In November and December 2021, China’s coal consumption rose to record levels, well over half the world’s total. That enabled China to record a 8.1% growth rate in 2021, by far the highest of any major economy. It also coincided with the COP-26 climate change conference, in which Western governments unanimously promised to sacrifice the living standards of their people on the altar of Greta Thunberg’s whims. The moral is clear: coal, rather than greenie hot air, is the way to improve people’s living standards – as it always has been.
Many of the arguments against coal usage are instinctive and aesthetic. In the late 16th century, Londoners started burning coal rather than wood in their fireplaces. Initially, this was highly inconvenient; their houses filled with acrid coal smoke because the central chimney that had been adequate to deal with wood smoke completely failed to rid the room from coal smoke. Then there was the cooking problem; wood stoves produced dreadful results when used for coal cooking, and many cooking techniques when transferred to the generally hotter coal fires produced disgusting results – charcoal on the outside and raw inside – when applied to food that had cooked well with wood. That is not to speak of the acrid smog that appeared above London and deposited itself over everything, turning beautiful stone buildings black.
So why did they switch? Simple – it was a matter of cost. As London’s population grew – from 75,000 in 1500 to 250,000 in 1600 – the supply of coppices and brushwood near London that could be used for firewood became inadequate and prices rose. That made coal, mined from surface riverside deposits near Newcastle and shipped down Britain’s east coast, a cost-effective substitute.
Initially, coal users were the poorer sectors of the population, for whom burned food and a blackened ceiling were well worth tolerating for the cost saving. Then later, as solutions to the chimney problem and new cooking techniques and stove types were found, London’s rich retro-converted their houses to coal usage and joined in the savings. Overall, the transition in London took a century – from a slow start around 1560, only by the Restoration were the majority of rich men’s palaces in London coal-burning. Outside London, the transition depended on local sources of wood and coal – much of the Midlands converted early, but homes in Norfolk and Suffolk remained primarily wood-burning until well into the 18th century.
By 1700, even though the techniques for smelting pig-iron using coke rather than charcoal had not yet been discovered (Abraham Darby, 1709) the Crowley Iron Works, the largest in Britain, was already located near the Newcastle coal deposits because secondary processing of iron could use plentiful coal rather than scarce wood for heat – and bar iron from Sweden (full of forests to smelt it) could be used as raw material. Sir Ambrose Crowley (1658-1713) was a pioneer in many respects; he was the first substantial coal user in the Industrial Revolution. Once the canals were built, beginning in the 1760s, it was no longer necessary to site your factory next to the coal deposits, and the Industrial Revolution took off.
Britain did not have more coal than some other countries – the Holy Roman Empire, for example, had the Ruhr deposits – but it made use of its coal domestically before others, and in Crowley it had the pioneer who showed the way to future industrialists.
By 1815, coal usage in Britain was ubiquitous, and the country’s key competitive advantage. Jean-Baptiste Say, in his “De l’Angleterre et des Anglais” published in that year said:
“One could, with the help of a simple mineralogical map, trace an industrial map of Britain. There is industry everywhere there is coal in the ground.”
Lord Liverpool, the prime minister, understood completely what coal did for Britain in his March 1815 speech introducing the Corn Laws:
“The success of our manufactures does not depend on cheapness of labour, but upon capital, credit and fuel. The importance of this latter article is clearly shown by the thriving establishments of manufactories in those countries where coal is plentiful; our great excellence in machinery gives us likewise a decided superiority.”
Liverpool identified the benefits of cheap energy over 200 years ago, but our current statesmen appear to have lost this insight today. Under Angela Merkel, Germany decided to close down its efficient nuclear power program, thus making its de-carbonization ambitions more or less unattainable. Currently, it has reverted to getting electricity from coal, but its overall power costs are vastly inflated by the plethora of wind and solar energy boondoggles it has installed. While Germany still has a manufacturing cost advantage over most of the EU (which is shackled by similar nonsensical regulation) it is very uncompetitive with China and other emerging markets who still use cheap, reliable coal as an energy source.
Britain, also has given up on its abundant coal reserves, will not engage in “fracking” natural gas and now appears to be relying on windmills to power the electric cars it wants everyone to drive by 2035. The windmills are subsidized by the government, but the permits to build them can be sold, which this week has allowed Nicola Sturgeon, the Haggis from Hades, to secure apparently without proper strings attached another £700 million that can be used to subsidize he ill-starred independence campaign.
In the United States, unless in the next Presidential election we get the eminently sensible Senator Joe Manchin (D.-W.Va.) the environmental bureaucracy is determined to wage war on coal and eliminate its use in power stations, where it is considerably more efficient and more economical than other fuel sources. The new Fed vice-chair Sarah Bloom Raskin, is determined to make bank regulation as well as other tools push the goals of environmental wokeism and expensive energy. According to the U.S. Energy Information Administration the country has 470 years’ supply of coal at current usage rates, so there is no danger of running out of it in the near future, as the famous economist W.S. Jevons fretted in his magisterial 1864 “The Coal Question.” Instead, almost any energy source that is intermittent, unreliable and expensive is to be preferred to coal, except of course nuclear power, where a different set of environmentalists, entrenched in the government, prevents any new power stations from ever being built.
So we come back to China, already users of more than half the world’s coal, who derive an immense economic advantage thereby, as Liverpool would have told you in 1815 – in this as in some other respects Xi Jinping appears to have lost less of Liverpool’s eternal wisdom than his Western competitors. China pays no attention whatever to the “climate change” caper, correctly regarding it as a chimaera got up by corrupt Western “scientists” with political manias that to them are incomprehensible if useful.
Instead, China promises to de-carbonize by some suitably distant date, such as 2065, and in the interim builds new coal-fired power stations. Yes, it makes Beijing somewhat smoggy, but the gigantic cost benefit China derives from cheap power is sufficient to equip a large portion of the People’s Liberation Army, which is of course the point of the exercise. As for climate, if they omit to install “scrubbers” on their power stations, they can enjoy the climate cooling effect of coal’s sulfates, as we all did before 1970.
Around 1700, the Netherlands locked their technological development into wind- and water-power, using windmills for most industrial processes. By doing so, despite being at that time the most economically, politically and socially advanced nation in Europe, they missed out on the Industrial Revolution until about 1850, and then had to play catch-up to their despised Belgian neighbors, who had made no such commitment. The West, with its own commitment to windmills, looks like making a similar mistake with respect to China. Let us hope that its future economic development is merely delayed, as in the Netherlands, and not sidetracked altogether.
Coal. Its abundance, its efficiency and its flexibility made it the energy source of the future in 1700, as Sir Ambrose Crowley recognized. It still is!
(The Bear’s Lair is a weekly column that is intended to appear each Monday, an appropriately gloomy day of the week. Its rationale is that the proportion of “sell” recommendations put out by Wall Street houses remains far below that of “buy” recommendations. Accordingly, investors have an excess of positive information and very little negative information. The column thus takes the ursine view of life and the market, in the hope that it may be usefully different from what investors see elsewhere.)