Tuesday, June 21, 2016

Growth-focussed India is relying on coal to bring power to another 240 million people

Coal mining and coal energy consumption are likely to be two of the defining issues of India’s rapidly growing economy in the 21st century, particularly, writes Tapan Sarker, "the way in which the nation simultaneously addresses climate change and access to energy."

Coal mine in Dhanbad, India | Photo: Nitin Kirloskar CC BY 2.0

MORE THAN A FIFTH of India’s population lacks access to electricity, posing a major development challenge. India’s Prime Minister Narendra Modi has promised to bring affordable access to electricity to all of these people by 2019.

While Modi has committed to increasing renewable generation, India is also increasing coal production. India is the world’s third-largest coal producer and its second-largest coal importer.

This is creating a growing tension between development and India’s efforts to reduce greenhouse gas emissions to combat climate change.

Transforming economies 

The world economy is changing faster than ever and Asia is at the forefront of its transformation. The growth, led by China over the past decade and more recently by India, shows that Asia has significant progress to make. But there are enormous challenges in realising the dream of the Asian Century.

For instance, in India, 22% of the population is living below the national poverty level. Only 47% of the households have access to a toilet, while 105 million people lack access to clean drinking water and 240 million people don’t have access to electricity.

But there is also bright news for India. The country’s economy is growing quickly and will soon surpass China’s. The Organisation for Economic Co-operation and Development (OECD), in its recent interim economic outlook, has predicted that India’s Gross Domestic Product (GDP) will grow by 7.4% in 2016 and 7.3% in 2017.

In his electoral victory speech, Modi promised a “shining India” of new hopes and aspirations. The reality, however, is far more complex.

Resources are the focal point of this tension, particularly the increasing demand for energy. India’s energy demands will increase significantly, driven by rapid urbanisation, improved electricity access and an expanding manufacturing base.

Energy security is closely linked with food and water security, which are the backbones of the nation and a growing challenge in the face of climate change.

Indian government and businesses are addressing these issues by managing supply, increasing production of coal-based thermal plants and growing renewable energy sources. Coal supplies around half of India’s total energy supply.

Will constraints on resources, particularly access to affordable coal, disrupt India’s economic growth?

What role for coal?

India is the world’s third-largest producer of coal for electricity. While production has increased over the past few decades, the pace of growth has been insufficient to meet demand. Consequently, India has become more reliant on imported coal.

India’s thermal coal imports have increased from almost zero in the 1990s to having it overtake Japan as the world’s second-largest importer in 2013. The Indian government seems to promise adequate supply to its coal-fired electricity generation capacity by expanding its coal production as well as encouraging imports.

For example, the power and coal minister, Piyush Goyal, stated last year that the nation would step up domestic production and stop imports of coal for electricity (not coal for manufacturing) by 2017. However, growing economic growth and population may not allow this.

The Modi government’s plans to give access to affordable electricity to all Indians within the next five years cannot be achieved without importing coal. During the recent visit of India’s energy minister to Australia, the minister admitted that the country will need more coal imports, possibly including from Australia.

Although in the short term the case for Australian coal in India may be weakening due to the current global economic slowdown, India will have to rely on imported coal at least in the immediate future to increase its economic growth. This is reflected by the case of Adani, which is trying to develop a huge Carmichael coal mine in Queensland to supply India with thermal coal.

India’s domestic production of coal is constrained for a variety of reasons. India’s coal reserves are not only insufficient but also unevenly distributed among regions.

A further challenge related to the energy sector is a lack of private participation. Until 2014 coal mining was allowed only for government and private companies directly using coal for electricity and manufacturing.

The Modi government amended this rule to enable private companies to mine coal for sale in the open market. This may help create a more favourable coal market for both foreign and domestic investors and increase domestic production.

Although the Modi government is keen to increase production of domestic coal mines through privatisation, challenges still remain, such as pollution. The costs associated with pollution from coal-fired power stations are very large, as we can see from China.

China’s health minister from 2007-13, Chen Zhu, stated that lung cancer is now the leading cause of death in China as a result of pollution. This required China to spend an extra US$278 billion over five years to control pollution, mainly caused by coal-fired power plants.

India will have to tackle a very similar situation in the future. Hence, coal energy consumption is likely to be one of the defining issues of India’s economy in the 21st century, particularly the way in which the nation simultaneously addresses climate change and access to energy.

Tapan Sarker is Senior Lecturer, Department of International Business & Asian Studies, Griffith Asia Institute, Griffith University. This article was originally published on The Conversation. Read the original article.

See also: New coal and renewable energy technologies partnership for affordable, reliable, accessable and environmentally-compliant power (13 May 2016); Developing Asia kicks back against EU-USA campaign to kill the financing of new coal mining & coal-fired electricity generation (23 Nov 2015).

Thursday, June 16, 2016

Crisis in energy awareness: why the fossil fuel industry has an obligation to educate its staff

There is a dangerous lack of energy education, even within the industry itself, about the indispensable benefits provided by fossil fuel energy, argues Alex Epstein, author of the New York Times best-selling book The Moral Case for Fossil Fuels, founder of the Center for Industrial Progress and an expert on energy and industrial policy.

Cerceda mural homenaxe mineiría detalle | Photo by Elisardojm - Own work, CC BY-SA 3.0

THE FOSSIL FUEL industry, as the leading and most misunderstood energy industry, has an obligation and self-interest in educating its employees and the public about energy, yet does a miserable job at it.

From kindergarten through high school through Ph.D. programs, all of us are taught that fossil fuel use is fundamentally immoral — a self-destructive addiction that’s destroying our planet, or at best a necessary evil that we have to get rid of as soon as possible, even if that (unfortunately) means a few more decades.

But where are we taught that there is a moral case for fossil fuels — an argument that, big picture, fossil fuel technology makes our planet a progressively better place to live, as its benefits to human life, including our environment, far, far outweigh its risks and side-effects? Where are we taught that fossil fuels are not a self-destructive addiction to get off of, but a healthy choice that billions of people need more of?

As a culture, almost nowhere.

This means that the fossil fuel industry has to pick up a lot of the slack — especially in teaching its employees. This is starting to happen, but not enough.

One question I ask CEOs is: “When you bring in new employees for training, what do you train them in?” The answers I get are usually safety, company culture, administrative procedures, and so on.

Then I ask: “What about training employees in the value of what they do — the full impact it has on human life?” Usually the answer is that they do none, or maybe an hour or two.

An hour or two.

So we have employees who have spent a lifetime with our culture telling them what they do is not valuable, is unsustainable, is destructive, and we are only giving them an hour or two on why the career we are asking them to devote their lives to may not be as immoral as they’ve been taught?

How does this affect employee motivation? It leads to many people, particularly among those who weren’t born in the industry, as thinking of their work as “just a job” — something they do because it’s the most money they can get.

Motivation to do an activity and do it well is closely tied to the meaning we associate with it. Can anyone doubt that if industry employees were taught the full meaning of their work and had it reinforced, just as members of the computer industry do, that the quality, quantity, and safety of their work would increase? This potential financial windfall alone should motivate the industry to do its educational job.

If the fossil fuel industry is essential to our prosperity and progress, then the industry’s failure to educate hurts all of us. It was one motivating factor for me to write a book that put together the full case, the moral case, for fossil fuels.

When I see fossil fuel employees and companies who can’t defend what they do — or who try to position themselves as producers of wind and solar energy — I get very upset. If the very people producing the lifeblood of our civilization are doing an incompetent job defending it, then what’s the use of outsiders like me trying to defend an industry that acts guilty?

Let’s say 100 times a year an industry employee is asked: “What do you do for a living?” Whether that experience goes well or badly will depend on whether he knows the true value of what he does for a living — and whether that goes well for the hundreds of thousands of employees of the fossil fuel industry, and the tens of millions of people they have those conversations with, may determine the fate of all of us.

A few years ago, when debating the morality of oil at the University of Wisconsin, a student named Erin Connors, who had worked as an intern at an oil refinery, approached me afterward. Here’s how she later described the difficulties she and others in the industry had in explaining what they did for a living.

"You’re at a party. You’ve just been introduced to someone and you’re making small talk and exchanging information. Where are you from? What brings you here? Work? What do you do for a living?

"Easy questions, right? Not if you work in the oil industry — because you have every reason to expect a negative response when you answer them. You hesitate and shift your weight, preparing for the coming judgment. You answer, 'I work at the refinery on the east side of town.' Your new acquaintance gives you a look that says: You work in the oil industry? You’re part of the problem. Not wanting to be impolite, he changes the topic rather than voice his disdain for how you have chosen to spend our life. The conversation moves on, but you’re left with a sour taste in your mouth. 'Why is everyone always looking down on what I do—and why don’t I speak up and defend myself?'

Several years later, having studied the moral case for fossil fuels inside-out, Erin describes herself as an “oil champion”:

"Now, when someone asks me about my future job, I proudly state that I am going to be working in the oil industry.

"When someone makes a comment about how I’ve 'sold my soul,' I know how to explain to them that I have, in fact, not 'sold my soul' but I am actually very excited to be working in one of the most productive industries 'improving my soul' and the planet.

"Without the moral case for the oil industry, I would not have been able to do that. I wish I had this been given this information my first day at the refinery. I wish all my coworkers — from operators to other engineers to my supervisors — had this information. I hope that someday, it’s taught to every employee at every company."

 So do I.

Center for Industrial Progress is a for-profit think-tank seeking to bring about a new industrial revolution. We believe that human beings have the untapped potential to radically improve our lives by using technology to improve the planet across a multitude of industries: Mining, manufacturing, agriculture, chemistry, and energy. Every individual has the potential for a longer, happier, healthier, safer, more comfortable, more meaningful, more opportunity-filled life.