Coal beyond the limits: is there a market?

“If only they’d keep digging and digging!” ex-Communist leader Milouš Jakeš once said of the mining sector; his point is still valid.

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“If only they’d keep digging and digging!” Milouš Jakeš, the general secretary of the Czechoslovak Communist Party from 1987 to 1989, once said about mining in the former socialist state. Though I’m hesitant to attribute visionary qualities to Jakeš, there is a certain truth in this ineloquent statement which is still valid today.

Disrespect of tradition

One of the resounding slogans during the fall of communism was “We’re not like them!” This wasn’t so much about hanging communists from lampposts like in Hungary in 1956, or setting up work camps and gulags for the opponents of the new regime, or even condemning the show trials and clearing the names of their victims. Nor did it imply a desire to bar access to education for the children of the communist elite, or forcing their parents to do unqualified, degrading work.

The slogan was principally an expression of rejection of the model of communist behavior and attitudes: “class consciousness” as it was called. This embodied the Bolsheviks’ utter disrespect toward traditions, peoples’ roots and basic human rights. One manifestation of this tumidity was the unprecedented demolition of towns and villages beginning with the historic town of Most and ending with Libkovice, both in northern Bohemia. Tens of thousands of people were forced to move into prefabricated blocks — so-called panel houses — and their homes in which their families had lived for generations were razed to the ground, victims of the coal Moloch.

Forgotten assessment

It was with this in mind that at the end of 1991 the Czech government passed a motion setting limits on coal mining in the Most, A heated discussion about lifting the mining limits has arisen in political and energy circles. Ústí nad Labem and Sokolov districts. On the basis of this limit the extraction of coal from one field belonging to the Sokolovská uhelná company was not started: There were legitimate concerns that mining there would destroy the complex subterranean mineral sources of the “spa triangle” in north and northwest Bohemia.

At the same time, the mine in Chabařovice, which provided high quality lignite with low sulfur levels, was closed thanks to public pressure. Before the regime change, plans were drawn up to demolish the town in order to expand the local coal field.

The government decision saving the villages of Černice a Nový Jiřetín is still in force. Nevertheless, a heated discussion about lifting the mining limits has arisen in political and energy circles. The fact is that the effectiveness of the limit on mining in those districts was to be evaluated by the Ministry of Industry and Trade in 1995. And it appears that this task has been completely forgotten.

As a result, the mining companies and moreover the residents of the protected districts, have been left in a state of uncertainty. The government should, therefore, see to it that an evaluation of the results of the mining limits dating back to 1991 is finally conducted. But it’s plain to see that no one is willing to.

Results of limits

For as long as the boring machines didn’t encroach upon the above-named towns and villages, a certain calm prevailed and the government didn’t need to comment on the validity of the mining limits. That was until the turn of the Millennium. Now the situation is different; the miners are applying pressure to expand operations and local residents are rallying against their plans.  It’s worth observing the approach of different governments to the issue. All the options, “yes”, “no”, “maybe” have been heard.

The current government has said it doesn’t intend to lift the mining limits, nevertheless, proposals which could be described as surreptitious have been tabled by the mining lobby. But this attempt has not taken root and thus the uncertainty continues. This state of affairs cannot last for long, but the government has limited scope for maneuver since the state “forgot” to assess the impacts of the first mining limits. But if it doesn’t act to make up for the omission, it will end up on thin ice.

The first option is the “lame duck” model, whereby the current government will stick to its declared position and the issue will be left for the next government to resolve. The second option is to make a definitive decision in favor of one side or the other. In the second case the danger is that the losing side could appeal to the courts on the basis of the failure by the state to assess the mining moratorium. Given the tempo of the Czech judiciary, it is probable that such a legal battle would be ongoing when the next government takes office.

For and against

For the residents of Horní Jiřetín and Černice, the issue is existential: Losing the battle would mean losing their homes and the end of centuries-old community life. The main argument of the mining lobby is that if the limits are not lifted, a significant portion of Czech households will soon receive astronomic heating bills.

On the other side, the main argument used by the mining lobby is not the potential to make billions of crowns or pledges to pay above the market rate for property that would have to be demolished to expand mining operations. Their main argument is that there is a distinct prospect of coal shortages for municipal heating plants and that if the limits are not lifted, a significant portion of Czech households will soon receive astronomic heating bills. Given the current price of heating, this threatening argument is effective. But is this really the case?

To answer this question we must return to the 1970s when the prefab estates started to sprout up around our towns and cities. Heating plants were built to provide central heating for the new estates with pseudo-ecological reasoning that they would lead to a reduction of smog in urban areas. Although the heating plants were officially labeled as ecological, they produce large quantities of emissions, albeit less apparent due to peripheral locations and tall chimneys.

What’s most important for assessing the current state of affairs is the era in which the heating plants were built. The fact is that most heating plants are at the end of their lifespan or nearing it and with the strict emissions limits in place today, renovating heating plants appears to be completely unviable.

Thus the question is how much coal is actually required given that it’s possible that heating plants will be shut down one after the other, or that for ecological reasons they will have to be refurbished to use other fuel.

Many questions; few answers  

It’s sometimes forgotten that the state is the owner of coal reserves and issues mining licenses and rights to sell coal. Nevertheless, a significant amount of coal from the north Czech mines is sold to Germany, and should these exports instead be reserved for prolonging the viability of Czech heating plants? Can the state decide that coal mined in the country must be offered first on the domestic market? There are many questions but few answers. Still, those answers we do have are fundamental for the fate of the mining limits.

If the current limits are left in place, the mining companies will not be able to extract the easily-accessible coal reserves around Záluží u Mostu and Litvínov. But will the Czech Republic need so much coal in the future?

Like the heating plants, the majority of coal-fired power plants are also faced with obsolescence due to age and also because of ecological norms. The government’s proposals for the future development of energy do not contain plans for a renaissance of coal power plants. In addition to the cost of renovating the ageing coal power plants, increasingly strict legislation on emissions of sulfur, carbon monoxide and other greenhouse gases, as well as increasing demands for efficiency, mean that they like the heating plants will also become financially unviable.

In short, the renovation of coal-fired power plants does not appear to be an attractive financial proposal. So, if the mining limits are lifted, who will buy the coal? The answer may be Germany where the government has undertaken to phase out nuclear power production within seven years.

And this takes us back to the beginning: what was it that comrade Jakeš said about coal back in the late 1980s?