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CEIC-03-04

"Should We Transport Coal, Gas or Electricity: Cost, Efficiency & Environmental"

Joule Bergerson

Abstract:
We examine the life cycle costs, environmental discharges, and deaths of moving coal via rail, coal-gas via pipeline, and electricity via wire from the Powder River Basin (PRB) in Wyoming to Texas. Which method has least social cost depends on how much additional investments in rail line, transmission, or pipeline infrastructure are required, as well as the amount of a carbon tax, whether underground sequestration of carbon-dioxide is allowed and works, and the level of transmission losses. All methods generate significant environmental discharges. Transporting 50 million tons of PRB coal by rail to Texas is cheapest since the infrastructure is in place; it requires 130 million gallons of diesel fuel and results in the death of 15 people. Shipping the energy via transmission lines requires additional generation and more mining. Gasifying the coal is somewhat more expensive, but has important environmental advantages compared to a pulverized coal boiler.

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