Tech Talk - Employment Opportunities

In 1961 I started my career as a Student Apprentice in the National Coal Board in England, going on a year later, under a National Coal Board Scholarship, to the University of Leeds, where I studied for both my bachelor and doctoral degrees. As I recall the NCB had authorization for 100 scholarships a year, but rarely awarded more than a few (I was the only one at Leeds in my year). By the time that I received my second degree, in 1968, the writing was on the wall for the British Coal industry – folk I knew with 1st class degrees were finding work as face deputies, with continual reduction in pit numbers making promotion beyond that point hard to anticipate. When I mentioned an offer from America the folk in the Personnel Office suggested that I would be wise to take it.

When I came to the USA the coal industry was also in a bad way. Coal prices were low, and the market very competitive. As a consequence there was little interest in mining research, and student enrolment in Mining totaled around 40, for the four-to-five year course that we offered for undergraduates at the time. Numbers in fact were so low that I was asked to teach in another department, since we did not have the numbers to justify the classes in Mining. And then along came the first Oil Crisis.

Suddenly we did not have enough room, with individual classes rising to enrolments of up to 50 students. Colleagues were teaching three separate lab classes for the same subject to meet the demand. As an anecdote of the times I remember going to a Mining Conference in Pittsburg and, at the dinner, being asked what I wanted to drink, when I asked for Scotch I got a bottle – of a quite expensive brand. This continued through the beginning of the 1980’s and we were learning to accommodate the larger numbers and adjust to having some financial security in our funding. The only problem was that we were finding it hard to attract students for graduate school, since job offers were multiple and lucrative. The market was good both for coal mining and in the metals side of the house (gold, lead and other minerals). (It was in this interval that I was named the second Curators’ Professor of the campus, following, inter alia, our development of a novel mining machine).

And then Saudi Arabia re-opened the taps, and the price of oil fell, and suddenly there was a glut of coal on the market. Suddenly we were faced with highly qualified graduates calling back to see if they could get into graduate school, enrolment began to shrink rapidly as word got back to the high schools about the poor employment prospects. Those of us seeking research funding were driven to look beyond the discipline of Mining into other applications of the technology, if we were to be able to find funding. We got a new Dean early in that time, and I rather suspect that there was not a year over his decade or so of tenure that he was not faced with cutting the school budget. One year the Mining class was down to an enrolment of one student for his year, and talks of mergers and dissolution were in the air.

But then the price of oil began to rise again, coal markets began to grow, both nationally and abroad, and metals prices also began to rise. And we slowly grew back up to, and currently beyond our previous records for enrolment at the beginning of the 80’s. Salaries and opportunities have grown and, since we now recruit more actively abroad, even with a strong domestic demand for graduate students, our graduate program has also surged. Faculty work-loads have also grown, and with the odd retirement or move elsewhere there has been a shortage of qualified faculty, and only limited time available to develop new research programs, despite new levels of funding.

And yet, just as the schools become complacent with their new prosperity, there are signs that we have perhaps passed the current peak, and may well be heading into the next cycle of down and then up. The writing is now yet that deeply inscribed into the walls, but there are some worrisome trends that today’s Department Chairs are, no doubt, already well aware of.

In the United States the TVA has just announced that it is moving away from the use of coal in its power plants. The goal is to reduce the share that coal provides to electricity production from 38% to 20%, while raising the amount generated by renewables from 15.7% to 20%. It is intended, over time, that a third 20% will come from natural gas, and nuclear power will make up the total to 100%.

The impact of this, and similar decisions being made at power plants around the country, is already evident. The EIA, in their November Short-Term Energy Outlook, has noted that employment in the Kentucky coal industry has fallen 24% this year. And while the fall in production is, as yet, not that great, with exports currently failing to pick up the decline, the future is, yet again, not that promising.

Figure 1. Trends in US Coal Consumption (EIA)

At the same time there has been a little wobble in the gold market. Barrick Gold Corp. the largest gold mining company, has seen its stock stumble over the past year.

Figure 2. Price of Barrick Gold stock over the past year (Forbes )

Currently traders are anticipating that the price of gold will have to fall below $1,200 an ounce before demand will rekindle.

These are, perhaps as yet small straws in the wind, yet even as the global economy continues to struggle upwards I suspect that the lot of the Mining Engineer may soon be a little more complicated than it has been for a while. This last surge in employment and opportunities saw the end of my generation to a large extent, so that we have been replaced with a much younger crop, since the intervening management layer was not formed, since there was neither the demand nor the supply available in those lean years to create such a layer.

And yet it is unlikely that the future will be as bleak as we saw in the 60’s and 80’s. The predictions of vast resources from shale gas to help many countries meet their energy needs have not yet proved to be real. In the meanwhile, as the Polish experience indicates governments have to ensure that their constituents have adequate fuel supplies at a reasonable cost – and for many countries that means a coal future – even if, as in Poland’s case, they have to start importing it to keep up with demand.

Energy Summit - the second part (until 3 pm)

This is the second post on the contents of the Energy Summit held at the University of Missouri this week. The first post covered the keynote address by T. Boone Pickens, and that can now be seen, together with Chancellor Carney’s opening remarks, and those of Senators Bond and McCaskill as a video. (Warning it is a 1 hr 30 min video and some 219 MB). Mr. Pickens remarks were also picked up by the local Missourian. (The school of journalism was also holding briefings and interviews that ran concurrent with the summit). After the keynote, the Summit got underway with a brief review, by the chief research officers of the four campuses of the University of Missouri system, of the energy related research that each was carrying out. This was a fairly top level skim through a project range that covered fuel cells, hydrogen, a new way of storing gas on carbon bricks, and studies on a wide range of pathways to generate transportation fuels, and also prefaced a number of the papers, poster presentations and displays, the latter two of which were going on outside the main auditorium.

The first invited Speakers then came to the podium with Dale Klein, Chairman of the U.S. Nuclear Regulatory Commission leading off the presentations.

Mr Kein noted that his agency is a regulator, not an advocate, and that he is currently looking at 17 applications for 26 new nuclear plants, with another 3 applications for 5 plants being anticipated. (However this is likely to include the AmerenUE application for a second plant at their Fulton site. The company indefinitely suspended that request this morning, just after getting word that a bill that would allow it to charge for construction before it was finished was not going to happen).

Mr Klein walked us through the process of getting a permit, noting that it would take 30 months to review the application, 12 months to get public comment, and then it might take some 44 months to get the plant built. The current costs are in the range of $5 - $7 billion per plant, and they are licensed for 40 years initially, with a possible 20-year extension. (For comparison he noted that the USS Enterprise, the first nuclear powered aircraft carrier, was commissioned in 1960, and is coming to the end of its service life –within 3 – 5 years. He felt that the public needs more education on the benefits of nuclear power, and what not to be afraid of.

Coming next to the podium, Dr. Joan Woodard ( executive vice president at Sandia National Labs) mentioned her last visit to town, some 35 years ago as she drove out to Sandia to take up her first job there. She talked of nations climbing the energy ladder which takes nations from no power, through burning dung, and then to carbon fuels and to higher levels of consumption as society advances. However she noted that the US curve was flattening as is that of the European Union, and it is other nations, from Korea and Australia to China and India that are growing and seeing increased levels of energy demand as that growth continues. This is, in time, bound to strain the system, due to the demographics of a growing world population combined with growing standards of living, and thus individual energy demands.

She felt that Secretary Chu does a “wonderful job” in explaining the coming mandate that is Climate Change, and she noted the ever-shrinking condition of the Arctic ice cap. (Obviously she has not seen the latest ice data from the Arctic, which shows that the coverage is returning to the seasonal normal for the past 28 years, since she commented that the rate of shrinkage of the ice cap was accelerating, when, if you look at the plot, it obviously isn’t.) Nevertheless, in light of the mandate she felt that the energy enterprise must change to encompass not only the desire for economic prosperity (the ladder) and the regional environment, but also national security issues. In this she felt that while Global Trade can be good, it also creates tensions over such concerns as Russia, and now China buying up large quantities of the world reserves of a number of commodities. And in that regard we must consider that Chinese companies that are doing the purchasing are an extension of the state.

Droughts in Africa will drive migrations, leading to further conflict. Further the US is vulnerable to national disasters. Both of which threaten our security, although she then went on to mention more conventional threats. These include attacks by hackers into the control systems for our energy networks and the threats posed by global proliferation of nuclear knowledge. To protect against these threats we need a system that will, if it does fail, does so “gracefully” but which has high reliability and resilience against attack.

Daniel Cole senior vice president of Ameren then talked about his early job as a “pirate” down at Branson, MO. Here as part of the “tourist” entertainment he would regularly be pelted with bags filled with rock, but simulating gold. That job was excellent training for his current one with the utility. The company has 2.4 million electric customers, and a million natural gas customers. They produce some 16,600 MW which is nominally 61% coal, 30% natural gas fired. However because coal provides baseload and natural gas is for peaking demand supply, it turns out that 85% of actual production is coal-fired. It is also cheaper. But in the process last year, for example, it produced 70 million tons of carbon dioxide.

The nation produced some 6 billion tons. Now if the system goes to a cap and trade system and one might project growth to 6.2 billion tons generated in a couple of years, the cap might instead mandate total production is held to 5.5 billion tons. This amount would then be parceled out as a series of allocations. Each allocation would either be designated to a company at a price or subject to auction. The company could also offset some of its production with some alternate activity (such as paying for no-till farming for example).

They priced the cost that the company would face after the Lieberman Warner bill was proposed. It set a price of $50/allowance (1 ton of carbon) in 2015, rising to $100 by 2030. With the production of the company being 70 million tons, this will give an additional bill of $3.5 billion in 2015. This will mean, according to Mr Cole, the rapid disappearance of existing coal plants, but Missouri currently has the lowest electricity rates in the nation, and such a burden on their carbon production would have to be passed on as a very rapid increase in power costs per kWh to the customer to more than double that of today. The results when the requirements of the Waxman Markey bill were evaluated were even more severe.

Ameren is part of the Electric Power Research Institute (EPRI) which has examined different technologies (pdf) to see if, in fact, these targets are attainable, anticipating increases in efficiency of use, and a 0.1 to 0.7% growth in demand.

Their conclusion was that renewable sources will only act to stabilize carbon dioxide levels, and that while increased use of nuclear power can initiate a drop in levels, it will be a switch to advanced coal generation that will be required to make significant reductions. But to have a real impact the focus must look at coal, focus on adoption of new technology, and be international in application. But the answers will come as silver buckshot not as a silver bullet.

This is the third post on the Energy Summit
The second post covered the Keynote, and the first described the program.

The final speeches of the first day will be covered next.