I want clean coal, and we’re going to have clean coal and we’re going to have plenty of it. We’re going to have great, clean coal.
Those were the words that fell out of the mouth of the man who some believe will carry the GOP to victory: Donald Trump.
Now, while I won’t use these pages as a soapbox to endorse or reject any presidential candidate, I will opine about scenarios that could positively or negatively affect our investment strategies. And this is definitely one of those situations.
If you’re an overzealous tree-hugger or a loyal disciple of combustible metamorphic rock, I strongly urge you to take no comfort in the idea that “clean coal” will save the planet or the coal industry. It won’t.
A Giant Flop
Clean coal is a myth.
There’s no such thing.
Presented in a gift-wrapped box labeled “clean” is this idea of carbon capture and sequestration. The concept has actually been around for a long time, but it didn’t really get noticed until 2003, when former President George W. Bush announced the FutureGen project: a carbon capture and sequestration demonstration facility that was expected to be at full-scale operations in 2012.
That never happened, and FutureGen was a giant flop.
After costing a hell of a lot more than initially estimated, the project was shelved in 2008. But true believers of this illusion kept pushing. And in 2010, the DOE revised the project. But after an alliance of coal companies couldn’t deliver on the necessary private funding (even with the government offering to pony up $1 billion for the project), the great promise of clean coal — at least in the form of FutureGen — was suspended.
The truth is, after decades of research and development, there’s little evidence that carbon capture and sequestration offers any tangible economic or environmental benefits.
Considering the fact that coal will never be able to deliver megawatts cheaper than natural gas, from an economic standpoint, it just make no sense.
You’re basically talking about taking a relatively cheap resource — that can’t compete with an even cheaper resource — and making it more expensive under the guise that it will help reduce CO2 emissions.
This is already being accomplished with nuclear, solar, wind, and geothermal — and at a much cheaper cost. So the only real benefit here is for the coal companies and their investors. They really are grasping at straws here… crawling through the valley of death, attempting to reach what is nothing more than a hallucination.
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King Coal’s Coffin
As an unapologetic environmentalist, I have no interest in the lie that is clean coal. It’s a huge scam that does little to address many of the environmental problems we face today. Even in the absence of CO2 emissions, you still have the issues of mercury, sulfur dioxide emissions, and nitrogen oxide emissions.
And as an investor, I definitely have no interest in anything that’s being pitched as clean coal. Especially these days, when there is absolutely no chance of the coal industry coming back to claim its throne.
While the demand for metallurgical coal is not going gently into that good night, don’t think for a second that thermal coal will be particularly relevant beyond 2020.
Dirt-cheap natural gas and the rise of renewables represent the final nails in King Coal’s coffin, and there will be no afterlife for this once-prized resource.
And now that we’re seeing a huge undercurrent of development in energy storage, it won’t be long before the intermittency issues associated with solar and wind are completely forgotten, thereby adding more insult to injury for the coal industry.
Truth is, over the past few years, we’ve seen a real boom in energy storage deployments. In fact, in the fourth quarter of 2015, there were 112 megawatts of energy storage deployed in the U.S. Folks, that’s more than the total of all energy storage deployments in 2013 and 2014 combined.
At 112 megawatts, it’s also a 243% increase over 2014 deployments.
According to GTM Research, the U.S. energy storage market will cross the one-gigawatt mark in 2019, and by 2020, it will be a 1.7-gigawatt market valued at $2.5 billion.
Coal is so screwed!
To a new way of life and a new generation of wealth…
Jeff Siegel
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Jeff is the founder and managing editor of Green Chip Stocks. For more on Jeff, go to his editor’s page.
