Monthly Archives: October 2014

Coal Power with Low Emissions: Is Boundary Dam a New Energy Paradigm

Energy sources are interchangeable for many purposes. Pre-industrial people burned various woods, peat, coal, dung and straw for cooking and basic manufacturing. In such societies, fuels varied between communities depending upon local availability and cost in either money or labour. Pre-industrial people cooked with whatever fuel required the least of their effort.

Energy has never been free or unlimited as the availability of each energy source faces its own limitations. Wood, dung and straw growth are all limited by annual photosynthesis and the need to use land for growing food. Societies that rely upon these energy sources are often characterized as organic economies and had limited carrying capacities for human populations. One such example is England in 1600, when it had a population of 4.15 million but was self-sufficient in food, energy and raw materials. Most of the population lived in villages, where their houses were relatively small and made of wood. Brick was rarely used as the fuel to bake bricks made them prohibitively expensive. Although the country was self-sufficient in food and most people had enough, we generally teach that population growth in the preceding century increased poverty as the region was pushing its carrying capacity for humans. Sixteenth-century England had a fair bit of manufacturing compared to other parts of the world but this mostly involved hand-spun wool cloth. E.A. Wrigley famously captured the organic limitations on metal use when he observed that if all of England were turned over to growing wood for smelting iron, it could only produce 1.25 million tons of bar iron a year.

Since 1600, economic and population growth has been intimately tied to increasing energy consumption. Much of this has involved finding energy sources that don’t rely upon photosynthesis or directly compete with agricultural land use. The adoption of coal as a household and manufacturing fuel was uneven. If population grew beyond those 1600 levels in areas without access to coal or peat, they could not produce sufficient fuel for all households to cook. I have previously written about the limitations of local food sources for the English population as it rose over 6 million after 1763.  In the same years that English and other Europeans were becoming shorter, rising fuel costs priced an ever-larger portion of them out of cooking their own food. Instead, such households came to rely upon purchased bread or cooking as little as once a year and eating stale biscuits for the rest of the time. Even in areas of relative fuel abundance, heating homes when not cooking was an unimaginable luxury for most 18th and 19th century Europeans. In short, compared to organic economies our mineral-fuelled world currently has many more people, who are better fed, live in larger, warmer homes and use previously unimaginable materials.

Another fundamental difference between organic and mineral economies is the rate of economic growth. Pre-industrial economies sometimes grew slowly but this was neither guaranteed nor expected. In fact, classical economists like Adam Smith don’t discuss economic growth because the concept was foreign to how they understood the world. Meanwhile, we expect our economy to grow by a few percent a year and plan many things around such growth. In the current world, an economy that only grows by 1% a year does not produce enough jobs for young people entering the workforce. In addition, such low growth probably increases income inequality as stock prices rise faster than incomes. Our society cannot function without the economic growth it has come to expect in a mineral economy. Any proposal to revert to entirely local, organic energy would require vastly reducing population and have disproportionately negative effects on those in their 20s.

Unfortunately, burning fossil fuels in large quantities often causes air pollution. This was historically a severe problem in Europe and North America, and is becoming an ever-larger one in Chinese cities. Fossil fuels also release carbon into the atmosphere, which is changing climates and acidifying oceans. These are serious problems that affect the long-term sustainability of our current population levels and bring us to the fundamental challenge of energy systems. As a global society, we need to emit substantially less carbon, while also producing enough energy to support an ever-more affluent 7 billion people. In the minds of many across the political spectrum, these imperatives are seen as conflicting. In recent years, it has seemed that people supported different energy sources by prioritising one of those concerns, with solar panels supported by those worried about climate change and coal-powered electricity favoured by those worried about growth.

This conflict between fossil fuels and carbon emissions may have fundamentally changed with last month’s developments at Boundary Dam, near Estevan, Saskatchewan.  Saskpower has developed the world’s first large scale system to capture carbon emitted from a coal-fired power plant and store it underground. They have effectively managed to create coal-fired electricity that generates minimal carbon emissions and air pollutants. However, this project was expensive, as its $1.4 billion cost for the carbon-capture system works out at $12,727 for every kilowatt of electricity generation at the plant. This is in addition to the costs of building the plant or buying coal to burn. The first development of new technology is usually more expensive than later versions and prices will likely go down. If future carbon-capture is not cheaper, it will not be economical. This project is also uniquely suited to Boundary Dam, which sits on the Bakken Shale formation along the Saskatchewan/North Dakota border. This region is currently experiencing an economic boom as oil gets extracted from the Bakken Shale. Much of the carbon being sequestered will replace natural gas in shale oil production and the carbon will be stored between layers of the shale. This creates a market for carbon dioxide that subsidizes the plant and makes the area particularly well suited to storing carbon. There are many places with coal-fired power plants that are not on shale-oil formations and it is unclear whether carbon-capture and storage is feasible there.

If carbon-capture technology does not become cheaper in the future, Boundary Dam will prove to be an overpriced novelty feature on an existing plant. The money could have been spent on known low-emission energy sources. $1.4 billion would buy a lot of solar panels and these would thrive in Saskatchewan’s sunny climate. Meanwhile, at $12,727/kW of generating capacity, the Boundary Dam upgrades to an existing facility cost similar amounts to building new nuclear plants. Nuclear power would increase the amount of electricity in Saskatchewan without emitting carbon in the process. It would also use local resources and helped bring jobs back to far northern Saskatchewan. Once built, nuclear plants produce cheaper electricity than coal. If Boundary Dam does not ignite a rash of technological efficiencies, nuclear or solar power would have been a better solution to reduce emissions while increasing electrical capacity to deal with Saskatchewan’s growing population and the likely rise in electric car use.

If carbon-capture technology and electric cars become cheaper, we may be entering a fundamentally new paradigm in selecting energy sources. If coal can be burnt without emissions, it is no longer an impediment to environmental sustainability. Coal-fired electricity would become more expensive but should not turn off environmentalists. Such a world would return to the pre-industrial mentality where fuel sources were chosen based upon which was cheapest locally. In some places that would be coal with carbon capture, while in others it would be nuclear, solar, wind or hydro. If it becomes effective in many places, carbon-capture would remove the environmental value judgements from choices about energy sources and return them to cost-benefit analysis.

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