Perhaps it’s a sign of increasing desperation, but Washington’s coal lobby is trotting out some real whoppers lately. Let’s take a look at what the Bellingham coal port people said in a recent email under the Orwellian banner, “The Truth About Coal Consumption.”
You get a flavor for the folks behind the Gateway Pacific Terminal (GPT) right off the bat when they claim, in the very first sentence of their email, that their opponents are engaged in a “religious war on coal.” (Note to locals worried about noise, traffic, and pollution in your community: you are extremist fanatics.)
GPT’s “Truth About Coal” email is, in fact, a hash of distortions and fallacies. In the interest of time, I’ll confine myself to dismantling only two of the bigger mistakes.
Bad argument #1: Increasing the supply of coal does not affect demand. (If this argument seems counter to principles of basic economics, that’s because it is.)
GPT blunders into a discussion of economics that is frankly baffling. Apparently lacking any ability to explain their market, the GPT email cites a 2010 newsletter article by Richard Morse and a recent Crosscut piece by Daniel Jack Chasan. Here’s Chasan:
Blocking construction of a port at Cherry Point, or Longview, or any place else in the Pacific Northwest won’t reduce by even one lump the amount of coal burned in Chinese or Indian power plants.
Chasan’s done good environmental policy reporting, but on this point he’s simply wrong. (Please see the update at the bottom of this post.) Consider the economic fundamentals to see how. The export facilities planned for Washington are intended to move more than 100 million tons of cheap US coal to Asian markets—a staggering volume. The sole purpose of these ports, in other words, is to increase the supply of coal.
Now, can anyone tell me what happens to price when supply goes up?
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If you guessed that the price goes down, you are correct. And if the price goes down, then consumer demand—in this case the demand for burning coal—goes up. That’s why one of the four basic laws of supply and demand is: “If supply increases and demand remains unchanged, then it leads to lower equilibrium price and higher quantity.”
For visual learners, here’s how economists display this information:
As the website EconPort describes this graph: “you can see that an increase in supply will cause the price to decline and the quantity to rise.”
If charts aren’t your bag then let me recommend resource economist Thomas Power who thoroughly debunked this pro-coal argument in his recent white paper, “The Greenhouse Gas Impacts of Exporting Coal From the West Coast.” Consider:
This result—that international competition to serve particular import markets will lower the prices that the importing countries have to pay—should not be startling. One of the major benefits of international trade is that it allows countries access to lower cost sources of supply.
So there’s no reason to think that Washington coal exports will simply displace other coal in the market. Instead, American coal exports will increase supply, bring down market prices, and thereby increase total consumption. Now you can argue about the extent to which increasing supply will boost demand—just as you can argue about the extent to which higher prices would dampen demand—but you can’t really argue about direction of the change.
But it gets worse. As Power points out in his paper, the damage of coal exports may actually be a bit worse than it looks on paper. That’s because lower prices will encourage China to build more new coal-burning power plants than they would otherwise, locking in elevated coal burning and pollution for decades to come.
Bad argument #2: Climate progress depends on exporting coal to China. (If this argument sounds crazy that’s because it is, indeed, completely crazy.)
The email references an Atlantic Monthly piece by James Fallows. The fact that GPT is using Fallows’ article as support for exporting coal is evidence that they haven’t bothered to actually read the darn thing. (Seriously, coal people, go read it now.) That said, they must have skimmed enough to mine a couple of selective quotes in order to attribute this belief to Fallows: “There is no story of climate progress without a story for coal. In particular, US-China progress on coal.”
So is Fallows really arguing for more coal exports and more coal burning?
No. No, he is not.
In reality, Fallows is simply pointing out that there’s a lot of coal being burned around the world and that China and the US should invest in joint R&D on burning coal in cleaner ways. Fallows wants to harness the power of American research institutions to develop technologies that can be implemented quickly in Chinese power plants. That’s a terrific idea. But it provides absolutely no support whatsoever to strip mining the Rocky Mountains to ship massive volumes of coal to China.
To wit, here’s what else Fallows says about coal:
…the by-products of coal’s combustion fill the air not simply with soot, smoke, and carbon dioxide but also with toxic heavy metals like mercury and lead, plus corrosive oxides of nitrogen and sulfur, among other pollutants…. Compared with most other fossil-fuel sources of energy, coal is inherently worse from a carbon-footprint perspective…
That’s right. Coal is inherently a bad deal for health and the environment. Given that we’re stuck with it for a while, we should try hard to clean it up to the extent possible. But doubling down on the mistakes we’ve already made is like prescribing whiskey for a hangover.
I’ll stop there for now. There are more claims in GPT’s email that deserve criticism, but I’ll save those for later installments on this blog. Stay tuned.
Update 8/12/11 — Chasan has a very good follow up article at Crosscut, in which he explores Power’s argument in more detail.
China’s growth is not going to be affected or determined by whether America exports coal. With such growth, there WILL be more coal fired power plants. Whether such coal comes from Africa, or Australia, or Russia, or God forbid, America, would be determined by market forces. In that sense, supply increase from America is rather irrelevant to China’s propensity to build coal fired plants – they WILL be built, and America is hardly the only (or even the most significant) supplier of coal.
YET for America, the choice is one of economic well being. Life is about choices. Americans seen the Aussies making a rather good living, with nary any unemployment, and with $150K a year truck driving jobs, simply by digging dirt and exporting. It is a viable economic solution to joblessness. Believe you me, when folks are out of work, and there are mouths to feed, the environment comes second.
Eric de Place
The economics is clear: exporting 100+ million tons of American coal to China each year will have the effect of increasing coal burning and the attendant pollution. Turning ourselves into a resource colony is not only a bad business strategy, but it worsens global climate change to boot.
The problem with the pro-coal arguments is that they substitute assertion for facts and evidence. For example, you claim that coal exports are a viable solution to joblessness. Yet even if the giant facility at Cherry Point employed solely Whatcom County residents (a highly unlikely scenario), its operations would change local employment by less than 1/10th of one percent, and not even until 2015. (See: http://www.sightline.org/2011/03/07/coal-export-jobs-in-context/.) We can do better.
And your commit on how many jobs is also flat wrong.. People like you are narrow minded, what about all the railroad jobs? Wheather its railroad transportation jobs, new construction, or maintenance jobs there would be a minimum of 1500 new railroad jobs from Wyoming, Montana, Utah or Colorado. I’m not sure why its bad business to export coal, we export wheat, grain, and soybeans. Also, your little notion that Asia will reduce their consumption of coal is a pathetic lie. Asia will get coal from other sources they have been for a very long time, the US exports, especially out of the PRB have only steadily been been going on for 3 years. These are the same arguements the same environmental groups said about the timber industry before they destroyed that. Ironically, the two counties that have the higher unemployment rate is the same counties these two facilities are be proposed.
Eric de Place
I’m using the jobs numbers supplied by the Gateway Pacific Terminal supporters themselves. As far as I can tell, the RR jobs figures you’re citing are fabricated from whole cloth.
As for the economics, it’s pretty clear: increasing the supply of coal will lower the price and boost its consumption relative to what would happen if we don’t increase supply. That is a very basic economic principle that is substantiated by highly respected resource economic Thomas Power. Your evidence is what again?
Fabricated from whole cloth? What is that suppose to mean?? A little insight for you, I work for one of these western railroads, these are the numbers both the BNSF and Union Pacific are using if these facilities are built. So a rough estimation for these two terminals could easily be 2000 jobs spread over 5 states, and these are good paying jobs, (70,000+ a year). So, prove to me I’m wrong, I doubt you can cause you don’t really know what ie going on in my industry or other countries..
You need to start looking at other parts of the world, compare the coal exported from other parts of the world. PRB coal is the best coal to burn, less mercury, less co2, cleaner burning. China has been trying to find a better coal to burn, that’s why they’ve become an importer over the last several years. The point really isn’t whether coal will become cheaper, the point is why do a certain group of people think they should be able to control what goes on around the world. Why do they think they have a right to tell private companies what and how much they export? Your response to the jobs is still ignoring the other parts of these projects, from transportation to mining and exporting. My proof, less than 2% of the PRB coal is exported and prices are still low, that may change when the Aussie’s implement a 33% tax on mining exports, but it won’t make coal less expensive, coal will cost more. So your wrong there. All these points you are putting up I can and will rebuff, its stupid that people don’t want this country to have any type of heavy industry, we can’t become a service only country, just look what at the fight in DC now, the environmental groups are the reason why our jobs have gone over seas…
Eric de Place
1.) Please provide some actual evidence in support of your 1,500 RR jobs claim.
2.) Saying that PRB coal is clean is like saying the low-tar cigarettes are a healthy choice. Better than the worst stuff, I suppose, but hardly a good idea — and hardly the best alternative available.
3.) You ask, “the point is why do a certain group of people think they should be able to control what goes on around the world.”
That’s a great question! Tell me again why Peabody Coal, BNSF, and Goldman-Sachs get to decide to destroy mineral-rich regions, spread pollution through countless communities, and destabilize the planet’s climate? I must have missed the day in Civics class where American citizens gave up the right to democratic process and public accountability.
My proof? Ever been to the PRB? Ever seen the infrastructure the two railroads have there and the employees that work there? As for the typical environmental response to coal, those developing have a right to choose whatever energy source they chose. And there maybe a bit more seriousness taken to the environmental groups didn’t live in stick built houses and didn’t use electricity. As for the BNSF, Peabody, and Goldman destroying mineral-rich land, spreading pollution, and creating climate change, first if you’ve never been to the PRB then you’d never know there was any mining going on except for the loading silos, second, the railroads are the most efficient and cleanist mode of transportation in this country. Third, all of the mining companies in the PRB have give awards for the reclamation of the land after they are finished mining. If Goldman wants to invest in one of these terminals who are you to have an issue? If your invested in them and they are making you portfolio money you won’t care. As for the whole climate change crap, that’s all it is, there is and has been crap in the atmosphere since this planet was formed, its gone through warm and cold cycles, and if the data wasn’t played with and agreed through the whole scientific community I think more people would be more sympathetic to that cause.
Let’s just get to the bottom line. COAL is a FILTHY, POISONOUS, DANGEROUS PRODUCT that FILLS THE AIR WITH POLLUTANTS that HARM PEOPLE, ANIMALS and the BEAUTY of the the EARTH – WHEN it is MINED, WHEN it is SHIPPED and WHEN it is BURNED.
WE DON’T WANT THIS CRAP going. through the center of our clean, beautiful city every hour, with it’s filth, noise and interruptions of traffic patterns that will become more and more import as our waterfront develops – ruining it for our residents and visitors, as well as making it far less desirable to other employers who will come here in the future. It is our city. We support it with our taxes and we are proud of the life we have created here. Why don’t we have the right to place our desires for our town, and our care for our earthly home above profit for mammoth banks and mining interests from far away from Whatcom County?
Well Ben easily put, you people say you want cleaner energy but you people also don’t want your utility rates to go up and most of all, none of you want a nuke plant or windmills anywhere close to where you live. A little hypocritical. As long those things are built close to you its ok… As for having a say what rail traffic goes through your community, the railroads built those communities and federal law allows the railroads to do what they need to cause of interstate commerce laws.
Try to follow what I’m going to say to you…..
Nice the way you use the term “you people.” Where have we heard that term before?
You show who you are when you use words like that to attempt to denigrate others.
Allow me to educate you on something you obviously do not understand. “We people” have no problem with utility rates increasing IF we know it is because alternative, cleaner and healthier, fuels are being brought on line. I DO have a problem with increases when I know it is just increasing the outrageous personal profits these greedy, filthy-product companies are making while raping the earth and making all of us less healthy.
I don’t personally consider nuclear a clean, safe source of energy. I would much prefer to see clean energy windmills, solar systems and geothermal, etc. spring up all over our area as just one more sign of the respect that the people of this area have for each other and for the Earth.
Be clear Bryan. There is no hypocrisy here. I will always stand on the side of clean, healthy lives for the people, and care of the Earth, over obscene profits for huge corporations that are not interested in being truly responsible “citizens,” but only in amassing wealth and power for themselves. (You must obviously be part of one of these, else why would you take a stand for them, over people?)
Yes, I’m familiar with interstate commerce laws, and the Supreme Court decisions that, linked together over the years, have taken away the rights of individuals and communities, and given them to the cause of strengthening big corporations.
And, excuse me. I did not realize that the railroads built Bellingham! Wow. I just never realized this was a railroad town. Guess I’ll have to freshen up on my history.
I like that railroads are a relatively inexpensive type of transportation for lots and lots of good things. But, as you MAY have figured out, I am bitterly opposed to them hauling filthy, poisonous, noxious, flammable materials, especially coal, through the heart of the residential, business and recreational parts of our community. How about you buying a house alongside one of the tracks that are carrying coal, and returning empty coal cars, about once an hour day after day, week after week, year after year, and see how much you enjoy hearing them, seeing their dust on everything and breathing their toxic air. Will you do that?
Some folks are arguing in favor of the temporary jobs that are supposed to come here with the building of the “coal” terminal.? Well, if we don’t soon start making decisions that create jobs that produce things that help sustain the planet, we will eventually not have any place to work, much less to live.
But, whatever makes us think we can convince selfish, greedy and uncaring people to even consider, much less accept, what is in the best interest of humanity as a whole?
Well Ben you must have missed the fact the I work for the railroad, and I do live along one of those tracks.. My point as to the railroad building those communities was that the railroads HELPED build up those communities. I also don’t think think that you’d like your utility prices to triple, I wouldn’t. And I really don’t need to be educated on your point of view, I’ve listened to it for a long time. There has to be middle ground, but “you people” like the tea-party its their way or no way. I also don’t like the greed by big corporations I believe they need to pay a lot more in taxes, but they do create jobs, and higher paying jobs than the service jobs that this country is turning into.
I should have guessed that you have a personal financial interest in this project – as an employee of the railroad. I also now understand why you want the additional “business” of having the coal come through Bellingham by rail. But, apparently you have a good job that does not depend on this coal thing for your financial success, since you have not had it before, but you’re still working. But this time, how about being happy with what you have, and put the best interests of the majority of the people in the beauty and cleanliness of our community, over expansion of railroad profits, as well as stuffing the pockets of Goldman Sachs and Warren Buffett. We respect your position, but we need your support if you care about all of us, and our wellbeing. Thank you for considering it.
I’m not sure if your being sarcastic about my job. I’m not sorry who I work for or the job I have. My company along with the mining companies are in business to make money. With that being said, I personaly don’t believe that Cherry Point is a good location for the amount of coal that’s being talked about being exported. Logically for the BNSF it will be a nightmare, plus, there is one little issue that hasn’t been mentioned. This facility is only for Peabody, the coal that’s currently and will continue to go to Westshore even if the terminal is build. Plus more coal from Utah and Colorado. I believe that the terminal should be built out at Grays Harbor or Astoria. Longview isn’t a bad location, its away from residential area and on private property. My interest in this is more of the trade deficit with Asia, China has almost a trillion dollars of our debt and we need to close that gap. Also the State of Washington is broke and has been since the timber industry was basically shut down. It’s a good way for Washington to get more tax money in there general fund. I do understand the issues that go along with the coal, but, it is going to be exported and that is something that really needs to be understood. And I do believe that these terminals need to meet ALL ecology requirements plus make sure the coal isn’t blowing all over gods green earth. Both the BNSF and Union Pacific have spent millions in rebuilding of the ROW cause of coal blowing off the trains, which in turn has made the mining companies put a a solution on the loads before they leave the mines. Which has considerably reduced the amount of coal blowing off the trains..
Hi again, Bryan,
Thanks for the exchange of ideas. I learn something every time you write, and appreciate that. My sincere apologies if it sounded like I was being sarcastic about your job. I certainly did not intend it that way. I respect that a person works to provide for himself and his family, as long as it’s honest work that does not harm others.
You obviously have thought this coal issue through. I recognize that I have probably been too harsh in my comments. It’s just as I mentioned before – I have a real issue with major corporations that focus almost entirely on creating huge profits, seemingly with little or no concern for the overall wellbeing of human beings and care for the Earth in general. I truly DO put coal in that category. If you get the chance, try to catch the movie “The Last Mountain.” It was really an eye opener for us.
Well, anyway, no hard feelings. Like every other subject, I continue to remain open to new information on the coal issue. But for now, I have to continue to be against it. Guess maybe I’m just a 75-year-old “tree hugger.” :>)
Providing millions of tons of cheap (primarily taxpayer owned) coal to China has dramatic effects beyond the relatively few (80) jobs in Gateways filings with the state. One economic study indicated that the energy generated by this coal would create 500,000 jobs in China and thousands of new factories producing more consumer products to be shipped back to the United States. The result? Elimination of 200,00 US jobs as less products are produced here -more in Asia. The middle class gets very little if any benefits, society gets mercury pollution, health problems, women damaged fetuses, cancer rates increase along railway corridors and on and on and on.
How can the Coal companies depend on a rail route that is one track in many areas and
is not infrequently shut down for days due to slides which make the track impassible?
Do they plan to “park” the delayed trains and then play “catch up”?
As for the coal, if it must be used, why not treat it as an “emergency” resource in case some day we need it? Why do anything which lowers any energy costs for China?
If there must be a terminal, why not build it further south—before the coastal route south of Bellingham (which is so narrow, subject to slides, and so potentially detrimental to the quality of life in Bellingham?).
Is there ant realistic consideration of a “northern route” (e.g. through Canada)?
It comes down to this. Any activity that increases the mining of coal in the USA (or anywhere else on the planet) will decrease our likelihood of reducing dangerous gases in the atmosphere. These gases are already causing devastating weather shifts due to the increased moisture in the atmosphere caused by our use of heat trapping fossil fuels. I refer you to a recent article published on Alternet that connects the dots. It is high time we consider the future of the human race on earth, not just the short term profit gained from all forms of continued fossil fuel use.
BTW, China recently announced that it hopes to reduce its growth rate by 3%, presumably to reduce the divide growing there between the haves and have nots. Capitalism meets communism you may call it, but I think it just might be common sense.
In the world of cluster-bomb public relations, reason, truth and accuracy are less important than repetition,catchy phrases and emotional appeal. The coal industry’s PR people have concluded that an insignificant percentage of people will notice their insupportable arguments. It’s up to folks who care to prove their cynical strategy wrong by educating the public. Most Americans do not want to leave their children’s world unlivable. That is our advantage. Huge PR budgets and a lapdog corporate press are industry’s advantages.
A comment for Bryan. You are absolutely correct that rail is the cheapest, cleanest, most efficient method of moving people and things long distances. That said, why not turn your efforts toward reducing subsidies for interstate trucking? Decreasing truck transport in favor of rail would dramatically increase rail jobs, reduce federal spending, and lower oil imports. We need much more of a rail/truck hub system than we have now. It’s ridiculous to (for example) ship oranges from Florida to Ohio by truck.