Coal is En Vogue & Begging for Carbon Capture Technology
Economies are pushing for prosperity you can only get with access to high-density energy
We’re a new economics and finance publication with a penchant for environmentalism featuring new releases every single week.
Today’s article is a healthy serving of food for thought about climate action, black-and-white thinking and possible opportunities to mitigate the risk of the heavily increasing use of coal in developing markets. As coal burning revs up in developing economies, it unravels progress made by abstinent economies along the path to environmental decarbonization. Is it fair to judge and reprimand the choice of reaching towards prosperity, or is there some type of approach and technology-based solution suite that can temper the damage, raising all ships in stride?
Actionable answers are not so black and white.
What’s in this article?
The Interrelationship of Energy Density and Developmental Booms
Developing Economies are Choosing Coal in a Race Upwards - So is Germany
Considerations
Decarbonization Tech & Downstream Opportunities
Equities We Like
The Interrelationship of Energy Density and Developmental Booms
Energy is the lifeblood of prosperity. From the dawn of civilization to the modern era, the ability to harness and utilize energy has been the cornerstone of human advancement and economic growth.
The Neolithic, Agricultural Revolution: Cultivating the Seeds of Society
The inception of agriculture marked humanity's first major leap toward prosperity. Humanity gained skills that catupulted our access to reliable food energy. We learned to harness the sun’s energy through a systematic cultivation of crops, and to domesticate select animal species that would go on to form evolution-bending symbiotic relationships. Food could now be banked. This surplus allowed communities to settle, reducing the need for nomadic lifestyles. It freed up time and resources, fostering the development of other critical aspects of civilization such as trade, specialization of labor, and the creation of complex social structures. The energy stored in cultivated crops became the bedrock of stable, growing populations, laying the groundwork for the rise of cities and the advancement of culture, technology, and governance.
The Power of Mechanization
Fast forward to the 18th century, and the Industrial Revolution unleashed an unprecedented wave of prosperity through the innovative use of energy. The steam engine, a pivotal invention of the era, transformed thermal energy from coal into mechanical work, revolutionizing transportation and manufacturing. Factories powered by steam engines could produce goods on a scale never before imagined, drastically reducing costs and making products more accessible. This newfound industrial energy accelerated economic growth, improved living standards, and increased global trade. It also spurred urbanization, as people flocked to cities for work, leading to the development of new social dynamics and infrastructure.
The Modern Era: Sustainable Dense Energy Availability for Future Prosperity
In today's world, the relationship between energy availability and prosperity continues to evolve. The ongoing shift towards sustainable energy sources like solar, wind, and hydroelectric power holds the promise of continued prosperity without the detrimental environmental impacts of fossil fuels. Countries investing in renewable energy are not only securing a cleaner future but also stimulating economic growth through the creation of new industries and job opportunities.
So, you get the point: The story of human progress is inseparable from our ability to harness energy. It propels economies, transforms societies, and opens up new frontiers of possibility. As we move forward, the continuous development and equitable distribution of energy will remain pivotal in fostering global prosperity.
And so, two wicked problems go head to head: The unwavering value of human prosperity and the inconvenient need to protect our fallible environment.
Developing Economies are Choosing Coal in a Race Upwards - So is Germany
Unsurprisingly, developing economies are leaning towards persuasions of energy supply that support their advancement motives. More power means more infrastructure, urbanization, education, innovation, influence and power. Transgress with emissions now, and apologize later, that’s the motto. Coal happens to be highly abundant, with a high Energy Return on Investment - EROI - of 70:1. This removes many of the various handbrakes along the path to development and prosperity. Its no shock that the fiscal luxury of sustainable energy isn’t their first priority.
In context, sustainable, green energy is a luxury brand in the market of energy supply, and developing economies care more about the call than whether it comes from a Samsung or an iPhone.
On May 7th, energy journalist and fellow substacker Robert Bryce wrote an article outlining the major global plot holes in the Western narrative surrounding the great energy transition. In it, much of the content outlines that heavy-hitting growth economies and societies (India, Bangladesh, China, Indonesia and more) are relying increasingly on coal burning to support their energy demands, running laps around the West’s reductions in the process.
It is shaping up to appear that western climate action is in need of regular review and restructuring as we explore ways to become more market and region conscious. Growing societies do not want to forego their chances for prosperity, of course - even as climate conditions intensify. Media biases in the west show a utopian path forward when in reality things are messy and highly dimensional.
Ultimately, we should want to save the earth from any undue destruction, negligence and ecological harm. It’s increasingly clear that this needs to be a focus. However, no matter how dire the data, we cannot deny that other forces and motivations are at play. Aren’t we better off elucidated to the full scope of our effort’s impacts? At the CedarOwl, we believe this knowledge is greatly powerful for identifying sweet spots of opportunity that can help pull sustainability and prosperity into the forefront for all, with an emphasis on agility and systemic, outside-of-the-box global thinking. We will explore these themes deeper here over time.
Climate-action is rife with contention, however the value of true carbon reduction is clear.
Considerations
Growing economies are much less willing to give up short term opportunities to create prosperity.
Prosperity is linked with an abundance of energy. High EROI is the name of the game and coal is evidently preferable in this race.
Short term blanket high-eroi energy delivery is in demand, and should be approached with answers that solve the problem of high emissions.
We would do well to shift from seeing energy as a this-versus-that, heroes and villains game and invite an ecosystem view instead. This allows us to see interconnection, allowing for certain sources to be used at various portions of the demand and distribution channels, not to mention more global thinking and access to private or public funding.
Investment in long-term solutions (renewables, nuclear) should continue, noting where these sources could be best used in the ecosystem.
We need to reframe the business models and politics of energy - moving from hyper-regional, isolated funding environments that create conditions of high risk due to their ambivalence and disconjointedness. Tesla versus Edison was as much about tech as it was a financial war of sorts. In this cautionary tale, we should explore innovation for its highest purpose.
Decarbonization Tech & Downstream Opportunities
Carbon Capture, Utilization and Storage (CCUS) Technologies represent a major down-flowing stream of initiatives that aim to solve for the massive emissions issue of traditional non-renewable energy sources including coal.
Handling CCUS technology opportunities and project implementations from a regional, one-off basis seems like a great first litmus test, but in reality, it dissuades more global thinking that could solve for many of the risk factors present within - and perhaps caused by - the current framework of adoption.
If Carbon Capture tech can provide our planet relief from the swelling cloud of coal emissions, this can and should become part of the short and long term solution.
Carbon Capture
Carbon capture, also known as carbon capture and storage (CCS), is a technology designed to reduce carbon dioxide (CO2) emissions from industrial sources and power plants. The process involves three main steps:
1.Capture: CO2 is captured from the emission sources before it can be released into the atmosphere. This can be done through various methods such as:
- Pre-combustion capture: Capturing CO2 before fossil fuels are burned.
- Post-combustion capture: Capturing CO2 from flue gases after fossil fuels have been burned.
-Oxy-fuel combustion: Burning fossil fuels in oxygen instead of air, resulting in a flue gas that is mostly CO2 and water vapor, making COâ‚‚ easier to capture.
2. Transport: Once captured, CO2 is compressed and transported to a storage site. This is typically done via pipelines, but it can also be transported by ships or other means depending on the location and infrastructure.
3. Storage: The captured CO2 is then injected into deep underground geological formations for long-term storage. These formations include depleted oil and gas fields, deep saline aquifers, and unmineable coal seams. In some cases, CO2 can also be used for enhanced oil recovery (EOR), where it is injected into oil fields to help extract additional oil.
Liquid Carbon
The carbon fetched via CCUS tech is in a liquid state. So, what now? Without factoring in a third party process or partner, the plan is to take the collected liquid CO2 and store it underground in spaces like depleted oil reservoirs.
The problem is, this is not the most stable solution. If a leak were to occur, this could have devastating effects on the environment. This is a risk sentimentally similar to the storage of nuclear waste products. We know top engineers can account for these risks adequately, but what if they don’t have to?
Solid Carbon
RMIT Australia is working on taking liquid carbon and turning it into solid state flakes that can be stably stored or turned into downstream products.
Additionally, a much quicker mimicking of a years-long natural process called mineralization, called ‘Carbfix’, fixes CO2 into porous stone structures. Similar downstream opportunities exist here.
Downstream Product Opportunities
Net-zero jet fuel with Dimensional Energy: Liquid CO2 could be sold directly to Dimensional Energy rather than injecting it underground.
Dimensional Energy uses artificial photosynthesis to produce the raw materials for products like jet fuel. As a finalist in the $20 million Carbon X Prize competition, the startup is in the early stages of showing how recycling CO2 into sustainable fuels could significantly reduce global emissions while also creating a massively profitable industry.
Dimensional Energy’s systems could also be used to produce other products, such as plastics or other types of fuel.
Equities We Like
Next up, let’s explore some equities already involved in CCUS tech that we like, aligning well with the Market Environmentalism approach: