Spotlight: Coal Comes in From the Cold
BY Inc. staff
Is the dirtiest industry poised for a comeback?
If there's such a thing as a hot mineral, then coal is it. Though environmental and labor concerns still cloud the industry's future, consumption is rising and regulation is easing. Ninety-eight new coal-burning electric plants are in the planning stages in 34 states. There's even a rail line being built across Minnesota to transport western coal to the east. To understand the surge of interest in coal -- and learn about the past -- senior editor Mike Hofman talked with Barbara Freese, author of the new book Coal: A Human History.
Why is coal suddenly the next big thing?
American coal consumption has been rising for years, not because of new coal plants but because the existing plants are running harder. Now, though, there are dozens of new plants in the planning stages -- in no small part because Bush supports coal use in his energy plan and opposes any new laws that might restrict greenhouse gases. The industry is delighted. It played a key role in delivering West Virginia's electoral votes to Bush in the 2000 election -- without which he would not be in the White House.
Does it actually make sense to invest in coal power now?
There's something almost surreal about this. Companies are investing billions of dollars in coal, as if global warming were just going to go away. It will take decades to recoup an investment in a new plant, but I can't imagine America will wait that long to start controlling greenhouse gases, and when we do get started, coal burning will likely be the first target. The science has become so very compelling -- and is getting stronger -- that climate change is a true threat. The rest of the developed world is going forward on the Kyoto protocol [a pact among countries to reduce greenhouse-gas emissions], and over time we can hardly ignore what our trade partners are doing.
Your book points out that entrepreneurs have flocked to the coal industry for centuries despite the inherent risk.
Yes, coal has always attracted the gamblers. To get it out of the mountains, the first coal entrepreneurs built arks that were 90 feet long, loaded them up with coal, and then had to shoot the rapids on the Lehigh River. A lot of the arks sank. The industry languished until a man named Jacob Cist inherited a mine at the time of the War of 1812 and mobilized farm boys to mine coal almost as a patriotic duty.
Did Cist become the Bill Gates of coal?
Not exactly. His mine went under. That's how it always was. The money tended to flow out of the coal regions and out of the industry. There was a land rush in 1829 in which thousands of people -- half of them teenagers -- moved into the eastern coalfields. Most of them left quickly. The railroads soon bought up the mines, and the banks had control of the railroads. Coal was not a good place to get filthy rich.
Will there be a place for entrepreneurs in coal in the future?
Not in coal but in alternative energy. The fun and profit is in new technologies. We can invest in old systems or in future clean ones, and I have to think that American companies are not going to sit this one out.