4 February, 2008
The Wall Street Journal reported today that three of the biggest US investment banks are getting cold feet about financing new coal power plants as they expect US policy-makers to introduce a carbon capture-and-trade system in the future. The environmental standards which the three banks will lay down could mean that coal plants without carbon capture and storage could have a hard time to get financed.
The news follows close upon another setback for the US coal industry. On 29 January, the US Department of Energy decided to withdraw funding for the US’ biggest carbon and capture demonstration plant FutureGen (see Wikipedia) because of costs overrun.
The bad news comes at a time of rising prices for coal as a result of supply problems from South Africa and Australia. In China, coal stocks have dwindled to emergency levels. Although the current supply problems are not geological, there are more and more experts who are starting to have doubts about the future reserves of coal. I reported on this in earlier posts. An excellent summary of the coal reserves issue (“The great coal hole“) has recently been published by David Strahan, the author of the must-read book “The last oil shock”. As the world is starting a new rush on coal (see the latest IEA World Energy Outlook 2007), the question of the real coal reserves will become one of the key questions for the future energy/climate debate. US author Richard Heinberg has just published a new article on this Great Coal Rush (and why it will fail) on Global Public Media.Author : Willy De Backer