From Kyoto To … Coal ??
Posted on May 30, 2008
Filed Under Muse, News, Politics |
Look which country is beginning to develop their coal resources again.
Japan is recognizing that with oil prices as high as $135 a barrel that suddenly, alternative forms of energy are now becoming more attractive options.
But after decades of seemingly terminal decline, Japan’s coal country is stirring again. With energy prices reaching record highs — oil settled above $135 a barrel on Thursday — Japan’s high-cost mines are suddenly competitive again, and demand for their coal is booming. Production has jumped to its highest in nearly four decades, creating a sensation rarely felt in these mining communities: hope.
“We are seeing a flicker of light after long darkness,” said Michio Sakurai, the mayor of Bibai, on Japan’s northernmost island of Hokkaido. “We never imagined coal would actually make a comeback.”
Soaring commodity prices have had distorting effects across the global economy, driving up food prices and prompting fears of future energy shortages. But they have been an unanticipated boon to the coal producing regions of countries like Japan that had written off coal mining as a relic of the Industrial Revolution.
This is basic economics. As a commodity goes up in price, seemingly expensive options suddenly become cost-effective to use.
Remember, we’ve also had the technological ability to turn coal into a synthetic oil so that it can be refined to use in our automobiles. When did we have this technology? The 1920’s - when German scientists developed it!
So why haven’t we gone and done this? Well the plain answer is economics. In the 1920’s you could literally stick a pole in the ground and strike oil in many places around the world. Oil was therefore easier and cheaper to extract than the process of turning coal into oil.
Now that oil is so expensive, alternative methods of obtaining energy are being explored (along with drilling in places where it used to be “expensive” to drill).
Thai’s Take
Its a win-win (or lose-lose) depending upon where you stand.
We can mitigate the price of oil by building more refineries in the U.S. We haven’t built a new one in the last 30 years and the ones we have are already running at their peak. But for now, the high price of oil is allowing the oil companies to drill in areas that used to be too costly to develop. It is allowing us to look at a technology that is almost 90 years old (but never widely used). It is also allowing us to start looking at renewable sources of energy (solar, wind, hydro, etc…) and to develop these into viable solutions. However, it is driving up prices of everything and making people go crazy about bio-fuels (using corn, sugar, etc…) to make ethanol. All this does is drive up the price of food and makes it that much more difficult for poor and starving people to eat.
Make no mistake, someday we will need to get off the “oil-standard”, but that day ain’t coming anytime soon so we need to find ways of increasing our oil production to alleviate the price at the pump. This means allowing states to drill off their coastlines and allowing Alaska to drill in ANWR. It also means building more refineries and more nuclear power plants. We also need the price to come down so that the price of food will also come down ( the ”greens” pushing for biofuel have blood on their hands as far as I’m concerned). And in the meantime, the high price at the pump is making it so we can develop alternative means and renewable sources of energy.
So - try to lobby your Congressman or Senator to have them allow for more drilling and add more refineries and nuclear power plants. And in the meantime, realize that economics will ensure that while oil is high, it will begin to lose its prominence enough to allow some enterprising people to make enough breakthroughs to replace it.
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