Thanks to an open letter from BC Premier Christy Clark, Justin Trudeau is seriously considering banning imports of thermal coal from the United States in retaliation for Trump’s tariffs on softwood lumber. Even if a solution is found for the lumber industry, Canada ought to ban all imports of thermal coal anyways. If the Prime Minister wanted to make a bold environmental step forward, he would release a detailed plan to mandate the phase-out of coal for electricity generation in line with his well-publicized goal of doing so by 2030. Pushing the target date up to sooner rather than later would be even better.
What is thermal coal?
Coal is a fossil-fuel rock that is made up of mostly carbon, remaining portions of water, air, hydrogen, and sulfur. Coal is often intermixed with additional impurities which cause significant damage to the local environment as well as a leading source of greenhouses gases. Gases released during burning include carbon dioxide, hydrogen sulfide, ammonia, nitrous oxide, and sulphur oxide. The last two are the cause of acid rain, while nitrous oxide is 300 times more potent of a greenhouse gas than CO2. Additionally, burning it releases coal ash into the local environment and often includes trace amounts of toxins including lead, germanium, arsenic, and uranium. The David Suzuki Foundation points out that, “Air pollutants from coal plants are known to produce heart and lung diseases, aggravate asthma and increase premature deaths and hospital admissions. Coal plants are also a significant source of mercury that is harmful to children exposed during pregnancy and in early life.” This has lead health and environmental groups, such as the Pembina Institute, to call for Canada to completely phase out coal for electricity generation by 2030. A call that Trudeau answered.
But this call was not to completely phase out coal completely, but rather thermal coal specifically. As on the chart shown on the left, there are four main kinds of coal: lignite, sub-bituminous, bituminous, and anthracite. Lignite to low-grade bituminous is used exclusively for electricity generation, known as thermal coal. This more plentiful kind of coal has a lower carbon content and more impurities, making it the most environmentally damaging. High-grade bituminous coal is known as coking coal, which is used to produce coke – a key input in steel production. Anthracite, the rarest of coals, is very high carbon and burns much cleaner compared to other coals. It’s prized for its minimal impurities and therefore used almost exclusively in industrial production.
Canada and Coal
Canada has the fifth largest coal reserves in the world and produces nearly at nearly 10% of the world’s total. In 2010, Coal mining contributed $5.2 billion to Canada’s GDP including employing more than 42,000 people either directly or indirectly. This accounted for 14% of total mining employment.
But the coal is not evenly distributed throughout Canada. Almost 90 percent of the reserves are in western Canada (Saskatchewan, Alberta, British Columbia, and the Yukon) with the remaining 10 percent in Nova Scotia. Coal makes up 13% of Canada’s electricity production overall, but 74% in Alberta, 73% in Saskatchewan, and 60% in Nova Scotia. Many Canadian provinces do not use coal at all, including Quebec, Prince Edward Island, Newfoundland and Labrador, Nunavut, Northwest Territories and Yukon. Ontario recently completed a phase-out of coal in 2014, yet the cost of doing so made the price of electricity rise by 70 percent in the process – which has been a source of political flak to Premier Kathleen Wynne.
The Trudeau government should be commended for making it a national priority to eliminate coal-fired power plants by 2030. But his process of doing so was to negotiate deals with individual provinces under a broader climate change framework. These agreements, not only allow for exceptions, also lack concrete details as well as a dedicated funding source – besides loans from the Infrastructure Bank – to make the transition. This is problematic as future provincial governments may pull out due to political pressure caused by either local job concerns or rising electricity rates. The deal has also been criticized as insufficient for Canada to meet its goals set forth in the Paris Climate Accords.
Why did Christy Clark write that letter?
Even if Trudeau doesn’t ban thermal coal imports because of the softwood dispute, Christy Clark wants to tax the thermal coal industry to death. BC produces very little thermal coal (unlike other Canadian provinces), it’s natural endowments – and correspondingly, its production – is overwhelmingly coking coal. This higher-grade coal is destined for steel production is East Asia, mostly China. BC does not allow for burning coal for electricity production anyways.
Eighty percent of all of Canada’s coal exports – from BC and the other prairie provinces – are shipped through BC’s four shipping terminals (three are outside of Vancouver, and one is to the north in Prince Rupert). American coal companies use BC’s ports to access these East Asian markets as well, because American ports lack the capacity to meet East Asian demand. As the United States moves away from coal – more due to it no longer being price competitive against natural gas from fracking, not environmental regulation – coal companies cite port expansion as a necessary lifeline to their declining industry. But West Coast states have continued to deny American ports the permits to expand based off of environmental concerns.
By banning American imports, it would achieve two objectives: (1) it would decrease port prices for BC coal, making BC’s coal more price competitive overseas while at the same time serving a fatal blow to American coal companies; and (2) by doing so, it would take some of the most environmentally damaging coal off the market, which would make a small dent in decreasing global greenhouse gas emissions. Speeding up the timeline on eliminating coal-fired power plants from Canada’s energy mix – along with providing a funded, concrete plan to do so – would be the next bold step.
* Graphic source: http://history.alberta.ca/energyheritage/coal/early-coal-history-to-1900/global-coal-formation/coal-properties.aspx
Blog entry written by Austin Zwick, PhD Candidate in Planning