Jackson Hole Global Forum Interview with Charles K. Ebinger
The Jackson Hole Global Forum Interview Series are ongoing interviews that share the energy, business and civil society views and expertise that will be shared at the upcoming Jackson Hole Global Forum (www.jhcga.org/globalforum), to be held on Nov 8–9, in Jackson Hole.
The Forum will bring together diverse experts to discuss and compare the current challenges and potential opportunities for U.S. coal communities and similar regions around the world to generate new models of economic growth. The forum will focus on the particular challenges faced by carbon-intensive areas. It will help provide the global context, new ideas, and new partnerships for communities, businesses, policymakers and concerned citizens in Wyoming and beyond.
Tell us about and your background, particularly if/as it relates to energy and economics related to coal communities, or elsewhere.
Ebinger: My background in energy has been overwhelmingly focused in the developing world. Although I have been involved with many issues relating to coal and other energy problems in the US for over 40 years, I was a consultant for the World Bank, USAID and other international donor agencies. I’ve worked on coal projects in countries as diverse as South Africa, India, Pakistan, Indonesia, Philippines, Vietnam, China, and so forth. I was not always looking at coal exclusively as a single issue, but rather how coal fits into the broader electricity mix and what was happening in terms of the competition of coal versus these other fuels.
Coal’s Future: As it relates to global energy trends in 2018, over the next ten years, do you see demand for coal increasing, decreasing, or staying the same?
Ebinger: Well, I think I’m a bit of an iconoclast, I certainly think coal is on the decline in the US and perhaps, more broadly, North America, although I think even there, if you’re talking about a ten year time horizon, then I think that coal will still probably contribute somewhere in the low 20s in terms of a percentage in our total electricity mix over that time frame. But internationally, I think a lot of people, particularly in the environmental community, because they feel like they’ve beaten back coal in the United States to some extent, aren’t really looking at what’s happening in a lot of other places in the world. And by that I mean, India and China. While of course both are trying to diversify their economies, the reality is that coal consumption remains quite robust.
In India, nobody wants to admit it, but it’s actually increasing. China, while the Chinese insist they are reducing it, there are a lot of provincial governments and so forth that don’t always follow Beijing’s orders, so in reality I think coal may not be coming down as fast as the official Chinese government sometimes states. This adds up to burgeoning and increasing coal demand in places like India, Pakistan, Vietnam, Malaysia, the Philippines. And that is largely because in all those countries you have vastly underserved populations, many large portions of the population that don’t even have access to a light bulb, and with domestic coal reserves being available in many of those countries, it’s very difficult for a political leader to say, because of climate change or other environmental concerns, “we’re going to stop using coal and the alternative is to not have a light bulb”.
I, for one, think the evidence is overwhelming that especially at this point in time, and particularly if we’re looking at a 10 year time horizon, that coal is going to continue to be very important in the world. Now if we go farther out and we can actually prove that carbon capture and sequestration can be economically competitive, that may be a different ball game, but in the next decade, I don’t think we’re going to see the total usage of really any of the fossil fuels drastically reduced from today’s levels.
Carbon Capture: Nationally, do you see carbon capture technologies starting to become mobilized at scale in the near future (between 5 and 10 years)? What do you think that time period will look like globally?
Ebinger: I think carbon capture’s going to be a tough one. It’s mainly not that I don’t believe that it may be possible to technologically extract a lot of the carbon at the point of consumption in the power sector, but rather when you look at what we do to sequester it, that is going to be a challenge, because many coal plants are not near any natural sequestration sites in terms of underground caverns and such.So you would possibly have to build huge pipelines to move the CO2 to where it could be stored and I have my doubts whether that would be economic in comparison to renewables and other technologies.
I do think that certain countries, like Japan, for example, will continue to push the technology and try to prove it’s possible. I also think at some point with the global shift to natural gas, that we’re going to realize that while gas is only half as dirty as coal, it’s still a fossil fuel and if we see the growth in global energy consumption overall, I think gas is going to be constrained, unless we can prove and see the need in the US for more gas, as well as coal. I’m somewhat of a skeptic, although I think on one hand you can’t ignore the fact that coal is out there and we’re seeing emissions continue to rise on a global level unfortunately, at some point in time, the world may come to the realization that they have to do something.
Renewable Energy: Do you think renewable energy opportunities like wind and solar are the leading opportunities that coal communities like Wyoming that are looking for new economic growth should look to?
There’s no doubt that renewables are growing heavily and will continue to grow quite fast and I don’t think there’s any question that the cost of renewables, which has fallen precipitously, is going to continue to fall. At one of my meetings, someone pointed out that renewables had been falling at around 18% a year for a number of years, with this likely to continue.
I think in terms of communities in Wyoming, the big long-term question for renewables is going to be can we prove large scale battery storage? If we can prove large scale battery technology’s technically economically viable, then I think renewables carry the day and probably back out a lot of other fuels in the power sector. But that’s still not proven. There’s certainly lots of good research going on around the world, but if I were a community in Wyoming, or the state government in Wyoming, that would be a place I’d like to put money and see if there might be some niche for communities in Wyoming to lead the charge in terms of welcoming private sector companies involved in battery storage into the state, with lucrative tax credits or a variety of tax holidays or whatever and I think that is more promising than investing in wind or solar technologies per se. I think the battery question is going to be a thing that really transforms the industry if we can prove that we can get it done.
Policy: With the Clean Power Plan repealed and the U.S. planning to pull out of the Paris Accord, do you see this slowing progress in carbon capture, renewable energy deployment, and other investments associated with reducing carbon emissions
Ebinger: I really don’t because I think not enough attention is paid to some very dynamic things that are going on at the state and local level — everything from renewable portfolio standards to simply demand that a certain amount of new generation will be from renewables or other clean sources.I think it’s enough in the US mindset now among our citizens that it’s not going to be turned back. Certainly it’s not helped by the Trump administration, but I don’t think it’s final by any means and I’m assuming that at least the prospect of a change in administration would mean we are very likely might go back to where we were before.
Relevant Templates: Are there other countries, regions, or cities around the globe that you think coal communities can look towards in terms of relevant economic transformation templates?
Ebinger: In terms of some of the renewables, I think looking to countries like Denmark, which are generating a huge amount of their energy now from offshore wind would make sense. Obviously Wyoming doesn’t have offshore capabilities, but wind technology, and some of the interesting people and companies, involved with it, like in Switzerland, are at the forefront of wind. I think if you look at solar companies around the world I think there’s a lot of opportunity, I’m not so familiar with cities per se, but if you look at some of the things like RGGI (association of all New England states, power pool of all states in New England, which gets all states to work together to reduce emissions) in the Northeast and sharing technology among a number of different states, those are all worthwhile areas to look at.
To learn more about these global themes and the new climate solutions being mobilized that can positively impact coal communities and harness economic diversification, please consider joining us in Jackson Hole from November 8–9, at the Jackson Hole Global Forum:www.jhcga.org/globalforum.