Global warming activists are stunned about China's energy plans for the world. Some leave small carbon footprints, they say. All of them are astonished and freaked at what China is doing with coal. After all, coal is twice as dirty as natural gas, although the quality of "clean" coal plants are improving.
China is going to build 700 coal plants in China and 300 more throughout Asia:
Edward Cunningham, a specialist on China and its energy markets at Harvard University, tells NPR that China is building or planning more than 300 coal plants in places as widely spread as Turkey, Vietnam, Indonesia, Bangladesh, Egypt and the Philippines.
This is why we should not be too alarmed at this development. China is shutting down old coal plants. It is a nation going green in many ways, including in encouraging electric cars and clean tech, such as solar panels and wind turbines. China is taking the lead in these industries.
There are four points of genius in what China is doing with coal.
1. China is keeping coal employees working.
2. China's new generation power plants are far cleaner than American coal plants. It is still coal, though. China has the money to build for its energy future. Apparently the United States does not although the USA has other options that China does not have, like natural gas.
3. China is conforming to Paris Accords by being super green in other ways, while producing cleaner coal.
4. China is not afraid of manufacturing leaving China because that nation will supply the power to most nations that benefit from the tariff wars. China, then, cannot totally lose the benefits of industry growth among its neighbors.
What Is China's Plan for Coal All About?
So, what is China's plan for coal all about? The Center for American Progress went to China a few years back and explained it:
We found that the nation’s coal sector is undergoing a massive transformation that extends from the mines to the power plants, from Ordos to Shanghai. China is indeed going green. The nation is on track to overdeliver on the emissions reduction commitments it put forward under the Paris climate agreement, and making coal cleaner is an integral part of the process.
China is going green but that won't provide enough energy production:
While China and the United States have roughly the same land mass, however, China has 1.3 billion people to the United States’ 325 million.2 It needs an electricity system that is much larger, so adding the renewable equivalent of one entire U.S. electricity system is not enough to replace coal in the near to medium term. To bridge the gap, China is rolling out new technologies to drastically reduce local air pollution and climate emissions from the nation’s remaining coal plants.
And the new coal plants will in a relative sense limit air pollution as well. China's coal plants are giant pressure cookers, producing superheated steam. Temperatures reached rate the coal plants, from subcritical (705F) to supercritical (100F+) to ultra supercritical (1400 F).
Coal is vitally important to world energy needs:
Some 27% of primary energy needs are met by coal and 38% of electricity is generated from coal. About 70% of world steel production depends on coal feedstock. Coal is the world's most abundant and widely distributed fossil fuel source. However, each year burning coal produces over 14 billion tonnes of carbon dioxide (CO2), which is released to the atmosphere, most of this being from power generation.
Development of new 'clean coal' technologies is attempting to address this problem so that the world's enormous resources of coal can be utilised for future generations without contributing to global warming. Much of the challenge is in commercialising the technology so that coal use would remain economically competitive despite the cost of achieving low, and eventually 'near-zero', emissions. The technologies are both costly and energy-intensive.
Making the Belt and Road Work Over USA Objections
The Chinese are admitting that the belt and road is a commercial and military expansion of Chinese influence. However, it appears that the Chinese expansion is worrying the USA even though over 2/3rds of the world population has signed on or shown interest:
Chinese leader Xi Jinping in 2017 referred to the “One Belt, One Road” (OBOR, also known as Belt and Road) as the “project of the century” that will create the world’s largest web of ports, railways, energy pipelines, highways and streamlined border crossings.
The US fears that belt and road or OBOR, or BRI, is a Trojan horse that will ultimately contain military hypersonic weapons threatening US dominance. But that seems difficult to take seriously, since the United States has an open invitation to participate financially in Belt and Road. The US would be invested in the Chinese hope of greater prosperity for the world. China looks at the major nations and sees dereliction in helping the world prosper.
The way the Fed is acting, in panic these days, or at least is being forced to speak in panic mode, we need to take a chance as a nation on world prosperity. We squandered much time deliberately keeping other nations down and the same policy is being attempted against China. In doing so, we are keeping the United States down in order to protect our turf. It makes no real sense.
The US just gives foreign aid, and not much real effort takes place to actually develop emerging nations, while China has given these nations hope. Our exports to China are cratering. We either support free trade or go completely rogue and put tariffs on everyone. We cannot win a trade war with China when all of our power plants would be considered dirty according to Chinese standards.
The point is, China has the financial means, the clean overall energy plan that works for them, and the support of most of the world. Just recently a large portion of the silk road, part of the belt in belt and road, has been approved.
Coal plant development is a way for China to make the Belt and Road work efficiently. Power has to be supplied to Asia, to the poor nations China aims to help, like Bangladesh, Vietnam, Turkey, Egypt and Indonesia. China is active in the middle east, Tunisia and Syria rebuilding, etc., and in Africa, as the first military base offshore will be built there.
There is a lot of wrong interpretation regarding China coal. An LA Times article misses the boat by saying China wants clean at home and dirty abroad. That is not true. China wants cleaner tough standards for coal at home and abroad. China has the wealth to enable it to change power plants if different demands from Chinese citizens requires cleaner air. The nations to receive the new plants may not have that flexibility but the new plants will be cleaner than old coal plants. Certainly it would be better if they did.
The Belt and Road will be accepted by the world with even more excitement if it works, if the pollution is controlled and if the roads and ports are kept up. That will be the biggest challenge besides possible US interference.
That interference will be made less popular if nations like Israel, Japan and South Korea, who are in on Belt and Road financing along with China, keep the dream of a developed Asia alive.
Hidden Debt
If hidden debt connects China to emerging markets and then to advanced economies, nations in the west have limited control over what China does:
Advanced and higher middle income countries tend to receive portfolio debt flows, via sovereign bond purchases of the People’s Bank of China. As a result, many advanced countries have become highly indebted towards the Chinese government.
Capital flows internationally are difficult to measure when Chinese hidden lending is taken into account. Most of the Chinese loans are backed by emerging market collateral. Efforts to weaken China on the part of the west, or a slowing in emerging markets, with all these loans out, could ultimately effect capital flows to big western banks.
We know there were commodity issues affecting large western banks in the past, back in 2014:
...most large U.S. banks make commodities-based loans, and the practice has been growing recently. Last year, banks around the world lent $687 billion to commodities-based businesses, according to Bloomberg...
...Many of these loans might not be factored in the estimates that Fitch and others have put together to calculate U.S. banks’ exposure to China...
...What’s more, when it comes to commodities, some banks might not even realize they are taking on China risk...
Western nations need to join China in attempting to make the world prosper. Trust is what is missing. It has to be restored or the future of world prosperity is in jeopardy. The US demands transparency from China? Perhaps it should enter into joint efforts to do the belt and road. The Chinese have offered an open invitation.
Whoever has the energy controls the world. The US has energy enough to avoid coal for now, but China has coal, the most abundant resource. Look for coal to make a comeback in China and in much of the world. How China is impacted by the economic slowdown will determine if coal is a good bet.
If the Great Depression was an energy crisis the world has to hope deep down that China's coal plants multiply like rabbits as a slowdown in the world economy nears. Utopian aspirations for cooling global warming will need to be put off for another day.
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