Britain's battered coal industry sees glimmer of hope in carbon capture

[Knottingley, England] A short drive across Britain's gritty former industrial heartland of south Yorkshire separates the past and the possible future of its once mighty coal industry.

Kellingley colliery's winding towers loom over modest streets of row houses, lined with "For Sale" signs. The mine is likely to shut soon because it is losing money - one of the last three working underground pits in the country.

Down the road a new coal-fed power station is planned, using cutting edge technology to pipe its harmful carbon emissions underground out to under the seabed. "We've got coal plants around us but they're closing Kellingley because they can get it cheaper from God knows where," said ex-coal miner Harry Malkin, 63, who worked in Yorkshire pits for 20 years until the first closures under Margaret Thatcher in the 1980s.

Supporters of the industry are counting on the British government's drive to support Carbon Capture and Storage (CCS) technology, which traps and buries underground polluting carbon.

One of these planned CCS projects is the 2-billion pound (3.22 billion US dollar) White Rose plant proposed by Drax, Alstom and BOC, named after the emblem of deeply proud Yorkshire.

The White Rose power plant could "in principle" burn domestic British coal, but the developers have not yet decided on the project's fuel procurement, a spokesman for Drax said. "The future for British coal is if we get on with carbon capture and storage with coal," said Tony Lodge, research fellow at the London-based Centre for Policy Studies, founded in 1974 by Margaret Thatcher. "That means there is a future for the British industry; it won't be particularly massive but it will be the retention of perhaps 10 million tonnes a year of output." At its peak in 1913, Britain's coal industry produced 292 million tonnes per year. Last year it was just 13 million tonnes.

Britain's climate change commitments mean its polluting coal-fired power plants will shut down by the early 2020s but a government drive for cleaner fossil fuel plants by applying CCS technology offers a glimmer of hope for coal producers.

If CCS does take off, Britain's deep mines will need to find a way to cut production costs. They are in fierce competition with cheaper suppliers from Colombia, Russia and the United States, where shale gas has displaced coal.

Britain's coal industry is urging the government to require domestically-produced coal to be used in future CCS plants.

Today, coal-fired power stations still produce nearly a third of Britain's electricity. But it now imports 49.4 million tonnes of coal annually, or 82 per cent of its annual coal needs, compared with 51 per cent only 10 years ago. A growing share of imports comes from Russia.

Mine owner UK Coal, in administration since last year, is negotiating a managed closure with the government and private lenders that will affect 1,300 workers.

But Britain's coal industry is hoping more private investors could step in to help running some of the remaining mines, and a cleaner future for coal could also keep the industry alive.

The government will spend up to one billion pounds to carry out engineering studies for White Rose and a second CCS project at a gas-fired power station at Peterhead in Scotland, two of a handful of projects that still look viable.

However, even a small glimmer of hope for Britain's coal in the future energy mix will unlikely prevent the loss of jobs at underground mines.

At its peak, Britain's coal industry employed 1.2 million workers in nearly 3,000 pits. Once UK Coal closes its underground mines, only one deep mine will be left at Hatfield in south Yorkshire, and a number of open-cast mines.

Ex-miner Malkin now makes his living from the past, selling his images of the glory days. "The Kellingley closure is the last nail in the coffin," he said. REUTERS