King Coal's Comeback

Asia needs coal, and the U.S. has plenty. Will expanding exports make climate change that much worse?

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Stephen Wilkes / GalleryStock

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How to act on the answer is another issue. The fact is, no one knows if increased U.S. exports would actually add to the total amount of coal burned globally. Coal companies like Peabody--as well as some economic analysts--say cheap U.S. coal would simply displace more expensive domestic Chinese coal or imports from Australia and Indonesia. If overall coal consumption won't actually increase, why not let U.S. companies--and taxpayers--get the economic benefit of those exports? If the U.S. decides not to build the port facilities, China's hunger for coal will just be met by another dealer.

Some argue that if increasing demand in Asia pushes up global coal prices, it could actually help the environment by forcing more coal-burning countries to start looking for cheaper energy alternatives. In the U.S., higher coal prices could accelerate the switch from coal to natural gas, especially in parts of the Midwest that remain heavily dependent on coal. But that will depend on how Asian markets respond to the potential avalanche of U.S. coal. Chinese demand for coal has been inelastic in recent years, meaning that prices--high or low--haven't had much impact on how much coal China burns. That's partly because the Chinese government exerts control over the energy market, says Richard Morse, director of coal- and carbon-market research at Stanford University, making the effect on emissions of cheaper coal from the U.S. "a complex question. And it's not just about China," he says. "You have to net out the global impacts against the U.S. impacts."

Of course, that kind of modeling is easier said than done, which is why no one's done it. What's clear is that the global rate of consumption of coal--the dirtiest fossil fuel there is--will help decide how fast the planet warms. For their part, environmentalists remain convinced that stopping coal exports to Asia is a must-win battle in the war on climate change. In a fiery speech at a Portland, Ore., protest against the proposed ports last month, environmental activist Robert Kennedy Jr. urged the crowd to fight back. "[Coal companies] are coming to ship their poison, so they can poison the people in China, and that poison is going to come back here," he said. "So don't let them." It's a fight for the people of the Pacific Northwest, but the results will matter to the entire world.

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