UK energy crisis: coal scuttled

Dead, buried and, until a few months ago, certain to remain that way: Britain’s coal industry. But some FT readers have recently taken to posting the response “reopen the coal mines” under articles about the current UK energy crisis. How realistic is that suggestion?

Coal did more than keep the lights on for Britain over the past few centuries. Mining was a massive employer in many parts of the country. Manufactured “town gas” was a staple domestic fuel until natural gas took over in the 1960s.

The country’s three remaining coal-fuelled power stations mostly buy their stocks from abroad. Until recently Russia was the biggest supplier. British mines produced only 1mn tonnes last year. That was less than 1 per cent of peak production before the first world war.

The energy crisis has pushed up coal prices sixfold since the start of the 2020s. But centuries of extraction mean most remaining thermal coal lies deep, making it economically unviable for power generation even at current prices, according to Steve Hulton, of consultancy Rystad Energy.

Britain’s “proved” reserves of coking coal — which could be economically extracted — were estimated at just 26mn tonnes last year by BP. That compares with almost 250bn in the US.

Total British coal in existence might be as much as 190bn tonnes, according to estimates made by British Coal in the 1990s. About 45bn tonnes of that may be extractable, money no object. The latter would cover Britain’s total energy consumption for 2021 about 75 times over, Lex calculates.

High coal prices must have simplistically increased the small slice of that 45bn tonnes which is now economically viable. But a multiyear extraction plan would have to recognise that the industry does not expect high prices to persist. Companies are not changing their investment plans to target regions where coal was previously uneconomic.

The real sticking point in the UK is the damage coal mining wreaks. Coal produces noise and dust when it is dug up and hefty emissions when it is burnt. Since 2014, West Cumbria Mining has been trying to open the first new deep coal mine in 30 years. Ministers once again postponed a decision on that earlier this month.

For environmentalists, coal mining really is the pits.