The Case for a Strategic U.S. Coal Reserve for Climate and Catastrophes

Cross-post from Cold Button Issues. See also John Halstead’s related post.

People worried about climate change often suggest that keeping fossil fuels, especially coal, in the ground would be a great way to prevent emissions. Coal is the most promising target as it’s the most polluting. There’s also a belief that since coal is much easier to convert it into energy than other sources, it would be helpful if a lot of coal is lying around in potential post-apocalyptic scenarios so humanity can restart the Industrial Revolution. The FTX Foundation suggests that keeping coal in the ground could be a promising way to help humanity bounce back from a global catastrophe.

This has caused some people to claim that it would be really easy and cheap to just buy up coal mines and do nothing with them.

John Halstead pointed out that this project would be extremely expensive. While there are coal mines that offer leases for just a few million dollars, whoever leases the mine has an obligation to actually produce coal and share the revenue with the owner. Similarly, governments leasing publicly-owned coal resources often impose similar requirements on whoever buys the right to produce coal from public lands. Halstead also notes that new owners may acquire legal responsibilities such as reclamation costs to repair the environmental harms of mining.

In the United States, the Bureau of Land Management imposes a rule “that commercial quantities of coal must be produced within ten years after lease issuance” and that the lease can be yanked if you fail to do so.

If you were cunning, maybe you could slow down coal mining by purchasing a lease and just move very slowly before the owner of the coal realized what you were doing and revoked the lease. I think that would be a fun movie premise but I think it’s generally a bad idea for people who want to help the world to engage in elaborate deceptions

Given the cost of actually buying up coal mines and the difficulty of actually keeping coal out of production, I think buying up coal mines themselves is out.

Could the federal government do it?

An alternative to buying up coal mines would be trying to do it with other people’s money- by lobbying the federal government to buy up coal mines or other parts of the coal industry. But if I were a politician, I would hate to do this. Buy up industries to shut them down? Even I thought this was good in a big picture sense I would feel bad about unemploying so many Americans and also be afraid of political backlash. There’s about 50,000 Americans working in coal mining.

Sometimes politicians can get away by imposing costs on the broader public when the costs are sufficiently diffused and the benefits are concentrated. Shutting down coal mines or preventing new coal mines has the opposite effect as coal resources are geographically concentrated and the benefit of reduced carbon emissions and cleaner air are spread across the entire population. I think trying to persuade the government to retire coal mines isn’t the best idea. Instead, I think lobbying for a strategic coal reserve would be a better approach.

Strategic Reserves

Governments sometimes stockpile goods or natural reserves as strategic reserves. Probably the most famous in the United States would be the Strategic National Stockpile (medical supplies) and the Strategic Petroleum Reserve. There is also a Federal Helium Reserve.

If the federal government were to create a coal reserve it would work towards two goals, reducing coal burning and the resulting pollution and creating an easily accessible source of energy in case of a global catastrophe.

How much coal does the US produce and how much would it cost to buy it all up? Using prices and quantities produced in short tons by the US government, it would have cost roughly $17 billion in 2020 to buy all coal directly from mines. (The price paid by end consumer is substantially higher due to transportation costs).

Coal Type	2020 Short Tons(000’s)	2020 Average Price	Total Value
Bituminous	237,916	50.05	12B
Subbituminous	245,781	14.43	3.5B
Lignite	49,365	22.16	1B
Anthracite	2,372	$98.68	234M

Of the four types of coal, lignite is the most environmentally harmful and cheaper than bituminous coal and anthracite. Lignite is the lowest grade of coal so more needs to be burned to produce the same amount of energy. Consequently, it’s also the most polluting form of coal. If the goal of the coal reserve were just to prevent this most polluting form of coal from being used it could probably buy up a year’s worth of lignite for just about one billion dollars.

How well does buying up coal compare to other carbon offsets? The U.S Energy Information Administration says that burning a carbon-based fuel releases carbon dioxide that weighs 3.67 times the weight of the carbon burned. Of the three common types of coal, lignite contains 25-35% carbon, subbituminous 35-45% carbon, and bituminous 45-86% carbon. Assuming a typical short ton of each type of coal falls into the midpoint of its category, burning one short ton (2,000 lb) of lignite would release 1.1 short tons of carbon dioxide, burning one short ton of subbituminous coal would release 1.47 shorts of carbon dioxide, and burning one short ton of bituminous coal would release 2.38 short tons of carbon dioxide.

If you can buy lignite and do nothing with it for $22.16 per short ton, you’ve prevented a short ton of carbon dioxide emissions at a cost of about $20. Energy Secretary, Jennifer Granholm said the U.S government is optimistic that carbon removal technology will be able to remove a ton of carbon dioxide from the atmosphere for less than $100 by 2030. (Note: a ton is 1.12 short tons)

For normal people, even normal billionaires, a billion dollars is a lot of money. But it’s not a lot of money for a federal initiative. The bipartisan infrastructure framework signed by President Biden into law in 2021 included substantial spending on climate measures. Citizens’ Climate Lobby lists $2.5 billion for alternative vehicles, $2.3 billion for low-emission buses, and $3.5 billion for energy infrastructure. The failed but seriously proposed Build Back Better Plan proposed over $500 billion for climate provisions.

One aspect of this plan I like from the political side is that a strategic coal reserve would put coal miners and environmentalists on the same sides. American politicians who are happy to prioritize environmental concerns have often struggled when talking about the economic future of coal miners and coal producing regions. When running for president, Hillary Clinton said that “we’re going to put a lot of coal miners and coal companies out of business.” Although this comment was in the context of expressing solidarity with coal miners and during a campaign where she was promising to spend tens of billion dollars on coal-producing communities, it was still viewed as a political gaffe and a sign of hostility towards coal miners. In the future, politicians who want to reduce coal consumption could be the greatest allies of coal miners via the strategic coal reserve.

If the goal of keeping coal in the ground is insurance in case of a global catastrophe, having the coal already mined and stored in strategic stockpiles seems like a much better situation for humanity to be in rather than hoping the scattered human survivors can figure out how to reboot a mining industry that is now highly mechanized.

I’m writing this as a sympathetic outsider to the environmental movement. I know there are strategic, messaging, and technocratic concerns when deciding which initiatives are worth fighting for. But I do think it would be good if the federal government started a strategic reserve for coal. And while I don’t think this is the most pressing cause in the world, I think environmentalists and effective altruists and political activists who are working on environmental issues should consider the merits of a strategic coal reserve.