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If environmentalists made major impact shutting down mines, the price of coal would go up incentivizing new ones or at least to increase the output of existing

If environmentalists made major impact shutting down mines, the price of coal would go up incentivizing new ones or at least to increase the output of existing ones - demand hasn’t changed. Just the same with buying gas stations and shutting them down, too.

toomuchtodo 5y ago
That’s not how it works. If the price of coal goes up, other generation technologies outcompete it (renewables and natural gas). By disrupting the fossil fuel supply chain, you apply pressure to the point where coal generators are taken offline and demolished (lots of videos if you Google for coal plant demolition). This ensures you can’t go back, as the lead time is too long to build new coal and no one will finance it in the developed world. Natural gas is already marginal against renewables in many markets, and will face the same fate as coal as renewables build until they’re overbuilt.
- runnerup 5y ago
  That's an expensive bet if your model parameters are off by just a little bit.
  - deleted 5y ago
    [deleted]
  - toomuchtodo 5y ago
    Most risk is manageable, tail risk is unavoidable. You can do everything right and still have a government put you out of business or have the market move against you in a way you couldn’t have predicted. With that said, the theory is sound based on existing economic conditions. 75% of coal generators in the US and roughly 45% globally operate unprofitably, for example (per Bloomberg NEF).
- nine_k 5y ago
  This might work if (1) coal production cannot be increased cheaply enough and (2) alternative generation can be deployed faster than increasing the coal supply. I think that the only kind of generation that can quickly replace coal would be based on burning LNG and turning the same turbines. Solar is great but unstable, adding a battery is pretty expensive yet. Nuclear is sadly way too slow and expensive to build, even if no NIMBY protests would appear.
- H8crilA 5y ago
  FYI, coal is still absolutely huge: https://en.m.wikipedia.org/wiki/World_energy_supply_and_consumption https://en.m.wikipedia.org/wiki/World_energy_supply_and_cons... Don't get fooled by stats from rich countries as those countries "cheat" by importing goods and materials with large entry footprints embedded into them.
  - toomuchtodo 5y ago
    True, but even China and India are moving to renewables rapidly. Renewables are absolutely exploding (confirmed even by the growth rate from your wiki reference) and will like replace most global fossil generation over the next 10-15 years. > By 2026, global renewable electricity capacity is forecast to rise more than 60% from 2020 levels to over 4 800 GW – equivalent to the current total global power capacity of fossil fuels and nuclear combined. Renewables are set to account for almost 95% of the increase in global power capacity through 2026, with solar PV alone providing more than half. The amount of renewable capacity added over the period of 2021 to 2026 is expected to be 50% higher than from 2015 to 2020. This is driven by stronger support from government policies and more ambitious clean energy goals announced before and during the COP26 Climate Change Conference. > The growth of renewables is forecast to increase in all regions compared with the 2015-2020 period. China remains the global leader in the volume of capacity additions: it is expected to reach 1200 GW of total wind and solar capacity in 2026 – four years earlier than its current target of 2030. India is set to come top in terms of the rate of growth, doubling new installations compared with 2015-2020. Deployments in Europe and the United States are also on track to speed up significantly from the previous five years. These four markets together account for 80% of renewable capacity expansion worldwide. https://www.iea.org/news/renewable-electricity-growth-is-accelerating-faster-than-ever-worldwide-supporting-the-emergence-of-the-new-global-energy-economy https://www.iea.org/news/renewable-electricity-growth-is-acc... (IEA: Renewable electricity growth is accelerating faster than ever worldwide, supporting the emergence of the new global energy economy)
  - KennyBlanken 5y ago
    In the US coal has dropped from 30% of our electricity generation to 10% in barely a few years. Coal plants around the country are shutting down because of how expensive coal is compared to wind and solar. Meanwhile we had nearly 20GW of grid-scale solar and wind added in one year, and that doesn't count small installations like residential rooftop systems.
runnerup 5y ago
Yes this is similar to China attempting to corner the market on Lithium, but then as soon as they squeezed prices, Chile suddenly built out a massive amount of Lithium production. You cannot "buy all the coal" any more than you can: - buy all the oil (OPEC vs. NA shale fracking) - buy all the lithium (China vs. Chile) - buy all the magnesium (Freeport, TX vs. China vs. get from any seawater anywhere)
- lkbm 5y ago
  People can still start new mines, but the price of coal will increase due to the capital costs that incurs (and the time it takes to ramp up production). This works the same as a tax on coal, or a subsidy on its competitors: some people will keep using it, but people on the margins will be pushed to the alternative. The fact that the cost increase is likely front-loaded due to the time it takes to ramp up a new mine is probably extra beneficial in the case of coal, since it's on its way out as a technology. Mining coal might be worth it right now, but will it be worth it by the time your new mine is up and running? With lithium, the answer would be yes, because lithium demand is growing. With coal, hopefully not so much.
  - mlyle 5y ago
    > With lithium, the answer would be yes, because lithium demand is growing. With coal, hopefully not so much. Yah, if nothing else the regulatory risks would make one pretty nervous about dumping a ton of money into a new coal mine.
- nextplease 5y ago
  'Sodic aluminum oxide', anyone? Seems like... it is um winter !? (-;
- tyingq 5y ago
  It seemed to work for diamonds.
- marcosdumay 5y ago
  There are big differences on the availability of resources of all of those. Each one will behave differently if you try to "buy it all out". In particular, relatively rare minerals that have been extracted in a relentless scale like coal and oil are harder to replace than very abundant ones that have been extracted on an opportunistic way like lithium. (Magnesium is also very abundant, but has seen more intensive extraction.)
tshaddox 5y ago
It sounds like you’re assuming the price elasticity of demand of coal is low.
luckylion 5y ago
It's pretty much what environmentalists have done with dams, right? They buy them and then dismantle them to restore the natural flow of rivers. It's more effective than lobbying the government to pass legislation forcing the removal of the dam.
- themitigating 5y ago
  Has this happened frequently?
  - Sharlin 5y ago
    A small-ish scale recent example in Finland: https://hiitolanjoki.fi/en/category/hiitolanjoki-river-restoration/ https://hiitolanjoki.fi/en/category/hiitolanjoki-river-resto...
  - luckylion 5y ago
    I don't know. It was a thing a few years ago, I believe I learned about it in the documentary Dam Nation (but I might be mistaken). Google no longer works for me to find things again that I vaguely remember. What I do remember was that they had taken out multiple smaller dams on a river, and if memory serves me right, a group had bought them for a reasonably low amount as the previous owners had no more use for them. Most of what I found with a quick search from what I remembered were public/private partnerships to remove obsolete dams (Riverkeeper seems to be a larger player).
themitigating 5y ago
But there's other products that compete and it takes time for products to get to market. If you shut down some number of oil production the price would go up quickly but it would take much longer for alternative sources to come online. Also when prices of gas goes up, unlike in the past, there are now alternatives in EVs.
KarlKemp 5y ago
Not if environmentalists also managed to shut down or replace consumers of coal, such as power plants. Since power plants are usually run by utility companies that often have governments as major shareholders and the general public (including environmentalists and people sympathetic to their goals) as direct customers, they are more likely to be receptive to pressure than coal mines, which are often privately held corporations that sell into the anonymity of bulk markets.
jsmith99 5y ago
There's a counter argument on the Marginal Revolution economics blog which points out that supply of coal mines is inelastic and environmentalists can simply purchase mining rights for mines that are currently uneconomical to prevent it. https://marginalrevolution.com/marginalrevolution/2021/10/be-green-buy-a-coal-mine.html https://marginalrevolution.com/marginalrevolution/2021/10/be...
- pksebben 5y ago
  thanks for posting this. had no idea about the "use it or lose it" clauses! what the hell, america?

toomuchtodo 5y ago

That’s not how it works. If the price of coal goes up, other generation technologies outcompete it (renewables and natural gas). By disrupting the fossil fuel supply chain, you apply pressure to the point where coal generators are taken offline and demolished (lots of videos if you Google for coal plant demolition). This ensures you can’t go back, as the lead time is too long to build new coal and no one will finance it in the developed world. Natural gas is already marginal against renewables in many markets, and will face the same fate as coal as renewables build until they’re overbuilt.

runnerup 5y ago
That's an expensive bet if your model parameters are off by just a little bit.
- deleted 5y ago
  [deleted]
- toomuchtodo 5y ago
  Most risk is manageable, tail risk is unavoidable. You can do everything right and still have a government put you out of business or have the market move against you in a way you couldn’t have predicted. With that said, the theory is sound based on existing economic conditions. 75% of coal generators in the US and roughly 45% globally operate unprofitably, for example (per Bloomberg NEF).
nine_k 5y ago
This might work if (1) coal production cannot be increased cheaply enough and (2) alternative generation can be deployed faster than increasing the coal supply. I think that the only kind of generation that can quickly replace coal would be based on burning LNG and turning the same turbines. Solar is great but unstable, adding a battery is pretty expensive yet. Nuclear is sadly way too slow and expensive to build, even if no NIMBY protests would appear.
H8crilA 5y ago
FYI, coal is still absolutely huge: https://en.m.wikipedia.org/wiki/World_energy_supply_and_consumption https://en.m.wikipedia.org/wiki/World_energy_supply_and_cons... Don't get fooled by stats from rich countries as those countries "cheat" by importing goods and materials with large entry footprints embedded into them.
- toomuchtodo 5y ago
  True, but even China and India are moving to renewables rapidly. Renewables are absolutely exploding (confirmed even by the growth rate from your wiki reference) and will like replace most global fossil generation over the next 10-15 years. > By 2026, global renewable electricity capacity is forecast to rise more than 60% from 2020 levels to over 4 800 GW – equivalent to the current total global power capacity of fossil fuels and nuclear combined. Renewables are set to account for almost 95% of the increase in global power capacity through 2026, with solar PV alone providing more than half. The amount of renewable capacity added over the period of 2021 to 2026 is expected to be 50% higher than from 2015 to 2020. This is driven by stronger support from government policies and more ambitious clean energy goals announced before and during the COP26 Climate Change Conference. > The growth of renewables is forecast to increase in all regions compared with the 2015-2020 period. China remains the global leader in the volume of capacity additions: it is expected to reach 1200 GW of total wind and solar capacity in 2026 – four years earlier than its current target of 2030. India is set to come top in terms of the rate of growth, doubling new installations compared with 2015-2020. Deployments in Europe and the United States are also on track to speed up significantly from the previous five years. These four markets together account for 80% of renewable capacity expansion worldwide. https://www.iea.org/news/renewable-electricity-growth-is-accelerating-faster-than-ever-worldwide-supporting-the-emergence-of-the-new-global-energy-economy https://www.iea.org/news/renewable-electricity-growth-is-acc... (IEA: Renewable electricity growth is accelerating faster than ever worldwide, supporting the emergence of the new global energy economy)
- KennyBlanken 5y ago
  In the US coal has dropped from 30% of our electricity generation to 10% in barely a few years. Coal plants around the country are shutting down because of how expensive coal is compared to wind and solar. Meanwhile we had nearly 20GW of grid-scale solar and wind added in one year, and that doesn't count small installations like residential rooftop systems.

runnerup 5y ago

Yes this is similar to China attempting to corner the market on Lithium, but then as soon as they squeezed prices, Chile suddenly built out a massive amount of Lithium production. You cannot "buy all the coal" any more than you can: - buy all the oil (OPEC vs. NA shale fracking) - buy all the lithium (China vs. Chile) - buy all the magnesium (Freeport, TX vs. China vs. get from any seawater anywhere)

lkbm 5y ago
People can still start new mines, but the price of coal will increase due to the capital costs that incurs (and the time it takes to ramp up production). This works the same as a tax on coal, or a subsidy on its competitors: some people will keep using it, but people on the margins will be pushed to the alternative. The fact that the cost increase is likely front-loaded due to the time it takes to ramp up a new mine is probably extra beneficial in the case of coal, since it's on its way out as a technology. Mining coal might be worth it right now, but will it be worth it by the time your new mine is up and running? With lithium, the answer would be yes, because lithium demand is growing. With coal, hopefully not so much.
- mlyle 5y ago
  > With lithium, the answer would be yes, because lithium demand is growing. With coal, hopefully not so much. Yah, if nothing else the regulatory risks would make one pretty nervous about dumping a ton of money into a new coal mine.
nextplease 5y ago
'Sodic aluminum oxide', anyone? Seems like... it is um winter !? (-;
tyingq 5y ago
It seemed to work for diamonds.
marcosdumay 5y ago
There are big differences on the availability of resources of all of those. Each one will behave differently if you try to "buy it all out". In particular, relatively rare minerals that have been extracted in a relentless scale like coal and oil are harder to replace than very abundant ones that have been extracted on an opportunistic way like lithium. (Magnesium is also very abundant, but has seen more intensive extraction.)

tshaddox 5y ago

It sounds like you’re assuming the price elasticity of demand of coal is low.

luckylion 5y ago

It's pretty much what environmentalists have done with dams, right? They buy them and then dismantle them to restore the natural flow of rivers. It's more effective than lobbying the government to pass legislation forcing the removal of the dam.

themitigating 5y ago
Has this happened frequently?
- Sharlin 5y ago
  A small-ish scale recent example in Finland: https://hiitolanjoki.fi/en/category/hiitolanjoki-river-restoration/ https://hiitolanjoki.fi/en/category/hiitolanjoki-river-resto...
- luckylion 5y ago
  I don't know. It was a thing a few years ago, I believe I learned about it in the documentary Dam Nation (but I might be mistaken). Google no longer works for me to find things again that I vaguely remember. What I do remember was that they had taken out multiple smaller dams on a river, and if memory serves me right, a group had bought them for a reasonably low amount as the previous owners had no more use for them. Most of what I found with a quick search from what I remembered were public/private partnerships to remove obsolete dams (Riverkeeper seems to be a larger player).

themitigating 5y ago

But there's other products that compete and it takes time for products to get to market. If you shut down some number of oil production the price would go up quickly but it would take much longer for alternative sources to come online. Also when prices of gas goes up, unlike in the past, there are now alternatives in EVs.

KarlKemp 5y ago

Not if environmentalists also managed to shut down or replace consumers of coal, such as power plants. Since power plants are usually run by utility companies that often have governments as major shareholders and the general public (including environmentalists and people sympathetic to their goals) as direct customers, they are more likely to be receptive to pressure than coal mines, which are often privately held corporations that sell into the anonymity of bulk markets.

jsmith99 5y ago

There's a counter argument on the Marginal Revolution economics blog which points out that supply of coal mines is inelastic and environmentalists can simply purchase mining rights for mines that are currently uneconomical to prevent it. https://marginalrevolution.com/marginalrevolution/2021/10/be-green-buy-a-coal-mine.html https://marginalrevolution.com/marginalrevolution/2021/10/be...

pksebben 5y ago
thanks for posting this. had no idea about the "use it or lose it" clauses! what the hell, america?