Global Coal in Freefall, Tar Sands Development Drying Up (Bad News for Keystone XL)
by Joshua Frank - CounterPunch
March 24, 2017
Environmentalists don’t have much to be happy about these days. The Earth is warming fast, species are dying everywhere and our forests and oceans are being destroyed. At times there seems to be no turning back, and perhaps there isn’t. Humans’ collective toll on the planet, with industrialization and greed as the driving forces, may be irreparable.
Deepwater Horizon, Gulf of Mexico 2010
Even so, that doesn’t mean we can’t celebrate the few victories that do occasionally come our way.
On Friday, Donald Trump’s State Department officially approved the controversial Keystone XL pipeline. While President Obama already okayed the southern portion of KXL, it was predicted Trump would green light its northern expansion. If completed, the pipeline could carry oil from Canada’s tar sands in Alberta down to Gulf Coast of Texas.
Certainly, this isn’t good news, but what is great news is the whole venture may not be profitable enough to move forward, despite Trump’s glowing stamp of approval.
In early March, Royal Dutch Shell announced they were pulling out and going to sell their tar sands’ assets. Why? Tar sands aren’t likely to be profitable in the future. Continued low oil prices, coupled with stronger climate policies around the world, are forcing Shell and others to reconsider their investments.
According to Environmental Defense, a total of seven multinational oil companies are either scaling back their operations in Alberta’s tar sands or yanking their operations out altogether. These companies include: ExxonMobil, ConocoPhillips, Statoil, Koch Industries, Marathon Oil, Imperial Oil and now Shell.
ExxonMobil decided to not develop their 3.6 billion barrel tar sand reserve. Imperial stated it was going to “write-down” its 2.8 billion stake, citing low oil prices. Koch ended its plans to excavate the proposed Muskwa tar sands project. Marathon cut tar sands from its portfolio because of its high cost. ConocoPhillips said low energy prices make their 2 billion barrel venture too risky and Statoil sold its tar sand interests at a loss.
All in all, it looks like the investment dollars for tar sands exploitation is drying up quickly, and when the money evaporates so does the oil. Of course, this doesn’t bode well for Keystone’s proponents. Expensive, dirty tar sand oil won’t be running across the heartland of the United States if there’s no money to be made.
If this wasn’t enough good news, a joint report put out this week by CoalSwarm, the Sierra Club and Greenpeace found a 62 percent decline in new coal plant construction around the globe. To top it off, there’s been an 80 percent drop off of new coal plant permits in China alone. Coal plant construction around the world is in freefall and their may be no turning back.
“This has been a messy year, and an unusual one,” says Ted Nace, director of CoalSwarm.
“It’s not normal to see construction frozen at scores of locations, but central authorities in China and bankers in India have come to recognize overbuilding of coal plants is a major waste of resources. However abrupt, the shift from fossil fuels to clean sources in the power sector is a positive one for health, climate security, and jobs. And by all indications, the shift is unstoppable.”
While Trump claims that he’s set to bring back the US’s barely breathing coal industry and black lung with it, global economics and common sense see otherwise. Since 2010, a total of 251 coal plants in the US have announced retirement and are closing in the near future or have already. Sorry Donny.
Dirty coal and now tar sands may soon be dead — or rather, buried in the ground where it should have all stayed in the first place.
JOSHUA FRANK is managing editor of CounterPunch. His most recent book is Hopeless: Barack Obama and the Politics of Illusion, co-edited with Jeffrey St. Clair and published by AK Press. He can be reached at email@example.com. You can follow him on Twitter @joshua__frank.
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