An international shortage

I am currently at a meeting in the Carpathian Mountains along with some 160 mining engineers from various parts of the world, and they are talking about what must be done in the future to ensure that coal can be mined effectively and efficiently to meet the coming demands for energy as other fuels pass their peak, and alternate sources of energy likely fail to meet the needs that society has for energy.

Most of the attendees are from Poland – a country that has one of the more detailed programs for educating the engineers that the industry needs. Within the comprehensive group of disciplines defined as mining, but including mining machines, robotics, geological engineering etc this country produces a significant part of the total number of global mining engineers that graduate each year. Yet even here academia is struggling to meet the needs that industry has for new engineers. We heard tonight that one company alone would like to hire 300 new engineers – which equates to more than the total graduating class in the country. But to also put that in context it is about equivalent to the total number of mining engineers that are graduated in most of the Western countries including Australia that also produce mining engineers. (The numbers do vary somewhat, however, depending on definition, since in Eastern Europe there are a sufficient number of sub-specialties that accurate counts between countries become more difficult because of problems of cross-discipline identification).

Why do they need these engineers – well consider that, apropos my post from last night on the gas from Turkmenistan, Poland is going to be one of those countries hurt if Russia cannot provide enough gas to meet the levels of import the country needs to meet demand. With little choice Poland must fall back on the resource that allows it to help itself.

Sitting on an estimated 140 years' worth of coal reserves, Poland . . . . which has a population of 38 million, generates 96 percent of its electricity in power stations fired by coal, much of it from the country's still-plentiful Silesian reserves in the south.

In contrast, the proportion in neighbouring Germany is 60 percent, and in France, 10 percent.
. . . . "Poland won't be in a position by 2020 to make significant changes to this dominant technology," said Wladyslaw Mielczarski, an expert from the European Energy Institute think-tank.

So what can the country do? Like so much of the rest of the world it is hard to attract students into this discipline, which still has the image of primitive force – despite the introduction of a variety of technological developments that have considerably “modernized” the field. Those that graduate are still finding enough job offers to go around – within the global market place.
But with demand for new engineers at about twice the supply rate the prospects for dramatic modernization and change are limited at best. Why ? Because there is not enough of a trained workforce with enough time to do the research. And mining is not a major research area of interest in many countries (The United States, for example, closed the Bureau of Mines and the support for research that the agency had, until then, provided).

Is the industry concerned about the problems of carbon dioxide? Well consider that it just sold a large quantity of carbon credits to Japan.

The European Union's largest coal miner Kompania Weglowa will sell carbon dioxide offsets to Japanese utility Chugoku Electric Power, Kompania Weglowa's chief executive said on Tuesday.

Kompania Weglowa will sell 944,000 tonnes of offsets, called Emissions Reduction Units (ERUs), over three years for about 8 million euros ($11.71 million), Miroslaw Kugiel told a news conference.

Yes the industry has problems, and this, one of at least three meetings on Mining Technology in Poland in the next ten days, is trying to bring together those that have chosen to address those problems with technical advances. But in much the same way as in other countries it is much more fashionable, at least publically, to talk about the risks of climate change, than it is to be concerned that the policies that are being put in place will deny the world the energy supplies that are available and that it needs in the short term to sustain society until realistic alternatives can be developed.

There seems to be, from conversations with participants, less money available for research to answer the problems that the industry has to solve. Even with enough reserves, Poland must mine thinner seams at greater depths, and the most productive technologies of today should perhaps be replaced since there may be better alternative methods for those changing conditions. But where is the money to fund those developments?

And who will there be to work on them, when the industrial demand for graduates exceeds (even today) the supply and so salaries rise, graduate student numbers fall, and replacements for faculty become much harder to find.

I suspect that very few, if any, commentators are aware, let alone care about these issues. But these are the problems that will control the fuel bills of the next two decades – and so commentators should be aware at least of the current damage being done to that future.

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.