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Make Me Smart with Kai and Molly

Episode 136: VC hype vs. Wall Street

Oct 22, 2019

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Brexit déjà vu

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Marketplace Tech

Texas has its own supply of cheap — and dirty — coal

Marketplace Contributor Aug 6, 2015
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Oil, and then natural gas, made Texas famous. Now it’s famous as well for having far and away the most wind energy of any state. But here’s a little-known fact: Texas is a major coal producer, and its coal is not like most other states’ coal. It’s an infant phase, still damp, called lignite.

“Basically it is brown dirt,” says Fred Beach, assistant director at the University of Texas Energy Institute. “Oily mud is another way we commonly refer to it.”

Just past the town of Elgin, known for its barbecue and sausage, there’s a dragline practically hanging over the road on a recent day.

In Texas, shallow coal is often mined beneath pasture land.

In Texas, shallow coal is often mined beneath pasture land. 

“Most people in Austin really have no clue that there is a strip mine located only 30 miles away from the city,” says Tom Edgar, director of the University of Texas Energy Institute. “We pay more attention to renewable energy. So it’s kind of a well-kept secret.”

About a dozen Texas coal mines lie in a necklace from Louisiana toward the border with Mexico, across the giant state. That line is no accident. It traces the ancient shoreline of Texas. Millennia ago, vegetation, trees and woody matter were deposited here.

“Given enough time, given pressure and heat, you actually form this coal-like substance,” Edgar says.

The coal-like substance is called brown coal in Europe, where it still makes up a substantial piece of the power pie. But it’s not so carbon rich. You need to burn almost twice as much lignite as bituminous coal (the most commonly used in electricity generation) to get the same amount of energy, according to “Coal Data: A Reference” and the Energy Information Administration.

“You also get a whole lot more ash generated,” Beach says. “You get more particulate in the exhaust fume gases. So lignite has a lot going against it.”

It’s also wet.

“A lot of the energy that could be used to produce electricity is actually used to evaporate the water,” says J.P. Nicot, of UT’s Bureau of Economic Geology.

But Texas figured out a way to make this low-quality fuel pencil out nonetheless about 30 years ago by building the coal power plants next to the mines. They’re called mine mouth power plants.

“You’re literally digging it out of the ground, putting it on a conveyor belt, and it’s going right into the power plant,” Beach says.

You can’t transport lignite for another reason. It has a tendency to catch fire. But used right there in place, the fuel is cheap, it’s steady and it’s local. In short, it’s irreplaceable, says Mike Nasi, an attorney with the Gulf Coast Lignite Coalition. Together with coal imported from outside the state, this is how Texas generates more than a third of its juice.

Texas coal mining regions

Texas coal mining regions

“It’s a significant hedge against price volatility,” Nasi says. “It’s only 38 percent of our grid, but it’s an extremely valuable part.”

(According to the Electric Reliability Council of Texas, the independent system operator for the state, coal generated 36 percent of electricity in 2014.)

Texas’ power-heavy industries, like refining and chemicals, rely on this inexpensive power. This is in large part why Texas so fiercely opposes the Obama administration’s Clean Power Plan, which forces reductions in carbon emissions from each state’s power generators.

“It’s not just the coal producers and power producers that show up and ask for policies to be reasonable,” Nasi says. “It is Dow chemical. It is Occidental Petroleum, it is Valero. And the reason is their single highest line-item cost is electricity.”

The CO2 cuts vary by state. Between a third and half of Texas’ coal power plants will likely close. But Nasi says that doesn’t mean Texas’ second-rate coal is going to stay in the ground now, as climate scientists say it should.

“Lignite is going to continue to power that fleet,” he predicts.

Ingrid Lobet is a reporter for BURN from SoundVision Productions, with support from the Sloan Foundation.

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