Coal
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Mark C. Thurber
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The Biden administration has pledged to reduce US greenhouse gas emissions to half of 2005 levels by 2030. A large share of these reductions would have to come from the power sector, with high-emitting coal-fired power plants being obvious targets for closure. Program on Energy and Sustainable Development (PESD) Associate Director Mark Thurber spoke on NPR's Here & Now about why phasing out coal-fired generation in the US by 2030 is an achievable goal -- and how we need to take care of affected workers along the way.  Listen to the interview.

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Today, the Sacramento Bee and San Jose Mercury News both quoted Program on Energy and Sustainable Development Director Frank Wolak in their stories about California’s recent blackouts.  In the Sacramento Bee’s article about the California Independent System Operator declaring a temporary ban on “convergency bidding,” Wolak came out in support of the system comprised of power generators and traders saying that it sends the proper price signals to drive supply. The San Jose Mercury News article said that California electricity shortages will be more common during major heat waves due to the state’s shift away from fossil fuels providing more consistent power to cleaner but more intermittent sources such as solar and wind energy.  “We have a much more risky supply of energy now because the sun doesn’t always shine when we want and the wind doesn’t always blow when we want,” said Wolak. “We need more tools to manage that risk. We need more insurance against the supply shortfalls.”

 

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Wolak: Solving California’s Power Crisis

Wolak: Solving California’s Power Crisis
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Due to the COVID-19 pandemic, global demand for coal has experienced a significant drop - and air quality has improved accordingly. In a virtual seminar moderated by Program on Energy and Sustainable Development (PESD) Director Frank Wolak, PESD Associate Director Mark Thurber offered his assessment on whether the reduced role of coal and other fossil fuels is likely to be permanent, or whether they will emerge stronger than ever when the pandemic is over. Recorded talk

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Unconventional natural gas and the technologies developed to extract it in the U.S. point to a possible lower carbon energy future for China that can be facilitated through international cooperation between them, improving China's reliance on domestically produced coal, and creating economic and environmental benefits for both countries as well as the rest of the world.

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Frank Wolak
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Last week, Stanford's Board of Trustees announced that the university would not directly invest funds from its endowment in coal mining companies.  Even the strongest advocates of this action acknowledge that it is a symbolic gesture with little direct effect on the coal industry or global greenhouse gas emissions.  But if a university administration wants to take symbolic (or real) action on climate change, is coal investment a wise choice?

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Los Angeles Times, Op-Ed
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Frank Wolak
Frank Wolak
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Virtual Seminar via Zoom
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Welcome Remarks: Mike McFaul, Senior Fellow, Freeman Spogli Institute for International Studies; Ken Olivier and Angela Nomellini Professor of International Studies, Department of Political Science; Peter and Helen Bing Senior Fellow, Hoover Institution; Director, Freeman Spogli Institute for International Studies

Moderator: Frank Wolak, Senior Fellow at the Freeman Spogli Institute for International Studies; Holbrook Working Professor of Commodity Price Studies in the Department of Economics; Director, Program on Energy and Sustainable Development

Speaker: Mark Thurber, Research Scholar and Associate Director, Program on Energy and Sustainable Development; Lecturer in Management, Stanford Graduate School of Business

As of 2018, coal supplied 27% of primary energy and 38% of electricity worldwide. Coal provides millions of jobs and helps fuel economic growth in emerging economies, especially in Asia. It is also responsible for around a million deaths per year from air pollution, and it is a major contributor to global climate change. As economies around the world have screeched to a halt because of COVID-19, coal has taken a hit—and air quality has improved accordingly. Global coal demand dropped 8% in the first quarter of 2020 relative to the same period last year, mainly due to the pandemic’s impact on China, which is far and away the world’s largest consumer of coal. Because of the curtailment of transportation around the world, oil markets are now seeing even more dramatic impacts than coal markets. Dr. Thurber draws on findings of his new book Coal (2019)—and previous edited volumes The Global Coal Market (2015) and Oil and Governance (2012)—to assess whether the reduction in the role of coal and other fossil fuels is likely to be permanent, or whether they will emerge stronger than ever when the pandemic is over.

Program on Energy and Sustainable Development
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Mark C. Thurber is Associate Director of the Program on Energy and Sustainable Development (PESD) at Stanford University, where he studies and teaches about energy and environmental markets and policy. Dr. Thurber has written and edited books and articles on topics including global fossil fuel markets, climate policy, integration of renewable energy into electricity markets, and provision of energy services to low-income populations.

Dr. Thurber co-edited and contributed to Oil and Governance: State-owned Enterprises and the World Energy Supply  (Cambridge University Press, 2012) and The Global Coal Market: Supplying the Major Fuel for Emerging Economies (Cambridge University Press, 2015). He is the author of Coal (Polity Press, 2019) about why coal has thus far remained the preeminent fuel for electricity generation around the world despite its negative impacts on local air quality and the global climate.

Dr. Thurber teaches a course on energy markets and policy at Stanford, in which he runs a game-based simulation of electricity, carbon, and renewable energy markets. With Dr. Frank Wolak, he also conducts game-based workshops for policymakers and regulators. These workshops explore timely policy topics including how to ensure resource adequacy in a world with very high shares of renewable energy generation.

Dr. Thurber has previous experience working in high-tech industry. From 2003-2005, he was an engineering manager at a plant in Guadalajara, México that manufactured hard disk drive heads. He holds a Ph.D. from Stanford University and a B.S.E. from Princeton University.

Associate Director for Research at PESD
Social Science Research Scholar
Mark Thurber Associate Director Speaker Program on Energy and Sustainable Development

Stanford University
Economics Department
579 Jane Stanford Way
Stanford, CA 94305-6072

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Senior Fellow at the Freeman Spogli Institute for International Studies
Holbrook Working Professor of Commodity Price Studies in Economics
Senior Fellow, by courtesy, at the Stanford Institute for Economic Policy Research
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MS, PhD

Frank A. Wolak is a Professor in the Department of Economics at Stanford University. His fields of specialization are Industrial Organization and Econometric Theory. His recent work studies methods for introducing competition into infrastructure industries -- telecommunications, electricity, water delivery and postal delivery services -- and on assessing the impacts of these competition policies on consumer and producer welfare. He is the Chairman of the Market Surveillance Committee of the California Independent System Operator for electricity supply industry in California. He is a visiting scholar at University of California Energy Institute and a Research Associate of the National Bureau of Economic Research (NBER).

Professor Wolak received his Ph.D. and M.S. from Harvard University and his B.A. from Rice University.

Director of the Program on Energy and Sustainable Development
Frank Wolak Director Moderator Program on Energy and Sustainable Development
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A spatial equilibrium model of the world coal market is developed that accounts for coal to natural gas switching in the electricity sector in the United States and Europe, the potential for China to exercise monoposony power in its coal purchasing behavior, and the impact of increasing the western US coal export port capacity. The global coal market equilibrium is computed as the solution to a nonlinear complementarity problem. Where possible parameters of the model are estimated econometrically. Where this is not possible the parameters are calibrated to global coal market outcomes in 2011. The model is used to assess how the shale gas boom in the United States impacts global coal market outcomes for dierent models of Chinese coal buyers' purchasing behavior and dierent scenarios for the capacity of coal export terminals on the US west coast.  Although reductions in US and European natural gas prices reduce coal consumption in the US and Europe, the percentage reduction in coal consumption in Europe is much less than that in the US. Increasing US west coast port capacity increases coal exports from the western US and reduces Chinese coal production. US coal prices increase which causes more coal to natural gas switching in the US, further reducing global greenhouse gas emissions. Modeling China as a monopsony buyer of coal reduces the absolute magnitude of these impacts.

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On September 17, PESD Associate Director Mark Thurber spoke at the University of British Columbia (UBC) in Vancouver, BC about findings from his new book Coal (available on Amazon). 

Coal burning is the largest single contributor to anthropogenic climate change, and it's also responsible for a host of regional and local impacts including serious air pollution. The challenge is that many developing countries still lean on coal as the cheapest and most accessible fuel for rapidly scaling their energy sectors. Coal also provides, directly and indirectly, sorely-needed livelihoods for millions of people around the world.

Along with UBC professors Kathryn Harrison and Philippe Le Billon, Thurber considered the challenge of transitioning away from coal in a way that avoids leaving displaced coal workers behind. He urged the audience to be "climate hawks" instead of "renewables hawks," prioritizing greenhouse gas emissions reductions over our favorite technological solutions, and to be "livelihoods hawks" instead of "green livelihoods hawks," recognizing that jobs of any kind are of paramount importance to those without them.
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On June 17, Program on Energy and Sustainable Development (PESD) Associate Director Mark Thurber talked with Nikos Tsafos from CSIS (Center for Strategic & International Studies) on the CSIS Energy 360° podcast.  During the podcast, Thurber discussed his new book, Coal, and the geopolitics and economics of continued coal use in energy versus the needs and concerns at the local, national, and global levels.

Energy 360° examines the energy landscape from the intersection of policy, markets, technologies, and geopolitics. With commentary from leading energy and CSIS experts, the podcast provides context and perspective on the most critical issues shaping energy today and is hosted by the CSIS Energy and National Security Program.

 

 

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