Is the New Green:
The Enormous Potential of Clean Coal
by Gregory H. Boyce
Chairman and CEO
T he character for “crisis” in Mandarin has two
meanings: danger and opportunity. As the world
wrestles with daunting energy, economic and
environmental challenges, this ancient wisdom offers a
lesson for us all.
Our present economic crisis reminds us that affordable
energy is the foundation of our fragile global economy and
the engine of our recovery. Coal is our opportunity – the
only sustainable fuel able to meet enormous long-term
I have often heard coal called a “bridge to the future.”
To this, I say: Coal is the future. Coal alone has the scale
and cost advantages to deliver what I call the “Three Es”
– energy security, economic stimulus and environmental
The tremendous power of coal to lift people to a higher
quality of life is perhaps most evident in Asia. In less Why Coal: The World’s Best Engine for Economic
than a generation, China has become a giant of the Growth and Energy Security
international economy, navigating industrialization, While near-term energy demands are temporarily softened
urbanization and a digital revolution all at once. Less by global economic conditions, the long-term outlook
than 30 years ago, more than 600 million people in China remains strong, part of a sweeping transformation among
lacked electricity, and only 1 in 500 had a telephone. developing nations. World energy demand will grow
Today, China is the world’s third-largest economy behind 45 percent in the next quarter century as massive
the United States and Japan, and more than 700 million infrastructure projects advance and billions of people
people have gained access to electricity, according to the gain access to electricity for the ﬁrst time, according to
World Coal Institute.
Coal fuels China’s remarkable rise, along with the Global coal demand grows 1.5+ billion tons in six years
economies of scores of other nations. Coal has been growth rate
the fastest-growing fuel for each of the past ﬁve years Nuclear: 4% 0.6%
(Figure 1). Some 80 nations are developing new coal-
fueled generation, and Peabody Energy is fueling much 1.7%
of this growth. As the world’s largest private-sector Hydro: 19% 2.9%
coal company, it provides 10 percent of U.S. electricity
and 2 percent of global power. It serves customers in Natural gas: 19% 2.9%
21 countries on six continents, representing more than
half the world’s population. This gives Peabody access to Coal: 35% 5.1%
some of the most rapidly growing markets for electricity, 0 5 10 15 20 25 30 35
steel and Btu conversion. We are the global leader in Source: BP Statistical Review of World Energy, June 2008.
clean energy solutions from coal, and we are uniquely Figure 1: Coal has been the world’s fastest-growing fuel for
positioned to advance the “Three Es.” each of the past ﬁve years.
74 World Energy Vol. 12 No. 1 2009
the International Energy Agency (IEA). Global coal use Because it is the world’s most capital-intensive business,
is projected to increase 61 percent by 2030 (Figure 2). the energy industry acts much like a rubber band: When
Demand for coal will grow more than the combined the economy contracts, generation projects stall, but
increase in natural gas, nuclear, hydro, solar and wind when growth returns, demand comes roaring back.
consumption through 2025. China, India and the United Without an increase in supply, nations around the world
States will lead this growth, expected to account for will compete for scarce supplies, and costs will again soar.
90 percent of the increase in world coal demand into the
foreseeable future. Other high-proﬁle forms of energy remain too
The world needs all forms of energy to meet long-term
demand, but each alternative has inherent limitations. small or too scarce to provide energy at the
The world’s most productive oil ﬁelds are depleting.
What oil is left is harder to ﬁnd, more difﬁcult to drill scale needed to meet growing global needs.
and more expensive to produce.
Major oil and natural gas supplies also come from unstable Coal is particularly attractive for nations increasingly
nations that are increasingly willing to use resources for seeking energy security that is put at risk from growing
political gain. For example, more than 60 percent of the trends toward nationalization and protectionism. More
world’s natural gas is held in Russia, Iran and Venezuela. than 200 gigawatts of electricity representing 700 million
These are the same nations making headlines for pursuing tons of annual demand are under construction in nations
an OPEC-like natural gas cartel to control supply and around the world. This drives enormous economic growth,
price. Expanding the ability of a handful of nations in representing more than 4.5 million jobs and $1 trillion in
unstable regions to determine the world’s energy destiny direct economic impacts.
must be contrary to global energy security. Coal’s versatility only adds to its attraction. New
Other high-proﬁle forms of energy remain too small or technologies allow coal to be transformed through
too scarce to provide energy at the scale needed to meet “Btu conversion” applications into transportation fuels
growing global needs. Coal plants generate electricity and natural gas.
when clouds will not break for solar panels and when Coal is mined commercially in more than 50 countries.
calm days quiet wind turbines. By the end of this year, Reserves are large and geographically diverse, from a
the U.S. Department of Energy will have spent more on variety of nations both large and small, developed and
solar and wind research in the past 30 years than the emerging, on every major continent. Trade ﬂows are well
total inﬂation-adjusted cost of the Apollo space program. established. And in the words of the World Coal Institute,
Yet the renewables portion of the U.S. energy portfolio “Coal does not need high-pressure pipelines or dedicated
has barely budged. supply routes that need to be protected at enormous
Solar and wind combined still constitute 1 to 2 percent expense.” Coal can be easily stored, and coal-fueled
of U.S. electricity, and all renewable energy forms electricity is well proven and not weather-dependent.
account for about 7 percent, roughly the same proportion
reported by the Congressional Research Service 30 years 6,000 Coal shows
ago. Even with the rapid growth of renewables, more than best long-
80 percent of global energy consumed in 2030 will still
Million tonnes of oil equivalent
come from conventional fuels, and only 2 percent of
world primary energy is forecast to come from renewables,
according to the IEA. 3,000
Coal’s cost advantage is signiﬁcant. In 2008, for
instance, the delivered cost of coal in the United States 2,000
was 83 percent lower than oil and 79 percent lower than
It is also important that nations not confuse conservation 0
with recession. The secular trend toward greater energy 1980 1990 2006 2015 2020 2025 2030
use will continue – while the current underinvestment Coal Natural gas Oil Nuclear Hydro Biomass Other
in energy will make supply-demand fundamentals all the Source: International Energy Agency, World Energy Outlook 2008.
more imbalanced when strong global economic growth Figure 2: International Energy Agency projects 61 percent
inevitably resumes. growth in global coal use by 2030.
World Energy Vol. 12 No. 1 2009 75
Why Coal: Bringing Electricity to Emerging As we conclude the ﬁrst decade of the 21st century,
Nations, Lifting Billions to Better Lives however, isn’t it astounding that more than 2 billion people
The need for energy answers is urgent. Global populations around the world still lack adequate access to electricity?
are growing at an unprecedented pace, with Asia expanding Another 1.6 billion – more than ﬁve times the population
at rates that dwarf the Western world’s industrial in the United States – have none at all, according to
revolution. For every child in France, 30 are born in India. the IEA and World Coal Institute. They seek power for
Some 600 million people ﬁll China’s cities; German the most basic needs: clean drinking water, lighting and
cities have 62 million. In its International Energy Outlook, home heat. Many still spend hours each day collecting
the U.S. Energy Information Administration forecasts dung and wood to burn, dangerously, in their homes.
that the Middle East will increase its energy consumption The average Chinese man or woman uses one-ﬁfth the
by more than 17 quads by 2030, India will grow by 17 quads electricity as the average citizen of a developed nation.
and China will grow by 88 quads. With populations that reach billions, both China and
India will account for more than 50 percent of new
As we conclude the ﬁrst decade of the power generation and half of the world’s energy demand
growth by 2030, according to the IEA.
21st century isn’t it astounding that more Furthermore, while Asia’s projected energy needs are
staggering, more mature economies will also continue to
than 2 billion people around the world still demand affordable power to sustain our modern way of
life. Coal’s affordability and abundance make it a fuel for
lack adequate access to electricity? social progress even in the most advanced economies.
A growing collection of studies demonstrates the
Billions of people in emerging economies are correlation between electriﬁcation and improvement
awakening to the beneﬁts of modern energy, one of life’s in health, longevity and quality of life. A major study
necessities. Multiple studies – and plain common sense by Daniel Klein and Ralph Keeney shows that low-cost
– indicate that citizens in nations with good access to electricity from coal saves lives, preventing at least
energy are far more likely to have longer, healthier lives, 14,000 to 25,000 premature deaths in the United States
eat better and enjoy a higher education level. each year. Another study, by respected epidemiologist
As the Global Energy Institute reported last year: M. Harvey Brenner of Johns Hopkins University,
“Every single one of the United Nation’s Millennium concludes that removing coal from the energy mix would
Development Goals requires access to electricity as a result in approximately 150,000 deaths each year in the
necessary prerequisite.” United States.
76 World Energy Vol. 12 No. 1 2009
How Coal: Technology Makes Coal Clean and Green
Coal’s vital role in energy security and economic stimulus 200%
carries over into environmental progress. Coal’s improving
150% Electricity from coal 187%
environmental track record gives it a new green proﬁle
as the world’s favorite fuel. Technologies that are now 100%
Index = 1970
under development, too, are changing the color of coal, Energy consumption 50%
enabling us someday to achieve the ultimate green goal 50%
of near-zero emissions with carbon management. 0%
That is why I like to say black is the new green. It 1970 1980 1990 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007
is a statement that surprises some, inspires friends and -50%
U.S. emission reductions per ton of coal -84%
intrigues the vast majority who hear it. But it also strikes
at the core of the case for coal. So when the “why coal” Source: U.S. Energy Information Administration, Annual Energy Review, June 2008;
Peabody analysis of U.S. Environmental Protection Agency Air Emissions
question is answered and the follow-up turns to “how,” Trends Data for sulfur dioxide, nitrogen oxide and particulates, August 2008.
the simple answer is: cleanly. Figure 3: Electricity from coal tripled since 1970 as emissions
The United States demonstrates that clean coal comes signiﬁcantly improved.
in two distinct phases.
Phase one has already achieved impressive success. Carbon capture and storage (CCS) technologies are
Utilities have invested tens of billions of dollars in clean- under rapid development around the world, with the
coal technologies to eliminate emissions over the past ultimate goal of near-zero emissions from coal-fueled
several decades. As gross domestic product and electricity generation. Technology is being advanced worldwide
from coal have tripled in the United States since 1970, toward a low-carbon future that ultimately will capture
coal’s environmental efﬁciency has dramatically improved, and store carbon as part of a near-zero future.
resulting in an 84 percent reduction of regulated The technologies separate the CO2 from coal use
emissions per ton of coal, based on an analysis of U.S. and compress it into a ﬂuid-like state that is as dense as
Environmental Protection Agency data (Figure 3). liquid, making it easier and less costly to transport via
Phase two – green coal – builds on this enormous pipelines. The CO2 is injected deep underground in oil
progress, zeroing in on a reduced carbon footprint. New ﬁelds, caverns and saline ﬁelds, and deep beneath the
coal plants have a lower carbon-emissions rate than the ocean ﬂoor in geographic formations that have stored
existing ﬂeet due to improved efﬁciency. This progress methane, coal and oil through the millennia (Figure 4).
will continue in the United States and around the world
Technology uses carbon dioxide for enhanced oil recovery
with clean-coal technology. or underground storage in oil and saline fields
Employing advanced coal technologies has created 3 5
tremendous environmental progress in the United States.
To achieve similar success with carbon management,
technology must be commercialized to capture and store
carbon, and regulatory certainty must be created. Both 1
elements must be in place before setting artiﬁcial caps. 6
Technology ﬁrst, then controls. 4
While a cap-and-trade regime has worked for sulfur
dioxide, the challenges for carbon dioxide (CO2 ) are
much greater. Reducing CO2 is a global issue. There is
no low-carbon coal and no known costs for scrubbers 7
or other carbon-reducing technologies. Initiating a cap
before technology is ripe would only serve to pave the
way for industry and emissions to ﬂow to nations who
simply choose to opt out. 1. Clean coal fuel supply 5. Enhanced oil recovery
2. Carbon capture 6. Carbon dioxide injection
The Advantage and Necessity of CCS 3. Electricity production 7. Saline aquifer storage
Coal is ultimately a dense, high-energy product that 4. Carbon dioxide injection
makes it excellent for use in electricity generation and Figure 4: Technology uses carbon dioxide for enhanced oil
other end uses. This use results in the release of CO2. recovery or underground storage in oil and saline ﬁelds.
World Energy Vol. 12 No. 1 2009 77
CCS is projected to be the lowest-cost low-carbon A Four-step Path to Near-zero Emissions
solution – less expensive than nuclear, wind or natural gas To advance all three “Es,” I advocate a multistep plan
– according to a recent Carnegie Mellon University study. that recognizes coal’s growing role in energy supply while
advancing toward near-zero emissions. Steps include:
The magnitude of the carbon challenge is 1. Building advanced supercritical combustion plants
with improved efﬁciencies to help the environment
enormous, and increased focus, funding and and stabilize our baseload electric reliability for
the next 15 years. These plants typically have CO2
rules clariﬁcation all are needed. emissions that are 15 percent below the existing
ﬂeet based on the efﬁciencies of design and provide a
The world has ample room for carbon storage. Just as crucial step toward satisfying reliable energy needs.
we are blessed with good geology for coal, nature has 2. Demonstrating and then commercializing integrated
also bestowed good geology for carbon storage. In the gasiﬁcation-combined cycle technology and CCS.
United States, for instance, we could sequester CO2 for Enhanced oil recovery can help to drive down the
the next century and would not even use up 10 percent cost of CCS while improving energy supplies.
of the potential geology that is suitable for storage, based 3. Developing coal-to-gas and coal-to-liquid technologies
on an analysis by Paciﬁc Northwest National Laboratory. with CCS. The coal-to-gas process, or methanation,
There is enough capacity for hundreds of years of storage already captures a very pure CO2 stream, so the task
around the world. of storing the CO2 is made far easier.
CCS can also produce greater supplies of other energy. 4. Retroﬁtting existing coal-based plants with CCS
One of the most promising early applications for carbon technologies. Remember that we have thousands
storage is in aging oil ﬁelds for enhanced oil recovery. of coal-fueled generating plants around the world.
This process alone could lead to production of another Developing the technologies to remove the CO2
2 to 3 million barrels of oil per day in the United States, from these plants, as has been done for many other
according to the National Coal Council. emissions, is important to accomplish any meaningful
Other promising technology paths beyond coal gasiﬁca- reductions in CO2 over the next several decades.
tion include reducing CO2 in an oxygen-rich environment The Group of Eight (G-8) industrialized nations
during combustion or using scrubbing agents for removal. have set a goal of developing 20 large power plants that
would capture and store carbon by 2010. Major regional
We know that the world will use signiﬁcantly carbon storage projects and partnerships are under way
around the world. Governments have set aside more
more coal in the next several decades than it than $20 billion for demonstration plants, and nearly
120 projects are in development, according to Emerging
uses today. Energy Research.
Global partnerships and projects like these are
The magnitude of the carbon challenge is enormous, essential for securing our energy supplies and achieving
and increased focus, funding and rules clariﬁcation our climate goals. Peabody continues to target energy
all are needed. In a recent analysis of CCS, the IEA and environmental policies that advance both of these
concluded that current spending levels are nowhere near aims. For instance:
enough to achieve deployment goals. I agree. • In Asia, China’s multiphase 650 megawatt
The development of CCS is not optional. In the GreenGen power plant would be among the world’s
words of former British Prime Minister Tony Blair: “The largest commercial-scale, near-zero emission coal
vast majority of new power stations in China and India plants. Peabody is the only non-Chinese partner in
will be coal-ﬁred. Not may be coal-ﬁred – will be. So, GreenGen.
developing carbon capture and storage technology is not • Australia, the world’s largest coal-exporting nation,
optional, it is literally of the essence.” has established an AUS$100 million global clean-coal
We know that the world will use signiﬁcantly more institute to help channel public and private investment
coal in the next several decades than it uses today. The into low-emissions power projects. Peabody is a
question is whether that coal will be used in a low-carbon founding member. Australia has multiple near-zero
fashion. I say yes, with CCS. emissions power initiatives through the coal industry’s
COAL21 program, which Peabody helps fund.
78 World Energy Vol. 12 No. 1 2009
• In the United States, Peabody is a founding member international economy is linked to our energy choices.
of the FutureGen Alliance, a consortium of some of We have the power to make change. Let’s capitalize on
the world’s largest energy and coal companies that the single resource that is most needed to deliver secure,
seek to develop a 275 megawatt near-zero emissions affordable energy supplies and environmental solutions:
prototype with carbon storage. FutureGen would be our own willpower. ■
sited in the Midwest.
Peabody also works on multiple levels to build under-
standing about coal, and we are seeing strong results. A Gregory H. Boyce is Peabody Energy’s chairman and
recent poll shows that 72 percent of U.S. opinion leaders chief executive officer. He was elected to the board
support the use of coal for electricity generation. In the of directors in March 2005, assumed responsibility as
same national poll, 69 percent view coal as a fuel of the president and CEO on January 1, 2006, and was elected
future. chairman of the board on October 10, 2007. He joined
Peabody in 2003 as president and chief operating officer
Shining a Bright Light Forward and has extensive U.S. and international management,
President Barack Obama may have summarized the need operating and engineering experience.
for coal best when he said: “Clean-coal technology is
something that can make America energy independent. Previously Mr. Boyce served as CEO of energy for Rio
This is America. We ﬁgured out how to put a man on the Tinto PLC. His prior positions include president and CEO
moon in 10 years. You can’t tell me we can’t ﬁgure out of Kennecott Energy Company, president of Kennecott
how to burn coal that we ﬁnd right here in the United Minerals Company and director of government and
States of America and make it work.” public affairs of Kennecott Corporation. He also served as
The president recognizes that the era of vague and executive assistant to the vice chairman of Standard Oil.
wishful policy prescriptions is over and that the moment
for signiﬁcant funding increases in all forms of energy – Mr. Boyce’s leadership positions include vice chairman
especially clean coal – is now. His message to Americans of the World Coal Institute and the National Mining
applies equally to the citizens of nations around the Association. He is a member of the National Coal Council
world. We must build the new coal plants and develop (NCC) and was the study chair of NCC’s 2006 report,
the coal-fueled technologies that create both jobs and “Coal: America’s Energy Future.” Mr. Boyce serves on
low-cost energy, which in turn drives economies and the board of directors of Marathon Oil Corporation. He
improves lives. And we can do so while achieving our is also a member of the Coal Industry Advisory Board of
long-term carbon goals. The urgency of this message has the International Energy Agency. He is a board member
never been so apparent. of the Business Roundtable and the American Coalition
It is time we recognize that the strength of our for Clean Coal Electricity.
World Energy Vol. 12 No. 1 2009 79