This transcript from the Step Change podcast continues the story of coal, focusing on its role in America’s rise from the late 1800s onward. Hosts Ben Eigelsen and Aminay Shah explain that coal became the backbone of industrialization, powering railroads, steel production, and the birth of electricity. Two key figures dominate this era: JP Morgan, who consolidated railroads and coal mines to control the economy’s arteries, and Andrew Carnegie, who revolutionized steel production with the Bessemer process. Carnegie’s control of coal mines and railroads allowed him to dominate the steel industry, producing more than the entire UK by 1890. Morgan eventually bought Carnegie out for $480 million, creating a steel monopoly. The episode also introduces electricity as a transformative force, moving coal from heating homes to powering cities and industries. The hosts emphasize that coal’s influence extends into the 20th century, shaping global warfare, the rise of China and India, and modern infrastructure. This part covers the vast majority of coal’s history, highlighting its enduring impact on global power and technology.
All right, and I, well, Cole, part two. Did you think this was going to be easier than part one? Harder, what do you think? You know, I came into this thinking that as you get closer to the present day, it becomes harder and harder to wrap your head around everything that impacts something as important as Cole. And it turns out my fears were true. You were a completeist, but I had the false optimism. I was like, oh, we have the outline kind of done from last time. We have some of the story in. This is going to be on you a little few pieces. There you were right. The Cole story was just getting started. All right, well, welcome to the second episode of the Step Change podcast. This is a podcast covering the stories of human progress. We're here to understand the technologies, systems, and infrastructure that shapes our world. And I'm Ben Eigelsen. I'm a co-founder of Step Change Ventures, a fund that invests in the companies that are accelerating today's biggest step changes. And I'm based up in Seattle, Washington. And Aminay Shah, fellow co-founder of Step Change Ventures, and based in Los Angeles, California. In part one, if you haven't already listened, we started in the Carboniferous period when dense forests and swamps would evolve to become today's Cole. We move forward through to Britain, where Cole was being used as a wood replacement. The real inflection point came later in the 1700s, when Cole demanded and then powered the rise of the steam engine that would take over the world and help us take this black rock from under the ground and turn it into mechanical power to move trains, pump water, and power factories that enabled the explosive industrial growth of cities like Manchester and Birmingham, and eventually spread to the United States, which ended up having huge coal deposits, where a drove industrialization threw the mid 1800s, which helped propel the north to victory in the Civil War, and led to the railroads of the game monopoly. Now, where we ended part one in the late 1800s, Cole was powering factories, locomotives, and homes, as well as the struggles between labor and power. This set the stage for more growth, conflict, and the consequences of the 20th century. And so if you haven't listened to that, we welcome you to go back and listen to part one. If you feel like that was a sufficient summary, here we are, let's jump into part two. That was a good trip down memory lane, and here we are for act two, and Cole becomes something even bigger. The beating heart of America's rise, the spark behind the birth of electricity, the bloodline of global warfare, and eventually the fuel that powered the rise of China and India into modern industrial giants. This is a story of invention and empire, of labor uprisings and naval arms races, and of how Cole didn't just light our homes, it shaped the very architecture of global power. And even as its ability and seeming relevance faded in the West, its influence has never really gone away, and it is true right up until today. You know, to put a finer point on that evolution, in part one, we covered certainly less than 10% of the total Cole that you may already use, and by some numbers less than 3%. So today, let's do the other 97% of the Cole story. Whew, the other 97%. And before we jump in, a few call outs for listeners. This is a very new show, so it makes a huge difference for you to subscribe and rate, so the various algorithms pick up what we're putting down. And also we love hearing from folks, so send us a note any time to "high at stepchange.show" and we'll go to "Boltamus," whether that's with feedback on the episode or ideas for what you want us to cover next. And also at stepchange.show, you'll find a much fuller set of episode notes, including all of the sources we use for our research. With that, let's jump in. The late 1800s into the early 1900s was this period of incredible change, and we've got two big related stories to set up this period of King Cole. The first is a scale-up story of building the American infrastructure, the expansion of railroad and steel, and a few actors that made this all happen. The second story is a story of invention and social change. Welcome to the stage, electricity. The movement of Cole from home to invisible force that foreshadows Cole for the next 100 years. And very importantly, it's also the chance I get to really use some physics nerdy now, so I'm excited for that. Applied physics, 20 years later. It's time. Coming back. And so to begin, I'm going to quote Barbara Freese, "Cole didn't just fuel the engines of industry. It fueled an era of unprecedented expansion. It powered the trains that unified a continent, the factories that built its cities, and the lights that illuminated its nights. It was not merely a resource. It was the beating heart of America's industrial might. But as we'll see, what Cole was doing was moving through the key channels of the economy. So perhaps it was the blood running through the arteries of America. Pick your favorite image. I think the blood one. The blood one's good. Yeah. So while the story of the first industrial revolution was one driven by steam power, textiles, and iron, the story of America's second industrial revolution is roughly 1870 to 1920, and this period of unprecedented technological, industrial, and economic expansion. It was in this period that Cole's dominance becomes inextricably embedded into the foundations of the American engine. And to tell the story of what drove this change, we're going to focus on two Titans born within a couple years of each other who went on to change the face of America by creating the largest business empires in history and making Cole indispensable in the process. The first is a household name of a one, Mr. JP Morgan. Everybody take out your chase sapphire reserves. JP Morgan, born in 1837 as the heir of two of New England's most distinguished families. He was educated in Boston, Switzerland, and Germany. He was groomed by his father for a career in international finance. And at the young age of 20, Morgan went to London to work in his father's bank before moving back to his permanent home in New York City. And the context of this time, the late 19th century economy, was wildly unstable. There were frequent bankruptcies that was cut-throat competition in railroad steel and utilities. And Morgan, the banker, saw this instability as inefficiency and dangerous for business. So his solution was consolidation. He wanted to merge competing companies, eliminate wasteful competition, and install professional management. And he understood that railroads, steel, and electricity were the critical enablers of industrial growth. He thought that if he could control these industries, he could control the arteries of the economy. It's like the ultimate toll road investor and builder and finance, right? Finding these points in the economy where the blood is flowing through, where humanity is growing and just owning either a piece or the whole thing. And we'll see again and again. And there's no other road to take. You had to take that toll road. Yeah. So Morgan's financial empire was built on this strategic vision of infrastructure. His insight was that control over transportation was the key to controlling entire industries. And so coal entered his planning because coal was essential fuel that powered everything from the locomotives to the steel mills. So by controlling the railroads, he was the main middleman for all the rest of the coal's needs, while also controlling a major end use of coal in the railroads themselves. So the mid-1800s, the railroad industries in chaos, there's hundreds of small competing railroads, many of them poorly run and deeply in debt. There was different track gauges varying rail widths that made the regional systems incompatible. Morgan believed that if you could rationalize the system and stabilize the entire transportation network, you could dominate the trade routes for the key industries, coal, steel and manufacturing. So he wanted to turn the railroads and did turn the railroads into reliable, predictable revenue machines to feed the rest of the economy. And so his early funding came from his European investors through his exposure through his father in London. And he used the Morgan name to kind of access capital. European LPs. He had he had European LPs. Exactly. He made his first fortune for those European LPs. This is amazing. He made his first fortune through government war contracts during the Civil War, where he actually bought rifles for $3.50 and then sold them to the government for $22. Despite the fact that he knew they were defective, years later he partnered with one of the richest banking families in America and catapulted his own access to capital that went beyond his father. But this is where he began. And so his first deal was 1879, saving the Albany and Cisco Hannah rail road. There's a small but strategic railroad that was actually caught in a battle between a J. Gold and a one Mr. Vanderbilt. It's a Morgan stepped in as the mediator. He secured a deal and he saved the railroad. And this started his relationship with the Vanderbilt family, which controlled the New York Central Railroad. I feel like this is Morgan's pattern too. We'll see. He finds this moment of crisis or conflict often between war and sides comes in as mediator and somehow ends up owner. Amazing. This gift of stepping in and then taking over. And so his money helped finance the expansions, ensuring the railroads had the capital to survive financial crises that were to come to the late 1800s. Once securing the Albany and Cisco and railroad for Vanderbilt and leveraging the control that Vanderbilt had over the New York Central Railroad, he helped finance future expansions and then ensure that these railroads had the capital to survive financial crisis which none of the competition had. And this is the same thing we saw in part one. If we go back to the last one.
back to the story of the Redding Railroad, was Franklin Gowin had consolidated in a questionable legal maneuver, consolidated the railroad and the coal mines. They had gotten to the point of owning massive anthracite coal fields in Pennsylvania. If you remember, anthracite was the premium coal of the 19th century powering most of the eastern seaboard's energy. And in the 1890s, the Redding was financially unstable. Franklin Gowin had overswung, and it was on the verge of bankruptcy. Again, Morgan saw opportunity. So he swooped in, saved the railroad. In that case, then, he would no longer just own the railroad, he would own these deep coal reserves and this deep control over coal prices. The real thing that Franklin Gowin had done that Morgan appreciated was the idea that if you control the transportation network, you actually control pricing because if someone wants to go around you, they can't because you're the actual means of moving their product. Morgan was then able to eliminate competition by continuing to merge more and more of the smaller coal hauling railroads into the dominant players and restructured the Redding Railroad, placed allies on the boards and eventually turned that into the major coal empire, combo rail plus coal empire. And so at this point, railroads were in the prime position. You could say that at this point, JP Morgan was sitting on top of the entire vertical stack of coal, this transportation network and the delivery and pricing mechanisms around that. I don't know if that was sufficient. That's only one product. No, we're just getting to the 1900s and Morgan's sitting on top of this empire. He's got access to coal. He's using that coal to power his railroads. He's eliminating competition. He controlled these massive transportation networks that ran on coal and transported coal and served as the backbone of the industry and economy that was being built around this time. Just to give a sense of it, all of the fixing and buying of the railroads helped expand America's rail network from about 53,000 miles in 1870 to 250,000 miles by 1915. It's just in a short 45 years. We five acts, the railroad network with Morgan sitting on top of most of that expansion. And so in addition to railroads and homes that are being heated by coal, what else uses a ton of coal? We're talked about this. I think it's the process of of what we're building everything from it's iron and eventually steel. That's right. Steel, steel production required coke, which is a form of processed coal to smell the iron ore and the railroads were the largest consumers of steel. So enter the king of steel, another household name, Mr. Andrew Carnegie. So Andrew Carnegie is famous for the Carnegie steel company, which was the largest steel producer in the world. He got there through his own journey, born in Scotland in 1835, born into poverty. He emigrated to Pittsburgh in 1848 and he started as perhaps luck would have it as a telegraph operator working in the railroad industry. So in his early 20s, Carnegie saw that most rails were built on iron. It was expensive and it was brittle. They wore out quickly under the heavy loads and it limited their ability to expand. And so he started investing in iron mills because he saw an opportunity by 1870 Carnegie left the railroad business and was all in on investing in iron. And he was searching for a way to make steel, which was this kind of bespoke luxury product. Make it more affordable because he knew that the railroads desperately needed it. And in 1856, across the pond, Mr. Henry Bessimer had developed a process to mass-produce steel cheaply. Let's zoom out for a second. What is the difference between iron and steel? How do you go from iron to steel? Iron usually has more carbon and more impurities that need to be removed and the carbon needs to be kind of finely controlled to create this more flexible structure that is steel. So steel is fundamentally iron with impurities removed and just the right amount of carbon to give it that strength and tactile bendability that steel has, whereas iron is more brittle. And so the traditional way at the time was to melt down the pig iron in a process that would often take on the order of a day to get a small batch. And so the best summer process was really the big unlock of the first scaled way to do this. And so the key to the best summer process is what's called the Bessimer converter. It's this large pear-shaped vessel that's lined with lime and allows you to melt down a large amount of the pig iron. And then the key is to blast air through this molten iron. And what's happening when you blast air has oxygen in it. And the oxygen is then taking out the impurities because a lot of the impurities would be things like silicon, sulfur, phosphorus, all of these conform oxides. And so you blast the oxygen through the melted iron and form these oxides to actually take the impurities out. And then they'd be able to add in or adjust the carbon content to create steel. And just to give a sense of the impact of this process, it now took 10 to 20 minutes to do the thing that would take a full day to produce three to five tons of iron. And so this led to an order of magnitude drop. Literally, you know, one day something is $50 for an amount of steel and sound $5. Huge jump. Another non-paradox of the Javins paradox. Yes, guess what? Turns out more people wanted to use steel after it got much cheaper. The problem was no one believed Bessimer. He presented his findings to the British iron steel maker's side. And they was dismissed as a fraud. People don't believe those 10x improvements 10x improvement. And nobody believed him. So Carnegie heard rumors. And I'm so how do you how does one hear rumors in the 1900s? I don't know. But Carnegie heard rumors about Bessimer's new process. And he decided to go see it for himself. So he went over there and he watched as molten iron was transformed into steel in minutes, 10 to 20 minutes, faster and cheaper than anything he'd ever seen. And other American businessmen had also visited, but no one acted. Carnegie, visionary, saw a revolution waiting to happen. And so before Carnegie, steel was too expensive. It was a luxury metal. It was mainly used for tools and swords. Carnegie returned to the US. He founded the Edgar Thompson Steelworks in Pittsburgh. And he designed it specifically around the Bessimer process. His overarching strategy was to control every step of steel production, from the raw materials to the finished product. So steel production in the late 19th century relied heavily on coal, especially for coke, which was used to blast the furnaces. Owning the coal mines ensured Carnegie steel mails had a steady supply of the high quality fuel it needed without having to pay the middlemen or be subject to large price fluctuations. And Carnegie had previous experience in the railroads, which required the steel rails and consumed large amounts of coal. So owning coal mines allowed him to both control the supply for his steel mills and his railroads. So he bought up coal mines to supply coke. He secured contracts with railroads to guarantee demand for his steel rails. In 1873, when the US economy crashed, many investors backed out of industrial projects. Carnegie doubled down, pouring his entire fortune into this new plant. His competitors called him insane for investing in steel during a recession. But in a mere two years, his plant was working. And within a decade, iron rails were completely replaced by steel. And so Carnegie realized the railroads were charging too much to transport materials. And so he built a private railroad network to move the iron and coal directly to his steel mills. This cut transportation costs in half, giving Carnegie a huge price advantage. That's fascinating. So back to JP Morgan or others, had this monopoly on the railroads. And instead of playing their game, he was like, you know what, I'm just going to go around. I'm not going to use your LL model. I'm going to build my own. And he could do that because in 1880, Carnegie steel was the dominant producer of steel in America. His steel was used for railroads, for skyscrapers, for bridges, for ships. It was fueling the second industrial revolution. In 1890, he was the largest steel producer in the world. He produced over a half of America's steel. One of his steel mills alone produced more than the entire United Kingdom could produce. If you remember back to I think a hundred years prior was when Britain was the workshop of the world. And now fast forward to this point in time. And an American industrialist has built one mill that has become the steel producing mill of the world. Like what a wild fact. All in this short amount of time from discovering the best process to a couple decades later, producing at a mass scale. So at this point Morgan and Carnegie were rivals and Carnegie was well known for his stubborn independence. Morgan financed Carnegie's competitors, but Carnegie's had lowering prices and killing competition. And by 1900, Carnegie was still on top and Morgan realized there was no way to beat him. He dominated steel and so the only way was to buy him out. So as legend has it, Carnegie was on vacation off the coast of Georgia at the Jekyll Island Club which was an exclusive retreat for the ultra-rich, the Jackson Hole of the time. And so Morgan sent his right-hand man, Charles Schwab, not the same Charles Schwab, to meet Carnegie and just float an idea to him. So Schwab met Carnegie over dinner and his pitch was simple. The steel industry was getting too competitive. A single giant company could set prices, stabilized profits, and dominate the entire industry. If Carnegie was willing to sell, Morgan would pay him anything he wanted. So Carnegie took out the napkin and the pen, scribbled a number on and slid it across the table. The price he wrote, $480 million, which in today's dollars is about $14 billion. Morgan's response, congratulations Mr. Carnegie, you're now the richest man in the world.
world. So as legend would have it, the entire deal was finalized on an napkin in a single night. There was a wild deal. And there wasn't, I think, much in the way of M&A regulation at the time. So this could just happen. Suburn rich industrialists who just wanted to control more because they thought they had a better region of the future. Yeah. And so 1901, he forms the United States steel corporation, US steel, the first company in history to be worth more than a billion dollars, which was incidentally bigger than the entire US federal budget at the time. And so in this process, Morgan didn't just bike steel. He bought the coal, iron, and railroads that went along with carnivies vertically integrated model. And so US steel goes on to become the largest producer in the world. It relies on the coal from Morgan's minds. It relies on Morgan's railroads. It set the precedent for a corporate monopoly, which eventually led to antitrust regulation that that had to be introduced for some context on this. Because I think we're not used to steel being exciting. Maybe the analogies in video today, it's like, this is the key input into the world at this moment. For much of the 20th century, US steel was both the world's largest steel producer and the world's largest corporation. Because steel was the growing, important input into the world at this time. It's hard to match, but we'll borrow some imagery from the new release of abundance. If you went to sleep in 1875, the tallest building in Manhattan was a church. You wake up 30 years later in 1905 and you've got the skyline studded with towering steel skeletons called skyscrapers. Right. And so this is the turning point of why coal became the engine of the industrial America. Without cheap steel, there was no railroad expansion. There were no skyscrapers. There were no manufacturing at industrial scale. All of this was powered by coal and Morgan, Karnie, were two among a few who really controlled the entire industry and drove it forward. And JP Morgan, I mean, at this point, he was so in control of these arteries and the blood and all of the pieces that he essentially became the US bank. Right. So two different crises happened. There was the 1895 gold crisis when the US, which at the time had a gold standard, was struggling to have enough gold to keep the standard. And so he swooped in, brought in capital, and loaned gold to the United States in order to keep the gold standard. And then again, in 1907, there was a stock deal that went south and basically a run on a number of trusts and banks. So it was on the precipice of an economic collapse. Morgan again stepped in and injected massive loans to stop these bank runs to say, Hey, these banks are going to be solvent. They're going to be okay. The New York Stock Exchange was about to collapse at this moment and he injected $25 million. And so he was essentially the lender of last resort across the entire industrial economy. And ultimately, after looking at this 1907 collapse, there was enough political willpower to say, we can't let this happen. At least we shouldn't depend on the guy who's too big to fail. Yeah, the guy who's too big to fail. So let's set up the federal reserve and which kicked off in 1913. So just a wild thing to think about the scale of capital collected in one person's banking entities. Amazing. All right. Well, we covered steel, we covered trains, we covered coal, we covered industrial capital. But that's not the biggest change. I would argue that happened in that going to sleep in 1875 and waking up in 1905. There's more. There's more. You went to sleep in 1895 and like the way that you experienced light and heat and transportation was largely the way it was for decades prior. The other big thing that came is this was the first era of electricity and all of the invention that surrounded it. Now, this is not going to be our episode on the grid. I suspect and hope and cannot wait for the two to three part series on the development of the grid. But we do have to dip our toes into it because the expansion of electricity and coal is an intertwined marriage, especially in this era. And as you'll see over the next 100 years of history, electricity became the dominant user of coal. So let's go to the beginnings of when that started. Prior to this time, there's a lot of experimentation with trying to control and understand and use electricity. But think of it as research at this time. Right. So around 1800, there's an Italian scientist named Alessandro Volta, who figured out how to make an early battery. These were called Voltaic piles. And yes, that's where Volta as a unit has come from, Mr. Volta. I kind of want you to call them Volta's. It'd be funny. And for a good 70 to 80 years following this, almost all electrical experiments were powered by these primitive batteries. These were useful as scientific tools to run experiments. They could do things like electrolysis and do a bunch of great lab experiments. But they had very limited current and power and would lose most of their energy internally. So you couldn't actually do anything really commercial with with this early technology. It's amazing to think about this in today's moment where battery storage is scaling exponentially at utility scale as a society or on the brink of unlocking how much energy you actually can store internally. That's right. I mean, maybe they get analogy for this time and batteries as we're talking through it is, you know, maybe like quantum computing or something. It's like we've been doing experiments for 20 years. We have some stuff. You can technically use it. But the normal person is not using electricity at all. And the normal person is not hitting some quantum computing server call today. That's right. Well, the big game changer was finding a way to turn a big energy source into electricity. There was no bigger energy source than coal. And so how is it that we're going to turn this rock of energy into electricity? Well, we figured out how to turn this rock into steam, right? You just heated out the boiling water got steam. And we figured out how to turn the steam into motion. That was what that was newcomer before that. And we forgot how to turn that motion into rotary motion. So we know how to move something. But how do you turn moving something into electricity into current that you can use? Now, now I get to put on the physics nerd hat. So we're going to go to 1830s, Michael Faraday demonstrated a new principle of electromagnetism, which showed that a current and a wire could generate a magnetic field. And the opposite is also true. If there's a changing magnetic field in a wire, you can generate a current. And the way to think about this is think about it almost like inertia, like the wire, like a loop of wire isn't comfortable with the magnetic field moving around it and changing. So it actually creates a current to go the opposite direction of the changing magnetic field to kind of push back against it. That's the best way to give a physical intuition of this. You get to the bottom out of like, well, why? Well, why? Well, why? It's kind of like saying, like, well, why gravity? This is getting to one of the foundational fundamental laws of physics, the government universe that is, well, why? Well, we don't know. It's what happens. And asking about further, why it just gets like, it's a law of physics. And so once you do this, you have figured out that if you can change a magnetic field around a wire, you can generate electricity and you can change a magnetic field literally by like moving a magnet through it. Or you can hold a magnet steady and you can spin a coil of wire inside the magnet. And now it effectively for the wires experience, I say, hey, the magnetic field's changing inside of my loop. So I'm a generate a current to resist this. This is the foundational thing that enables any electricity to become motion and any motion to become electricity. This is how an EV motor works. This is how the microphone we're speaking into works. This is how early telephone works. It is all the same principle, which is, so you're talking at the end of a telephone, you're moving this diaphragm that's changing the magnetic field inside of a wire that's transmitting across distances. And on the earpiece side, it's doing the opposite. And this is the same thing. A generator on one end is a motor on the other end. So everything has to do with a change of magnetic field and the response of the current and the wires. That's right. So that's the physics that was discovered in the 1830s through 1860s. But now we have to figure out how to use it to go from physics to engineering. And how can you use that at some scale? And so when this physics was discovered by Faraday, he made it public and he was asked, well, what is the use of it? And he said, what is the use? Well, what is the use of a newborn baby? Which is yes, what is the use of a lot of physics that we now understand? And boy, would that baby grow up to be the way our world runs? That was one good baby. Alright, so let's visualize how to make use of this. So let's take a magnet and let's spin a coil wire inside of it. Current will flow through that wire, but the way that the wire is spinning, you're going to end up with current that actually switches sides because the change in magnetic field, it goes high and then goes low. And then the direction flips when the wire flips. Right. So you end up with a sine wave coming out of current of the wire, also known as alternating current. Well, at the time, they wanted something called direct current or DC. And so what they would do is try and figure out a way to only get half of the sine waves, only get the upper part, right, to get this pulsating DC current. They would make this connection, this kind of brushless connection at the ends of that. They would flip the direction so that it'll only connect on the opposite side. And so you'd end up with this pulse of the upper part of the wave and the upper part of the wave and the upper part of the wave.
So you can use it as DC current. And the goal was that DC current is potentially more stable. More stable and more intuitively usable for a bunch of the devices. The DC current was like what the Viltake piles put out. So any of the experiments, anything was used to working with the steady voltage. We'll get into later how the world evolved. But a device that would take this rotating coil, turn it into current in this way, it's called a dynamo. The cold powered dynamo becomes the first real scaled way to make electricity. It took 35 years from Faraday's initial demonstration to launch a practical dynamo. So by the early 1870s, there's a Belgian engineer who had figured out how to actually make this thing in a way where it would actually work in some scale. Then all of a sudden, you had the ability to turn coal into steam, steam into motion, and motion into DC power. And so you could do things with it. What do people want to do with it? Well, the first thing was actually lighting. Lighting was an expensive concern of the time. And especially public lighting. You think we're going to jump directly to Edison, but no, there's another type of lighting that was actually ramped up faster and earlier called arc lamps. And this is where you would take a material, usually carbon electrodes, bring them close to each other, and drive the voltage up. When it got high enough, there'd be a spark and the air would ionize, and the electrodes would heat up, and there'd be an intense white pulsing light. And so this was the first way that there's public electric lighting. They lit up the streets in Paris on some of the main avenues this way. And on one hand, it was kind of fancy. On the other hand, supposedly, the light is like terribly white and bright and uncomfortable in pulsing. Some visitor, Paris, and this is magnificent illumination. And someone else says, the light in Paris is horrible and earthly, obnoxious to the human eye, a lamp for a nightmare. Such a light as this should only shine on murders and public crime, or along the quarters of a lunatic asylum. To look at it only wants is to fall in love with gas, and by that he means coal gas, which gives a warm domestic radiance. So coal gas is going to be used as light. That's right. That in this era, there was really two primary sources of lighting. There was either burning something. This is the candles whale oil and then a growing booming business at the time, caracene, our friends at standard oil. Those were the things that you bring to you in a jug and manage the supplies of. So very useful, especially in rural or non-connected contexts. But coal gas, also known as just town gas or gas, was piped from a gas works where you heat up coal in the coke. And the byproduct would be this gas that you could burn. These gas would be this combination of hydrogen and methane and a bunch of other particulates and sulfur and whatnot. And so that was how especially growing urban areas were lit. Every little township in city would have its own little gas works. One of the ones that are most familiar with it and some people texting me about after part one is Seattle Gas Works Park. Gas Works Park. I used to live like four minutes from gas works park. Doug into this and the Seattle Gaslight Company built this coal gasification plant that was running from 1906 to 1956. So not that long ago, it was shut down. It became a public park in 1975 that we can now enjoy. But the coal was sourced from the east side, right from Renton. And I think there's a coal mine and new castle area, so not far from here. And it's applied neighborhoods all around. Right? So coal gas, there's these old train tracks actually. You know near the parking lot of gas works park? That's where the coal would come in on the train. Come into gas works. They'd heat it up. They'd turn it into coal gas and they'd pipe it from there out to Wallingford, free of that capital hill, right, to power like coal gas light in all these houses. At a tight, it's applied gas as far south as Kenton, as far north as Mocol Tio. We don't have to get into just the salary of geography, but those are pretty far away. Those are like 45 minute drive from Seattle. The same thing was actually happening in San Francisco. San Francisco had a coal gas lights that began in 1854, the San Francisco gas company. So in this case, the plants were actually located on the water, well known by this point, water is the other way to transport coal. So coal would come into the Marina district and fishermen's wharf. It'd be shipped sometimes by Eastern US mines and come in and they'd take the coal, gas fire and pipe it through to the houses, right? They have that old remnants of the coal gas lighting and ran until we were able to swap all of the stuff out for natural gas and electricity lighting. And so at the time, you know, a fancy house in New York City, a developing part of Seattle, San Francisco, the downtown streets of London all had these coal gas lamps. And that worked, but it was messy. I mean, you have to light it and turn it off. And so it was quite a hassle to live and work with coal gas. And so as soon as you had electricity and arc lamps, it became an exciting thing for the public. But let's remember that you don't want this bright, eye-straining light in your house. Like it's a very different environment for lighting. And so there was a well-accepted view that if someone could figure out how to make a nice light in your house, that would be quite a market for electricity. We've got market pull for the product, but the product is not delivering what the customers really want. That's right. I mean, people want to see past dark. Now we introduce our friend Thomas Edison. He had been working for a long time to try and crack this problem. And he had invented other things prior to working on lighting. But the key is that he built out this lab called the Menlo Park Lab, not to be confused with Menlo Park California. This is Menlo Park, New Jersey. And he just stocked it with everything they needed to try and figure this out. So it was just pure persistence and perspiration. And so in 1879, they figured out a carbonized bamboo, I believe, as the key element that would actually work and be able to run more than a couple hours and burn out inside a bulb. And thousands of people would come to visit the lab to see this miracle-avian condescence. This nice glow that almost felt like what you're used to seeing from a candle or cold gas, but driven by electricity was magic. Well, guess who financed this lab and these experiments? That's right. Our good friend, JP Morgan, comes back into the mix. And this guy, he loves the coolest thing on the market, right? And so your 1880s, there's about 50 million Americans. And Morgan is running around to this high society of old white men with money. And they're good. They're happy with what they've got. They want to keep dominating their monopolies. But Morgan was different. He really liked the new thing. He wanted to find that new temper of the times. And he admired men like Edison, who were bold and ambitious and hardworking and confident. And so late one spring, Morgan comes back from a long European tour. And he had all these issues piling up from his railroads and his steel. And he actually puts all his business concerns aside and announces to Edison, what would be a fairly audacious decision. And his prominent individual says he's going to personally showcase the advantages of Edison's pioneering in Tindeson light bulb in his own Madison Avenue brownstone in the middle of a top to bottom renovation. Some organs Italian mansion would become the first private residence in New York to be illuminated solely by electricity. It wasn't a really easy feat, but it was remarkable. You know, just call up your utility and just say, like, hey, Seattle City light. Like a drop from the utility pole flip the switch. Well, as as all good startups have it, you know, everything's made of toothpick and bubblegums. And in this case, the manual operator in the background behind the perceived automation was a generator had to be run by an expert engineer. That's the first and would come to house at 3 p.m. and got the steam going. And anytime after four o'clock on a winter's afternoon, the lights could be turned on. And then the man would go home at 11 p.m. after the lights returned off. Just to like make sure this is well understood to add lighting to his house. They had to add one of these dynamos at the house. There was going to burn coal to generate the electricity. It's like run by a local generator. And so that had to be managed. So there was like someone shoveling coal and operating this dynamo and they'd come at when it started to get dark to turn on the lights. And then they'd go home. And supposedly some of the times they went home, they didn't know that like people were still over and he was still entertaining people. And the lights would just go off because the power just turned off because the power man went home. The power man went home. The coal shoveler. It's also interesting because we'll talk a lot about how utilities evolve. But like this is distributed energy. There was no transmission lines and substations and all of this. This was just generating the energy at his house and using it locally. Single point source, locally source. Well, Edison of course doesn't just want to electrify house by house by house. He came into this with the vision of I want to electrify and light the entire city. So the light bulb was just the beginning. He wanted to delivery system that would distribute power and electricity at scale. Now there was at this time some electricity use across New York City, but it was these weird localized deals. There would be rats nest of wires to have a dynamo in one space and it would be a wire running into a factory or for some kind of transit thing. And it was all this above ground mess and some company would go out of business and they leave their wires dangling. And Edison looked at all of this and was like this is not how it can be. We need to build this into the infrastructure of the city. He wanted to build this underground network. They almost modeled after subways. These tubes of it house these copper lines distributed around and they built the first power station on Pearl Street and turned it on September 4th 1882. This is the first commercial power plant in the world sitting there down in lower Manhattan. And of course it burned coal to generate steam. Of course.
to produce the electricity that are operating on the principles of Faraday's Law and Electromagnetism. And that generated enough electricity for about 400 lights across 85 customers in a small section of New York. But those are the first folks to really have a utility of sorts powering their lights. It expanded and within a couple years they were serving 500 customers with 10,000 lamps. And they set up the Edison Electric Illuminating Company of New York and continued to grow and grow. And they powered the New York Times Office Building and of course JP Morgan's offices downtown. And it was a modest start, but a significant one. I mean, they didn't have to do any marketing because their product was glowing. I mean, imagine this lower part of Manhattan just glowing at night and it's a story that tells itself. And the newspaper reporters, I mean, there you are, the New York Times Office is lit up. And you're like, what better thing to write about? So they wrote the site of electricity lit streets as though a soft moonlight had fallen over the city, but brighter, pure and more perfect. They loved this light. And Edison was not a humble guy. He loved people calling him the genius and the inventor and all this stuff. And he saw himself as a force of history. He declared, we will make electricity so cheap that only the rich will burn candles. And he was very correct. Candles are now the bougie way to get some light on a dark night. That's right. You know, this as you can imagine didn't do well for the gas companies, the coal gas companies at the time. They plunged in value. Their stock prices dropped and the British parliament wanted to reassure the gas investors and said, you know, we're going to look at Edison's claims and they said, Edison's wild genes might be good enough for transatlantic friends, but they're unworthy of the attention of the practical or scientific man. And that neither Mr. Edison nor anyone else can override the well-known laws of nature, which is to say, because Edison was starting to talk about other uses of electricity at a time. And so they pushed back. They said, the idea that the same wire that brings you light will also bring you power and heat. There's no difficulty in seeing the more is promising possibly be delivered. And the talk of cooking food by heat derived from electricity is absurd. But Edison had, he had a vision, right? And he wanted to keep a grip on the entire system. And he wanted to create a vertical monopoly, the building of the power plants, the laying of the wires, the supplying of the light bulbs. And his thought was to make money by selling the current. Same way a gas company makes their money selling the gas. But JP Morgan is kind of in his own world of building a business. He had a different idea. And since instead of creating the commodity of electricity, Morgan wanted to structure the electricity business round the machinery that makes the power. To Morgan, it was easier to build and sell a widget at profit than it was to get involved in this complicated business of creating and managing electricity. And so these two visionaries had slightly different approaches for how to go forward and where the greatest profit and impact would come from. You know, as you're saying this, I wonder if Morgan thought of himself as a B2B investor and as he wanted to build a B2C company. Edison's like, I'm imagining the house and like, the cooking food using my electricity. I want to own the light bulbs that go into the house all the way through to the generating of that electricity, you know, at the power plant. And Morgan's in there like, let's just own some toll in the stack. And that's probably sufficient. Now, as you can imagine, everyone's walking on scene is like, Edison's not the only one doing after this market. This is now a hot market that everyone's excited about. And so there was an alternative approach, but Edison was a believer in direct current DC to do everything and thought it was safer and thought it was better. It's simpler. There's an alternative approach led by Westinghouse and eventually Nicola Tesla and some other folks called Thompson and Houston company. There was proposing to use alternating current as the mechanism for transporting and using electricity. This led to the war of the currents, which we'll get into down the line in a future episode. But think of it as like taking the Android versus iPhone or Mac versus PC debate and dialing up to a thousand, right? In terms of the intensity and it was in the newspapers and thought in the public square. In the end though, AC one as it was simply the better technology. It was the better way to do the thing that they were trying to do. And America's eventually cold powered electric grid was built around alternating current AC. JPMorgan, as we talked about, isn't one to mind conflict. He wants to be right in there. There's an opportunity. You've got AC. You've got DC. You've got competing approaches. You got Edison. You've got Nicola Tesla and Westinghouse. So what does JPMorgan do? So when someone's on the ropes, he swoops in and buys the boxing match, you know. And so he took Edison's general electric company and merged it with Thompson, Houston, which was one of the leading AC companies at the time in 1892. And that became a little known company called General Electric or GE, which would go on to build so many important products. And at some point in the year 2000, it was the most valuable company valued at $600 billion market cap. And so just in this era of like a decade, JPMorgan has financed US Steel, which was the biggest company of the time. General Electric, which was the biggest company 100 years later. He'd financed the government. He had financed railroad consolidation. Legend. What a moment in time. And so as demand grew for electricity, there was a desire for just more reliable and a larger scale system. And the first issue here, the amount of coal you use to power all this electricity and power all these lights started to become an issue. And if we go back to the what steam engine, which is the fundamental design powering these generators, got to something around a 10% efficiency. That's leaving a lot on the table. That means only one out of 10 bits of the heat energy coming off the coal is making its way out into the electric grid. And not just that, but those steam engines were a lot to maintain. So one of Edison's business partners had heard about an English engineer named Charles Parsons, who had invented a new way to turn coal into motion. And that is using a turbine. And a turbine is a radical simplification of the piston driven steam engine technology. So instead of having belts and crankshafts and pulleys, you just have a fan. And if you have high pressure steam, you can push it through the fan and the fan spins. And if you need a fan to spin, you can connect them into the fan and then you have spinning motion. And that elegant design ultimately led to the most efficient way to turn steam and therefore coal or any heat source into motion. And is the fundamental way that we still do that today. And of course it led to the way that we propel planes and other turbines in the world. And you can think of this moment as almost as foundational, I think as Watts evolution. But Parsons is not one of those names that's as well known. Not at all. And what we'll get a little bit more into this when we walk through a coal plant later on. But this is the fundamental step change function in efficiency in a new way to burn coal to produce electricity. And so that you know, effective turbines are 30% efficient. So you get a three X improvement in you know, translating the energy into useful motion, which could then be turned into useful electricity. So we made it more efficient. So are we going to use more of it or less of it? I think we might use more of it. I don't know. It's paradoxical. Wouldn't you say? We've now mentioned Javan's paradox a couple times here. So let's take a little aside. William Stanley, Javan, who described this presumably counterintuitive phenomenon, where a tech advancement that increases the efficiency of resources. What paradoxically lead to the increased consumption of that resource, rather than the decreased consumption of the resource. So I think that the conventional wisdom was if you make something more efficient, you'll use less of it when in reality what happens in many times is you agree to the efficiency use more of it. And Javan was was mentioning this in reference to the steam engine. He observed that steam engines became more efficient and coal consumption increased rather than decreased as we've been talking about. Because it was lower cost to use the steam engines that led to wider use cases. And we're seeing this again now with the turbines and we'll see it over and over again as just kind of the story of coal as you find more efficient ways to burn coal to mine coal to transport coal. You just use more coal. Yeah. So Edison once they figured out that these turbines work they wanted one and they wanted to build it into their business. And so Edison and his right hand man, the guy with the name of Samuel Insol contracted with their old AC Nemesis who at that point was running general electric because Edison can have stepped away from general electric. He's like, okay, the AC guys are taking it over. But then they can you know what can you actually help us build on these turbine things. And they said that they would share on the cost if it had been a failure. Well 17 months later they had their first steam turbine driven power plant on Fisk Street in Chicago. And it was unlike anyone had seen before it looked like this giant jet engine pointed towards the sky. Right. Good spin this huge fan blade and generate consistent electricity. And the other thing that's cool about these things is they're actually like quite easy to control dial in the RPMs that are spinning which becomes important because the spinning RPMs controls ultimately you know the power output. And so over time as you build out the grid like you need these things to sync up. And so this fine tuned control becomes a really important feature. Yeah, perhaps not easy but controllable. That's right. And so this first station produced twice as much power as any steam engine ever built. Wow. This is tremendous. I mean the triumph of a large coal fired turbine is a real win for the people right because if you're producing this at twice as much power and you're doing it more efficiently and it's going to become cheaper. So at this period, the average
price that Americans paid for electric power fell from $4.5 per kilowatt hour in 1892 to just 62 cents in 1927 to 47 cents in 1937. So over this period of about 40 odd years, you went from $4.5 to under 50 cents as price fell, consumption grew because, guess what, electricity is very interesting and there's a lot of use cases. And this continued, right? So from the 1920s through the 1970s, the demand for electricity doubled every decade because there was just such a pent-up need for this. I mean, we continued to invent new ways to use it. And in the early 1910s and 20s, power stations are expanding rapidly. The idea of the interconnected grid where electricity can be moved across long distances from coal plants to cities became a reality and formed the modern grid that we're talking about. I mean, this was seeded by Edison's view that we should have power plants and distribute it and not like have to generate all the stuff with local generators or dynamos or turbines. But it was really executed by this guy Samuel Insol that we mentioned. I think he's best considered like the godfather of the utility, right? In a way, so he started with this plant in Chicago, but built out this Midwest network. And at one point, over an eighth of America's energy was generated by power plants and utilities that he controlled. And his key belief was essentially like scale is everything. And so he was much more interested in having a thousand customers that paid less than a hundred customers that paid more. I think he's like the Bayes' Amazon thinking of the time, right? It's like, let's bring down costs. Let's run this thing at cost. Let's get everyone hooked. And that is the right position to be in. He is the one that came up with essentially the idea of the public utility commissions that would grant these monopolies because again, it was kind of against this inefficiency of, hey, let's have seven people trying to sell you power to your house. It was no, let's have this one scaled player. And, you know, maybe there's a different one over there. Maybe I'll own that one also, but you know, there'll be a different entity. And design this thing as a utility that is scaled. It worked because the economics of building bigger power plants ended up being the more efficient plants of the time. And so once you built a plant, you want to run it at full capacity and increase that capacity as you go. A good analogy is like an airplane or a data center. You want to use it and operate it as much as you can to amortize that initial expensive buildout. And it turns out that the input of coal was not the primary cost of operating this. It was building the plant. And so you really just want to run it and sell as much as you can to get people hooked. That was the major unlock. And it's this nice kind of symbiotic relationship between the best way to run this business is to amortize the cost over running it. And the vision is around, it's called a utility for a reason, right? Like it's become a public necessity. It's become a public good. And so you want to expand the use of it as much as possible because that's the vision you have for society. That's right. In 1905, less than 10% of homes in America were wired by the late 1920s, 75% were. Right? And so this is a rapid, rapid point of people really getting electricity to their house for the first time. It's also led, you know, Samuel and Soul pushed heavily for standardization, right? He wanted this expansive grid. So he pushed heavily for standard voltages for transmission. So that things and equipment being able to interoperate. And this all led to ultimately more efficiency in the system and the ability for that expansion. Now the flip side of that is once that's built out, there's less and less incentive for adaptation. You've built out this big centralized infrastructure, right? That you want to fully utilize and expand upon. That's the opposite of distributed energy closer to where it's consumed in the distribution networks. If you ever could move to local generation, it erodes that rationale for this monopoly model, which echoes forward to some of the battles you see today. In the end, I would say that coal power plants are the embodiment of centralized control and monopoly power. And so what all this did was it made electricity no longer a luxury, no longer just limited to JP Morgan's house that could run from 4 to 11 PM. But cities could stay awake after dark. And factories could run up to 24 hours a day, seven days a week, supercharging industrial production, right? And remember, manufacturing boom is happening. Street lights reduced crime. Urban life became safer for people. The electric streetcar was introduced and expanded cities into suburbs. And at home, electricity was a revolution in convenience, right? You have the electric washing machine that was introduced in the 1910, saving hours of work every day. You had refrigerators that made food storage safer and it replaced the old icebox. You had radios that connected people into the world in real time, which was unthinkable. The gossip and the hearing about things from hundreds of thousands of miles away was unthinkable decades before. What was behind this? It was coal, right? And by 19, 20, 75 percent of America's electricity was generated by coal-fired power plants. The scale was just enormous. And to keep up with this demand, coal production tripled since Edison's first plan. By the 1920s, America was burning so much coal for electricity that if you stacked coal trains end to end, it would stretch from New York to San Francisco and back every day. That's how much coal we used every day. Every day they're burning it. Wow. And they're just getting started. Just getting started. I mean, it's amazing. We're just talking about 30 years for electricity back to like that. What an explosive thing from a transformation perspective, right? We think about how long these other time horizons were. And I think something so much more in people's lives, right? You walk around a city, you see it. It's amazing kind of foreshadowing, I think, of electricity being the dominant way that people experience coal versus the cold self. That's right. And these are the 30 years we have spent the most time on in this episode because it is just that important. That's transformative. Well, America wasn't the only country undergoing this energy revolution. Wait, America is not the only country. Not the only country in the world. Europe was electrifying as well. And so Britain was already, of course, dominant in coal. And the steam turbine was invented there by persons and others. And so very quickly Britain expanded its electrical infrastructure as well and followed. I kind of think of the US and Britain as going through like a, a smartic process with technology, right? They're sharing people, they're sharing ideas, people are traveling back and forth between the two. The Soviet Union was also kicked off a bunch of massive electrification projects. And short, you know, wherever there was coal, there was power. The energy race wasn't just about technology. It was about geopolitical dominance, right? A country with abundant coal and grid could produce more, could move faster and could outcompete its rivals geopolitical dominance early 1900s. Something tells me that coal is going to play a big role here. Because if you were designing the perfect energy source for the early 20th century, you'd want it to be abundant, reliable and powerful enough to fuel massive machines of modern industry. And it was coal. Coal wasn't just the foundation of industry though. It was also as we'll soon learn the foundation of war. 1914. Everyone remembers this is the beginning of World War One. But let's pretend that we're in our kids elementary school class. We want to just do a little bit of a 101 on World War One. Because let's be honest, we all remember France, Ferdinand, something happened to him, but I don't know if all of us retained what happened. So very quickly, early 20th century Europe was dominated by great empires that were increasingly in competition. You had the British Empire, which was the world superpower, ruling over vast colonies and global trade. You had Germany that was an rising industrial and military force eager to challenge Britain. You had France that was still powerful even though it had just lost the Franco-Prussian war to Germany. You had the Austria and Hungary and Ottoman empires that had been around for a long time. They were declining, but they were still trying to hold their influence. And then you had Russia over on the east. It was an enormous empire with ambitions into Eastern Europe and the Balkans. And in the background, you had this massive militarization of empires, including a naval arm race. And so you had this complex web of alliances that actually ironically had increased the chance of war. Because if one country in the alliance was pulled into conflict, it was going to pull the others in. You have imperialism and global competition for colonies and resources that combined with ethnic nationalism on the European continent. It's just this, the Cinderbox, it's a Tinderbox. And then June 28, 1914, Archduke, Franz Ferdinand, the heir to the Austro-Hungarian throne, Duke had kept. He got got. And the Tangal Web of Alliance has pulled the entire region into the deadliest war to date. Now why was it so deadly? Well, the first world war was the first truly industrial war. Armies weren't just fighting in the trenches, although they were doing a lot of that. They were fighting in factories and in shipyards and along the railway lines. It was the steel for artillery, the movement of troops, the battleships that controlled the seas. All ran on coal. If a country had coal, it could fight. If it didn't, its war machine was slow and could not compete. Let's turn to the UK. In 1913, there were over a million men working in the mines. That year,
They had extracted 292 million tons of coal, about a third of which they were exporting overseas. Incidentally, we'll get into this later, but this is the peak of British coal. This is the most they were ever extracting, leading into World War I. The British government knew that coal was going to be essential, so they actually, even though they had so much, they started to restrict supplies, and they would say that it was unpatriotic to hoard coal. They were worried about coal shortages, and going into the winter in 1914, they started to restrict street lamps usage and dim lights to use less coal gas. And the coal queued. The line to go pick up coal became a thing. There's a story of a young woman running around. She was staying in a house with her elderly mother. She said, "My mother was old and ill. Our house large and old fashioned with a huge kitchen range, no other apparatus for cooking or obtaining hot water." Right? There was a fully coal-dependent house that we had talked about in part one. Then came in day when my mother was worse, and we had no coal. So I drove around London in a cab with a laundry basket, begging just for a few lumps for this friend and that. My coal was domestic life at the time. And so just to set some context on the scale of the British Empire at this time. By 1913, the British Empire held sway over 412 million people. That's almost a quarter of the entire world population was under the British Empire. Dang! They're winning that colonialism thing. They certainly did. By 1920, they also had 25% of the Earth's total land mass. The phrase, "The Sun never sets on the British Empire." It was true statement. And the scale of people, the small island, had conquered a quarter of the world, largely driven by everything we've spoken about this last century of coal. This period leading up to the war was called a sort of Pax Britannica, right? A British peace period from the century, from 1815 to 1914, because the British Empire was so large and powerful that it led to relative peace. But going into the war, Britain was in a unique situation when it came to coal. They were just this lack of geography that has really come to bear here. They have this massive empire. The British Isles were rich in high quality coal, so is Anthracite, which it burned hotter and cleaner than other types of coal. The wealth anthracite was especially valuable for the naval use. It gave Britain a serious advantage, which already had the most powerful navy in the world, because they could stay at sea longer, they could operate more efficiency, they could maintain these global trade routes. And so within weeks of war breaking out in 1914, the Royal Navy of Britain set up a blockade around Germany, cutting off not just food and raw materials, but Germany was importing its coal. And so it cut off its critical imports. And Britain's advantage wasn't just about having the coal, as we can see. It was about having the global infrastructure to distribute it and control the lanes that it flowed. This is the era of cooling stations. So naval vessels would refuel at outposts spread all over the world. And because of Britain's vast empire, they had this incredible network of stations in Gibraltar and Malta and Singapore and South Africa and the Falkland Islands and Vancouver. Their warships could travel vast distances without worrying about running out of fuel because they had a cooling station that they controlled and they could stop at to refuel. Let's put a finer point on this. We're talking about over 100 years ago, the British took Welsh coal, which you had already said was this magic coal for the Navy. It was packed more energy and because of the anthracite, it was less smokey, which is important for stealth and visibility and warfare. And they'd taken this Welsh coal and distributed it around the entire globe. Vancouver is 14,000 miles away. And they'd put coal in all of these strategic locations so that they could move their Navy around, which was purely coal powered by this time. There was a small war that broke out before the full World War I. There's a 1904-1905 war between Russia and Japan. And Britain was allied with Japan at the time. And so they blocked the Russians from accessing the Suez Canal to get to the Japanese. A Russian general said, our comings are goings, our voyage and even our success depend entirely on coal. coal had developed into an idol to which we sacrificed strength, health and comfort. We thought only in terms of coal, which had become a sort of black veil hiding all else. As if the business of the squadron had been not to fight, but simply to get to Japan. Coal was transportation. Transportation was war. And like, it was the foundational thing. And the British just had a lock on the entire infrastructure. It's just a logistical game changer, right? If a German warship set out across the Atlantic, it had to bring massive coal with it. Which displaced the space that it had on the ship for weapons and supplies and people and food. And it had to go and find neutral ports willing to sell them fuel. Whereas Britain could actively prevent them from happening through blockades and diplomacy. And Germany had very few overseas coalings stations. So when war broke out in 1914, German warships that were stationed abroad were basically stranded. Because they had either set out to sail, they'd risk running out of fuel. Or they'd have to bring so much of it that it would be so inefficient to carry that much on board that it limited its range of effectiveness. While Britain controlled the lanes, it controlled the coalings stations. And it had the allies to control how far that they and others could go on this very naval dominated war. Just to get to the naval point of this, it wasn't just that they had the coal infrastructure, but it's that they had built ships that were fundamentally more technologically advanced by virtue of being a coal driven industry and society, right? Prior to the war, from 1898 to 1912, there was this fight between this kind of shadow, almost like a cold war between Germany and the British Empire on building a fleet, right? The German army looked over at the Royal Navy and kind of had jealousy, had naval jealousy, syndrome. And so they set out to build the Imperial German Navy to compete with the British Royal Navy. And the British had a bit of a secret weapon. Let's go back to the best way to spin a thing using coal is not the old steam engine technology that everyone had access to now. It is the steam driven turbine. The turbine. So that seems Charles Parsons over there in the UK spun up a little company and built a prototype, an experimental ship, a hundred-foot ship called the turbine. Maybe if he'd named it the Parsons, we'd know who he was. We shouldn't call them like turbines, we should call them Parsons. That's right. But instead of making a bunch of fast while he's building this thing in prototype unit, he waited for this moment. There was going to be a Royal Navy celebration in 1897 of Queen Victoria's Diamond Jubilee. And there was this big demonstration of the strength of the Royal Navy. There are 165 of their top warships. Turns out the Queen was sick, but the Prince of Wales, who's taking her role in this celebration is watching over the entire Royal Navy move through this passage. Well, as soon as the Royal Yacht had taken him on his tour between the Royal Ships, this boat burst on the scene and it sped through the entire Royal Navy of cruisers and destroyers. They tried to catch it and they couldn't. It was faster than any ship that had ever existed. Right? And they didn't even know it was there. The Times had said the patrol routes which attempted to check her adventurous and lawless proceedings were distance in a twinkling. So for context, the Turbina could move at 39 miles per hour and the fastest ships in the Royal Navy moved at 31 miles per hour. Talk about a mic drop product launch. Oh yeah. And so of course, that's a way to get the attention of your customer. Right? This is the defense contractor selling to the Army. And you're like, yeah, don't you want some of these? And they certainly did. And so they very quickly built destroyers built on this technology. The most famous of which was the first turbine powered battleship, the Dreadnott, which was built in 1906 and was driven entirely by these turbine engines. And the Dreadnott was, I think of as like the first glomeration of all of these cold-driven technologies at once. It would burn a thousand tons of coal per day when operating at full speed. And it made other ships essentially obsolete. Right? had these large guns that were mounted with kind of consistent large caliber and long range firepower. So it could shoot much further than any ship. It was all these turbines driving more efficient use of the coal. And it essentially revolutionized naval warfare. It carried almost 3,000 tons of coal. So it burned a lot of coal, but it carried three days worse, which meant if you think about the path of the battleship, it always had to be able to move to one of these cooling stations that you were just talking about earlier. Every couple days. Exactly. Let's just put these, this tonnage into reference. So a thousand tons of coal is about a fully loaded freight train of coal that they were using every day. I mean, a ton is like the weight of a small passenger car. So I mean, burning a thousand-car wheat's worth of coal a day. It's wild. And this tonnage, this doesn't move itself, right? Coal logistics is a nightmare. Warships had huge crews of stokers who were men whose soul job was to shovel coal into the massive boilers all day long to power it. And in these long voyages, they needed to stop and refuel and keep stoking. And the operation of stopping and refueling could take several hours, which leaves invulnerable to attacks. And so they have to be more and more efficient. So the naval battle that shaped so much of World War I comes down to a lot of logistics and the reality of managing coal and managing where the coal is coming from, how it's being burned, where and where you're going to get the next coal. There's a war of refueling in that context, right? Which is wild. So Germany was not quite in the same powerful position when it comes to coal, but it wasn't not in a position, right? It was already the third global largest coal producer after the US and the UK. And what they did have going
for them, although it wasn't the Navy was a more advanced chemical industry. German scientists had built a BASF built originally for chemical dyes and explosives, but BASF was taking coal, making coke, which produces the coke and coal gas and produces coal tar. In coal tar is this substance of all these other hydrocarbons, benzene, hydrocarbons called tooling. And tooling is a key input into TNT. And so the Germans became kind of the most advanced, I would say at the time I think of turning coal into weapons. The other big thing that they invented, leading into the war, was the Haber Bosch process. So, you know, the Allied powers had access to large sodium nitrate deposits in Chile. And those had become interesting because they had been fertilizer. And we're going to do, don't get me going on fertilizer, we'll do that one day. But at the time it was mostly relevant because sodium nitrate is a key input into making bombs. Well, the Germans wanted to figure out how to do that without, you know, they couldn't get access to these aisles off the coast of Chile. And so they had built this process called the Haber Bosch process, the Demetri in 1909, started to scale up, leading into the war. And coal was the key input into that process and key power driver, one of the process. And so the Germans really leaned on the synthetic chemical processes to drive part of their war machine. But of course, that took a lot of coal. And Germany didn't have nearly the coal supplies that its enemies did. That's right. So here we are, World War One 1917. The war's been going on for a couple years now in Germany's in serious trouble. Their own coal supply is struggling to meet the demand. And the blockade that the British have put on is making things worse. And the German militaries asks actually having to make strategic wartime decisions based on coal. So coal shortages meant that German railways, which ran on coal, could not operate efficiently. And so that was leading to supply delays in the front lines. And even when Germany could mine coal, they couldn't transport it fast enough. And so soldiers waited longer for food, for ammunition, for reinforcements, and it was weakening German's ability to sustain its offensive. The factories were struggling to meet war production quotas. Steel mills and munition plants that have been running at full capacity were now rationing power. Meanwhile, in the background, civilian hardship is growing. And so coal is not only running the war effort, but it's also keeping civilians alive. And Germany entered what's called the turnip winter in 1916, 1917, one of the coldest winters at that time. And the coal shortages meant that millions of Germans couldn't heat their homes. And so you have this confluence of impact across the war front, the supply side, and at back home that's all being constrained because of their lack of access to coal. A little side fact on this, this is the time when daylight savings was first introduced. The Germans were trying to find a way to reduce the consumption of coal, which was again being used to light homes and he buildings and all this stuff. And I said, well, if there's some daylight earlier, let's shift when we're getting the factories going to match that. Let's not use lights, you know, after hours. Let's not allow folks to take elevators, you know, if they can take the stairs and find all these all these things. And so Germany introduced daylight savings time to this time. It actually was adopted by their enemies for the same exact reasons. Everyone's trying to ration coal. They got a done. It got redone through various wars all based on energy supply and energy usage. That's right. In the U.S., we were facing an acute fuel shortage during the war and coal production was started to soar to me war time demand and the growth of coal had dissolved in this background of smoke abatement and the if you with health and the federal government actually came out and said war means smoke. We just have to deal with it and coal production is going to rise. And so enter the final stages of war. The war is dragging on in 1918 and Germany's industrial workforce, particularly the coal miners far the stand-up stream on the supply chain here. They reach a breaking point. They're working long hours terrible conditions. They're getting less and less pay and by late 1918 all of their families back home are suffering through these coal winters and food shortages and so strikes break out across the country. And this is a total disaster for the German war effort. Without coal, the factories shut down. Without coal, the trains stop running. Without coal, the troops can't get their weapons or food. The country simply could not sustain the war any longer. And by November 1918, the economies on the brink of collapse people are an open revolt and Germany agrees to an armistice. The war ended not just as a result of the battles fought on the front lines, but also because of the German war effort had run out of fuel, figuratively and literally. And even after the war ended, coal remained a political weapon. Right? And so as part of the Treaty of Versailles of 1919, Germany was forced to give up. I remember reading you study about the Treaty of Versailles so many times throughout high school, never really realized Germany was forced to give up a coal rich basin to France and hand over coal deliveries to Belgium and Italy. And this ensured that Germany would no longer have access to as readily available energy resources to rebuild its military anytime soon. Now we do see that of course Germany goes on to rebuild its military, but this was one of the efforts to slow it down. Coal is at the center of this conflict and we'll see that coal plays a different role as we move forward into the next big conflict. So after the war, there'd been this heads down mentality of we're going to do what we need to do to get through the war to supply the war machine and all of this. But as an IIT up, the German miners had already become a tip of the spirit of frustration. Well, the same thing rippled across the UK and into the US. And so in the UK, there was right prior to the war, the miners' federation of Grip Britain, which was kind of a core representation of coal miners' unions, had actually found it and kind of evolved into the Labour Party in 1906. And remember coal, heat and production in 1913, leading into the war. But as is the case, like when you're digging for something, digging deeper, it only gets harder. And sometimes there's these technological unlocks, right? Like the steam engine, the pump water out to make it easier to get to coal. But sometimes there's not. And it's just physically, geologically harder. And so essentially getting to coal got harder and harder, which meant it got more expensive. And when that would happen, there's this consistent pattern of the miners taking it out on the miners and driving wages down always. And so the miners thought there was a political solution here, right? The Labour Party was starting to gain little bits and pieces of power. They thought the solution would be, well, let's nationalize. The people, the public should control the mines. Didn't happen then, but this kicked into motion and excitement for that idea. Meanwhile, the Russian Revolution kicked off in 1917. They disposed the Tsar and the socialist powers were taking over the country and taking over the levers of power. Kicked off, and remembered part one, by Marx's writing, funded by the industrialization Manchester. But seeing that happen started to electrify across Europe, the labour movements and powers. And so each time mining got tougher, we just were driven down. Unions would be outraged. There'd be strikes, right? And some of these strikes bubbled to the state of violence. One of them, the Prime Minister Pannock, called up 80,000 special police, called in a state of emergency. They set up machine guns around the coal mines. Oh gosh. Put it in the hands of the military. And so that was in 1921. They locked the gates and told miners they had to agree to the pay cuts or lose their jobs. And there's this sort of pattern again and again and again. And generally what would happen is, you know, there'd be little bits of progress, but typically the mine owners got their way. And the miners would take the pay cut and go back to work because they had a family to feed. So 1926, the first general strike ever in British history kicks off where over one and a half million strikes across the country. And you know, of course, the usual things, the miners refused to have their pays cut. The government kind of sides on the side of the owners and tries to maintain services. And there's dispatching of warships and soldiers in the London parks and Churchill's kind of at the center of this. There's a propaganda newspaper he's putting out on one side and they're claiming that the revolutionaries want the Buckingham Palace to be taken over by the Soviets and it's all kind of the flaring. But at the end of the day, the same pattern essentially emerges. And eventually there's crumbling support. And the general strike fails. I mean, you can't imagine that 1.5 million people coordinated across a nine day, like you can't imagine a better effort that still fails. That's right. You know, I think what it did do though is it set the stage for more public support. And the way that the public ends up supporting is giving the labor party, which emerged from the miners unions and all of this. I'd say more and more power, which leads into an eventual move towards nationalization post-World War II. Now go back to the US and essentially a very similar chaos is brewing. We had the United Mineworkers of America, which since the beginning, every time they tried to unionize anyone in the coal mines in West Virginia, a hard stance was taken. Right? These were coal mines where everyone lived in company housing. And if anyone unionized, they'd be fired immediately and they'd have to move out to the tent colonies. On 1920, the United Mineworkers president, John Lewis, went in to try and unstick this. And he gave these fiery speeches and he teamed up with Mother Jones again. At this point, it was 83 years old. And she said to all of the workers she could come up to the head of the creek and call out for all the men that want to be let out of slavery. Follow me. Thousands and thousands.
thousands of men joined at that moment, 3,000 from Mingo County joined and were immediately fired. They were spending all day under terrible working conditions, low wages and as we can tell, oppressive control by the coal companies. And any effort to unionize was met with this fierce resistance from the coal operators who they went to the extent of employing private security forces and colluding with local law enforcement to suppress workers in August 7th, 1920, a rally was held where miners read their demands. And no progress was made and you know, 7 days later, 13,000 miners gathered ready to fight. Fighting erupted on August 25th and by the 29th it was a war zone. They were fighting a strong private army. To the point where private planes were hired to drop homemade bombs on the miners, which is a combination of the poison gas and explosives left over from World War I, dropped in several locations. I mean, imagine dropping bombs on your own employees. We think of today's angry Slack messages and a bad one-on-one with your boss and back then it's a bomb being dropped. But this got so bad that on September 2nd, President Harding had intervened, he sent federal troops in to quell the uprising. And you know, the miners, many of whom were World War I vets, were reluctant to fight against these federal troops that were sent in, because they were also World War I vets. And so this contributed to the end of the battle. In the end, this battle of Blair Mountain that had erupted was the largest in US history since the Americans of a war. Again, didn't succeed, but served as this rallying call this moment that marks just how upset and to the end of their rope, these coal miners were across the country. It's wild to read these stories of truly going to war against your employer. And I think part of it is like framing as an employer is probably a misframe, right? This is the time I read it up to a few months ago called King Cole, which is a fiction novel, but about the time. And it really paints a good picture of what the experience of coal mining families. I mean, it felt more like this is your landowner, your landlord, your political system. I mean, the level of ownership and vertical integration of kind of your life in the coal mine was such that like, this isn't a job, right? It's more like the enslavement relationship that we had talked about in the past. Yeah, our feudal system or certain indentured servitude. That's right. And so you're taking up arms against a system that of which you have no other, you know, there was no legal justice system at all at play in these coal mine towns. But the reverse is wild, right? It's kind of build a responsive army that's going to drop bombs in your employees and your miners, which do the fundamental work that you need. I mean, shows kind of the attitude. But the battle at the end of the day was an overwhelming victory for the coal industry owners, saying this is always on the UK, right? The United Mine workers of America plummeted in membership from more than 50,000 miners to 10,000 over the next several years, right? And it didn't really recover until the post great depression, new deal era, re-expansion of the union. It took over a decade before they finally unionized anyone in West Virginia. So we're in this interwar period and we're seeing these labor uprisings. And you mentioned the other seminal story of the time, the big shakeup of the global economy about 96 years ago, which was the great depression of 1929. It's since shockwaves through every sector of the economy and coal emulated what happened to the rest of the economy because it was the backbone of industry. It had been fueling 80% of US energy needs, including the factories, the railroads, the steel mills, and the homes as we all now know. But when the depression hit factories shut down and cut production for all of those outputs by 50% in just three years, railroad freight plummeted by 43%. Steel production dropped by 60%. Households cut back on heating needs, so every one of these aspects reduced the need for coal. And so as the economy crashed, so did coal, relatively speaking, right? Coal production dropped by 40% just from 1929 to 1932. And the backdrop of this, the human element, 300,000 plus miners lost their jobs. And for those that maintain their jobs, their wages were cut by over 30%. And there's one oral history of a miner that kind of notes, we go down into the mines knowing there might not be work tomorrow or next week. You could feel it in the air. Coal wasn't king anymore. So by 1931, the coal miner had become the symbol of industrial despair. And when this hits the coal towns, they kind of dissipate. So school shutdown stores go bankrupt. All the basic services disappear. This, this rippling effect across a coal town. And so, you know, the coal industry had already been struggling with price issues and a bit of overproduction because of the introduction of a competitor fuel called oil. Which we'll touch on. And you saw diesel engines starting to replace steam engines on the railroads. And electricity consumption is growing steadily. But utilities are kind of diversifying into some hydro power, maybe turning to oil. There's kind of the beginnings of this happening in the background. And then the depression hits. And it pushes the coal industry into a full blown crisis. So think of the depression not as the end of coal, but as the beginning of the end of coal's entire dominance over the American economy. Right. Coming out of the depression, a bunch of building out happens that includes the full complete electrification of America. It also includes these wide scale. Right. I think that Hoover Dam is massive hydro projects that make the experience for an individual in America consuming coal to really only be. Electricity. It only drives demand for coal as electricity demand drives. But it's not coal that people are buying. They're buying cold fruit in their fridge. They're buying light. And it just so happens that coal is the best way to do that at the moment, which puts coal in a long term precarious position. The other thing that we just saw is, you know, Roosevelt's 1933 new deal brings back into center a form of labor power. Right. And so this is a resurgence of the United Mine workers and that same man, John Lewis is now at the union's helm. And it was now once again the strongest union in the nation. So John Lewis is quite a figure. He broke a couple years later with the American Federation of Labor to launch the Congress of industrial organizations. So what's happening there is the AFL was more the craftsman's trade and the CIO. I think it was like more the big industrial trade. And he put the United Mine workers at the core of the CIO. And now we have the spike in labor and union power. Folks across industries started to join the CIO by the millions. And never in history was the labor movement as powerful as it was at this time. Lewis would fill stadiums with cheering supporters wherever he went. He was viewed as a hero. He was viewed as the nation's most powerful person after FDR. But as we'll get into with World War II on the horizon, what he did and how he naviated the war changed all of that. First of all, he started a sour on FDR and the new deal. Supposedly he wanted to join the president's ticket on in 1940 on the Democratic ticket and was rejected. And supposedly that may have pushed him against Roosevelt to become more supportive of the Republican leadership. But on election day, a lot of the members of course supported Roosevelt. And so he resigned as president of the CIO and only went on to continue leading the United Mine workers of America. And so during the war, perhaps because of this tip in 1943, he led a half a million coal miners on strike for better wages. No, not a reasonable thing to lead him on strike for better wages, but this is in the middle of war. He shut down the steel industry for two weeks at the height of the war. They need the steel to build tanks and ships and all the things. This I hope was a very calculated and strategic decision that paid off. Oh, yeah, of course. I mean, you could just imagine the public backlash. There's this cover of time magazine that shows his face looking like a volcano that's erupting. But he was just viewed as this angry person. So by 1949, he was viewed as one of the nation's most heated public figures for leading coal miners on strike during the war. The one place he remained very popular was the oil industry. They loved him. They said that with every coal strike, war of the US energy market went to oil. And so, you know, by the end to kind of post war, his whole power and the power of the unions of his union kind of spiral down crumbled. Yeah. But we kind of skipped over it. What was going on with coal in the war? Well, here we go. Now, you're mentally following along and we had approached the mid 1940s and center stages, fascism, and you're thinking back to World War One and how we make this point that coal was like the oxygen of the war, maybe an odd analogy, but you remember, coal was the central player for World War One for World War two. It was a backdrop player much more backstage and the reason for that is multi fold, but it still powered a lot of the war effort, right, industrial production, rail transport, steel manufacturing. It no longer was the primary fuel for mobility and combat. Here you have World War one. It's much more of a static naval war. It was the dominant naval fuel World War One was very much trench warfare as you had coal powering those logistics and the railroads and supplying the troops. The war was much less mechanized World War two. It was fast. It was oil driven. It was mechanized. It was fought in the skies with tanks and jeeps and it was enabled by this new amazing sexy fuel called oil. Germany didn't have nearly the oil supplies as the US and so it's other enemies and Soviet Union. And so once again, they turned to their chemical industry to try and figure out what to do. And one of the key things that sustained the war effort was that they turned into a war effort.
coal into oil through a process called coal liquefaction. And so that was actually pretty key for their strategy to be able to mitigate resource shortage of those during the war. And during World War II, most navies had transitioned to oil power chips, right? That gave them greater speed and range. It was easier to refuel. You didn't have to do the same shoveling of coal that you mentioned. The less smoke, so it was stealthy. So while coal was not the central player, it was this key input for Germany to try and maintain resources. That's right. So think of coal in World War II as still critical on the home front, powering industry rails and homes, just not that dominant driving the military tactics and the actual supply lines. And therefore, not the top strategic variable that drove the story of the war like it did in World War I. Meanwhile, in the Soviet Union, which was the key other side of the war, coal was similarly crucial to the industrialization. And in the Donbass region, which was under Ukraine, there's the major coal producing area, as well as in eastern Siberia. There's another big coal basin called the Kuznetzk basin as a major source. Very random aside, my wife's great grandfather lived in Novak Kuznetzk from the 1960s for a decade, helping work in supplying the coal industry there. My wife was born in the Soviet Union. So when I was sharing with my father-in-law some of these stories, they go, "Oh, well, you have a connection there." He's like, "Let me tell you about life in Siberia during this beer." And so the Trans-Siberian Railway was built to connect the rich mineral resources of Siberia to the Western Soviet Union. Ultimately, if you imagine the war playing out, you had energy coming from Siberia into the Western part of Russia to ultimately fight up against the German army. Heavy use of coal to power this industrialization that led into their might in World War II. And you know, the UK made a miscalculation on coal. They thought they had enough coal and enough people at the time of the war. So they drafted a bunch of the younger coal miners and sent them to fight, right? And the war, they needed soldiers. Oh, this is gutsy. Drawing on your bench that's fueling your economy to send them on the front lines. You know what? They quickly realized, "Oh, we need that coal." So what are we going to do? So then they had the genius idea of doing the opposite. So they said, "You know what we should do? Let's take of our drafts into the war. Let's take one out of every ten and send them into the mines." Just randomly send people into the mines? Yeah, I mean, they literally pulled names out of a hat to decide who would go into the mines. And this was the scheme of this minister of Bevin. And so these were called Bevin's Boys. There's a whole kind of story about them. But it's a system that turned out to be both wasteful and deeply unpopular, right? Exactly. The people in the mining community were like, "Why did you send my kids out to war?" And the people whose kids had studied to do something else and were now in the war were like, "Why are you sending me down in the mines?" They never worked out. Unfortunately, the Bevin's Boys were also mistreated. They were often mistakenly viewed as deserters. Sometimes they were locked up and thought that they were deserting when they actually, but this was like the job that they were assigned in the war. And during this time, with all this effort, productivity in the mines continued to ultimately decline. So in 1939, prewar, a little over 700,000 miners had dug out 230 million tons of coal. By 1945, about 700,000 miners only dug out 174 million tons. And so it was not the brightest of moments for coal mining in the UK. The war ends and within weeks of ending the war, Britain elected a very labor government. It had a new minister who was committed to the idea, finally, of nationalizing the mines. And this new labor government had bold, bold ambitions. They believed that the government should control the Bank of England, the steel industry, the hospitals, electricity generation, gas supply, road and rail networks, and all-town and country planning. This is a very pro-government labor movement. And this earnest beven of Beven's boys was one day standing at the urinal next to the editor from the Sunday Times and said, "This is it, Giles, the socialist dream, the means of production and the hands of the people." And so they formed the national coal board, which was to be the entity that would take control of the mines on behalf of the government. And so in 1946, they paid the landowners 81 million pounds or about $4 billion in today's values for compensation of coal left in the ground. You can tell it wasn't like the boomingness of industry, $4 billion for all the coal mines in the UK. So on New Year's Day, 1947, it officially changed hands and the national coal board was now running a thousand mines. They're also the owner of 140,000 houses, 85 brickworks and pipes, all the infrastructure around coal, right? And so they had great ambitions, but it did not go as planned. They continued essentially to have the conflict between the miners, unions and the national coal board. And the industry continued to decline, ultimately because it was harder and harder to get coal. And so by the time the government flipped, there wasn't even an attempt to denationalize it in 1955. Long-term coal was simply in decline in the UK. We don't do sponsors for this show, but there is occasionally organizations or material of interest that we want to point listeners to. And I think it would be a remiss for not spending a moment to call out the amazing work of the folks at our world and data. In this episode, you'll find us citing a lot of data on global coal use over time, emissions, happening in different countries. And that would not be possible without the incredible work of our world and data. We just lost ourselves searching through the repositories that they've built up and have so brilliantly laid out that we could consume and understand exactly what we want to do within seconds or minutes that would have otherwise taken us hours or days. Yeah. And that's a perspective for the amount of emissions of a given country and how much of that was coal and what's the electricity mix in that country and how do we grow food and how does that work? And we've mostly spent our time on the energy, electricity and fuel use, but that's just like one-fifth, I think of what they do. They also do one corner of what they do. That's right. Education and poverty and economics and development. It's going to be the underpinnings for a lot of this show fundamentally and a lot of the data we look at. One thing that's amazing is either reflect on our process is we used our world and data to understand what the narrative or thesis point was. We didn't go in seeking a piece of data in our world and that we actually went in with a question and we were able to search and let the data tell us what the answer was to how electricity or how emissions or how this country was fearing. And so it truly was a source where you can go with questions and have data answer them for you. Yeah. So if you haven't already, go to ourworldandata.org, poke around, lose yourself. If you're a fan of the show and enjoying this, you're probably someone that could spend a few hours just exploring all the amazing content they have there. And thank you to Hannah Richie and the team. Your newsletters are also fantastic. So sign up for those. All right. So we ended talking about the war and this industrial coal driven war on the industrial base, this oil driven war on the transportation base post war, though what is going on with the role that coal starting to play back at home? That's the big story, right? So coal went through this journey of being direct residential heat to powering railroads and ships and industrial manufacturing to then becoming the fuel for power plants. So if you recall, we went from 10% electrified to 75% in the 1920s to now we're in a postwar area where 90 plus percent of America has been has been electrified. And in 1945, coal accounts for approximately 50% of total energy use and the dominant use of coal outside of transportation and industry is electricity generation. We felt what it's like to burn coal in our house and we can see what it's like to burn it in the train engine. But what's coal's role as we're flipping on the switch and what's happening back there? Well, we thought it'd be fun to take a quick journey into a coal plant and make sure we understand how things work because from this point on post World War II onwards, the story in the West is a story of a coal being used in coal plants. And we watched all these amazing YouTube videos that we wish we could reenact here, but we're going to turn it into words. Let's imagine coal arrives into the plant in these massive train loads. We're talking hundreds of tons in each car and a single large plant can burn through an entire train's worth of coal in a day. So this coal's coming in continuously on these train loads. It gets unloaded onto a conveyor belt. Now these conveyor belts are moving coal at 4,000 tons per hour. Wow. We talked about what a ton is. One ton is the weight of a small compact car or a large adult cow. And 4,000 tons an hour is being moved on these conveyor belts. From here, it goes to pulverizers where giant steel rollers crush the coal into fine dust, think of like talcum powder, fine mist. Now why would you want to crush this coal? Well, fine coal burns hotter and more efficiently than chunky coal. And so these pulverizers are grinding coal at 250 tons per hour into
powder. So now you've got this pulverized coal and now we're going to convert chemical energy, which is the carbon in the coal from the plants of 400 million years ago into thermal energy. So the powdered coal is blown into a massive furnace, mixing it with air and it denites into this raging inferno. And we're talking temperatures inside of 2,500 degrees Fahrenheit. And whenever I mention some temperature, my son asks, well, is that hotter than lava? I can finally say yes, that is hotter than lava. Yeah, I was reading the description of this and it's a 200 foot plus high fireball that's kind of in sheep in this place. And they concern themselves with keeping this fireball blazing. And I was just imagining 200 feet, it's like a 15 to 20 story building height, size, sphere of fire that they're just maintaining. People talk about opening these things up and feeling like they're kind of staring at the sun. I mean, obviously they're not staring at the sun. The sun's much, much hotter. But like the feeling that you're like close with this kind of awe inspiring force, I think that's just an amazing thing to visualize given that it's completely human made via this process. Right. And it's not this beautiful, like kind of calm, gentle ball of fire. It's like it's raging. It's raging. It's chaotic. It's swirling ocean of fire, devouring coal and releasing incredible amount of heat energy. So this super heated air is absorbed into a network of pipes that surround the furnace. And these pipes are filled with water. And these water pipes, boilers are as tall as a 35 story building. Right. And so you've got these boilers that are heating the water to over 500 degrees Celsius inside the pipes and turning the water into steam. Now we're talking super heated, very high pressure steam building up inside a boiler. It's about 200 times the atmospheric pressure that we feel on earth. So imagine a giant pressure cooker, except this one is the size of a skyscraper and generates enough force to move a 200 ton turbine. And so now we're taking thermal energy and turning it into mechanical energy. This high pressure steam is released into the turbine. It's rotating this machine. Think of multiple blades of a jet engine that are rotating. The steam expands and pushes on the blades and it causes the turbine to spin at 3,000 RPMs, revolutions per minute. And so a single large turbine is as long as a school bus and it weighs hundreds of tons. And it's spinning at 3,000 revolutions. Imagine it running a school bus spinning that fast. Exactly. At the precision of a watch, it's so large and it's it's so precise at the same time. While now this motion is what drives the generator converting mechanical energy into electricity. Thanks, Faraday. Hankerbite to Benz Physics 101. And so you've got this spinning turbine spinning school bus at 3,000 rotations a minute connected to a generator where massive electromagnet is spinning inside thousands of copper wires, copper coils of wire. And so this then creates an electric current at 20,000 volts, which is then stepped up to be ready for grid transmission at 275,000 volts. And so once the steam has done its job of moving the turbine and the turbine has moved the generator so the magnet and the copper coils have moved and created electricity. Now it must be cooled back into water and reused. And so now you've got these cooling towers, which are the big images that you see when you drive by a coal plant. It's these huge 400 foot cooling towers releasing plumes of steam. Not smoke steam into the sky. A typical 500 megawatt plant consumes water for cooling towers equivalent to filling an Olympic size pool every 90 minutes. And so that's what's happening inside these massive, massive structures. One thing I didn't appreciate is that getting a coal plant of that size, turning it on and off is actually quite hard because of this kind of amount of rotational mass in turbines. And so on one hand, that's actually very good for grid stability. It's not like they're going to fluctuate that much and they have obviously deep controls on how much steam to release and give it time to keep the rate of spitting. Correct? On the other hand, it's not like you can toggle them on and off, right? Like you could disconnect a switch. And so it's an interesting way in which like there's literal physical inertia to the grid that is providing that stable power, right, which plays into what you're using for base load and what you're using for peaker load that then affects electricity prices and everything else downstream. Absolutely. The byproduct of this is not just the steam. That would be great. But as we know, coal is a credibly imitive. So you've got fly ash and bottom ash. That's non-burnable material left behind that gets collected and stored. You've got sulfur dioxide, nitrous dioxide, and all these chemicals that are being released and filtered out using scrubbers. And then of course, you've got carbon dioxide. Coal is as contributed the most to the situation we find ourselves in today. Maybe this is a good time to talk a little about the sulfur dioxide. The sulfur dioxide caused acid rain, right? So for a long time, sulfur was the primary issue around coal mines. It was discussed causing you know, easy skies. And then it would rain and the reaction in rain would cause acid rain, which would cause lakes to become these clear, beautiful lakes where nothing could live. There's a realization, I think from burning coal in the early times in Britain, there are parts of Sweden where people with light hair, their hair would start to turn green. And they linked it all back to the sulfur emissions from coal. So since kind of early 90s acid rain disappeared from public view because they figured out how to cut sulfur out of the coal process so much, either those via scrubbers, which I think you just mentioned, which is the idea that you actually have a chemical reaction to catch the sulfur dioxide in the plant. And you actually fill these insane large trash bags filled with a solidified capture of sulfur dioxide, or you find low sulfur coal of which, you know, the whole eastern US is higher sulfur coal, but Wyoming, the younger coal happens to be lower sulfur coal. And so that creates a future boom in those regions. And we'll take a trip to Wyoming later on. We will. And so these coal plants, an average 500 megawatt coal plant that's producing all of this power steam sulfur dioxide, carbon dioxide. It's used all over America. Each plant can power half a million homes 24, 7, 3, 65. And as Ben mentioned, we're not turning these things on and off. So it's just it's running that base lit power. And to give you sense, these plants are operating early plants are operating about 33% efficiency. So two thirds of the energy created is wasted as heat in these talk in 1950s, 1960s period. So that's the journey into the coal plant. Feel free to YouTube search vivid images and videos of what the regime. I want to go to one. If we if we get an opportunity, the last one in Washington, the same trail, yeah, coal plant, I think, has only around for another. Oh, yeah, it's for months. Maybe I don't know. Maybe we'll make a day trip out of it sometime. And so that coal plant is powering America. And so, you know, think pre-World War II, 1920s, railroads consumed about 90% of all coal that was mined in the US and steam ships were powered by coal and homes had coal furnaces fast forward to post electrification and coal is now powering electricity of the 1940s, 50s and 60s. And the important point to remember as we go into this next chapter of American history is that coal's relative share of US energy use and electricity production falls in 1945 coal accounted for 50% of total US energy use. And by 1965, it had dropped to 18% of total energy use. Wow. So we burning less coal? We're not burning less coal. That's the rub here. What we're doing is we're burning more coal, but you have new fuels coming in. Oil is starting to fuel transportation and heating. Natural gas is growing to fuel industrial processes and heating. This is the 50s and 60s when per capita energy consumption is just exploding. And that means more coal, but also more all this other energy. Exactly. So in the context, we were just talking about coal plants. Coal fired power plants in 1945 were supplying 70% of electricity. And by 1965, it struck to 50% of electricity. And so to this point, there was a relative decline in how much coal was being used in energy and electricity. But coal production grew by 40% from 500 million tons to 700 million tons. Oh wow. And I think it continued to grow until 2007. When we finally hit peak coal production consumption in the US. So so as by no means a time you're dropping now along the way, as we've said, it's relevance and in centralness to the energy mix that had certainly kind of wax and wain. What was the main thing? It was up against. Well, we'll see this theme play out again into 2000s, but you have other forces that move very quickly towards cheaper fuel. So during this period, both natural gas and oil were cheap compared to coal, which contributed to their rapid adoption across transportation, electricity and heating. So for natural gas, it was a bit unusual. Natural gas prices were actually regulated under a natural gas act of 1938 that kept those prices artificially low through federal controls. But alongside that, you had this rapid expansion of gas pipelines after World War II. And so now you make gas much more accessible and adoption into heating and electricity grows. Simultaneously, crude oil prices are fairly stable at this time. We've got a fairly abundant supply of oil. The US is still a major
oil producer and largely self-sufficient. And so in the 1950s, the average price of crude was about $2.77, which is translates to about $33 a barrel. Versus today, crude oil price is about $70 a barrel. So they're less than half the price. And diesel starts to replace coal in locomotives, which eliminates coal from transportation. There's a whole another episode we need to do on oil. We'll only mention it a little bit more during the energy crisis. But suffice say that we'll leave the 1960s US with coal enduring as a producer of US electricity, relatively lower than its peak dominance, pre-World War II, but absolutely still growing in terms of how much tons are being produced and used. Yeah, so we've gone US, UK, Germany, Russia, we've talked about Europe and all this stuff. Well, it's time we go to China. We knew we had to get there sometime. It is time. It is time to get to, you know, early the point of this whole thing. And so if you remember in part one, we talked about early in China, when Marco Polo visited China, there were all kinds of ways much China was ahead in using coal to produce iron and drive heating across their early cities. And what happened during the 1800s is foreigners essentially were able to come in after the Opie of War 1842 and exploit China's resources. Right. And so they developed coal dependent industries and treaty ports like Shanghai in order to kind of run Western operations that needed coal. There's a counter movement led by Li Hongsheng in the 1860s called the self-strengthening movement. And this was a goal of kind of like trying to build up some domestic industry, some domestic strength. And so he led this project to develop the Kaiping mines. And there's a lot of cultural resistance domestically to actually mining. The view of a sort was to focus on agriculture as the way of development and not mining. But Li was able to get through that and developed in secret also a locomotive in 1882 called the Chinese rocket modeled after the Stevenson rocket back in the UK that we had spent a lot of time on last time around. But he hit financial struggles. And so the Kaiping mines sought British support. And our company came in and in fact a young Herbert Hoover played a key role in maneuvering to place the mine under British control, which actually had the opposite goal of this whole goal of self-strengthening. Well, it's not self-strengthening for the Chinese. If the British are controlling this whole exemplary mine, right. And so that was viewed as a big betrayal to have this lack of sovereignty and the view of internal weakness to have foreign takeover. By their early 20th century industrialization had started to become synonymous with exploitation. There's this real anti-industrialization anti-western movement. And that started to fuel this national movement. This disillusionment started to lay the foundation for a counter force. So I'd say a revolution. A revolution indeed. And we're going to introduce ourselves to another household name, which has a fun personal coal link himself. And that is Mr. Mao Zedong. The first national Congress of the Chinese Communist Party happened in 1921 in Shanghai. One of the outcomes of this Congress is that party members decided to target groups of industrial workers and set up schools and classes and provide free education and instruction on socialist values. So you've got a young Mao Zedong leaving this conference in Shanghai and returning to his hometown and then continuing to travel a little bit further through Jiangxi Province, looking for ways to help and organize workers. And he travels to a town which has a fairly large coal mine and a developed railroad, employing about 10,000 workers. And he just so happens to have a distant relative to stay there, with whom he supervises the mine operations. This relative introduces him to some of the miners, and he strikes up a rapport with them. Mao gains their interest in part by asking if they'd made a 10 school if they were free. At this time, there's only one school for children of managers. It's kind of a privileged access. These workers are excited by the prospect. The Workers Club begins to recruit more and more railroad workers and coal miners into this organization. So Mao leaves and he kind of keeps up developments from afar and intervenes occasionally. Until later the next year, he actually instructs his school leader to call for a strike. And the strike lasts for five days, asking for higher wages, better treatment and fundamental dignity. And it was successful. The small coal strike was actually successful. Wow. Yeah. These striking coal miners, they got everything they asked for. There was an orderly work stoppage. It's the opposite of what was going on in the UK. Completely not. We just talked about it. It was just like the guns come out. The workers don't get anything, which maybe echoes to how things unfolded so differently politically over the next. That's right. In the US, it led to the temporary downfall of the United Mindworkers. And here it was hailed as one of the first major victories of the Chinese Communist Party and became a model for how they wanted to progress. As the Cultural Revolution starts, there's a lot of propaganda. There's one of more famous posters that has Mao walking around in these long flowing blue scholarly robes striding over mountains as these organizing coal miners. The birth of Mao as an organizing leader is very intimately tied to the strike that he'd led with the coal miners and the relationship that he had with coal. So a lot happens over the next 25 years. That's really less relevant to the coal story. But broadly speaking, just know that there was rising nationalism and frustration with foreign control that led the CCP to gain power in rural populations. A civil war breaks out throughout the 1930s and 40s. It overlaps with World War Two, which had Japan and China fighting. The Japanese take over northeastern China and begin ruling it as a colony. And they called it "Mensuria." Exactly. Northeastern China called "Mensuria." Now, the Japanese went to Mensuria primarily for the resources, particularly coal, to fuel their industrialization. And they actually set up more mines and railroads and developed industries such that even after the devastation of World War Two and the civil war that breaks out between the communists and the nationalist, Northeastern China remains one of the most industrialized parts of China coming out of all of this. And so fast forward, the nationalist party flees to Taiwan. The Communist Party takes over in 1949, led by Mao Zedong. And the Chinese Communist Party begins their first of many five-year plans to plan the economy. Yes, I mean, if you look at their movement inspired by the Bolsheviks, I think they also looked at industrialization and were inspired by Soviet projects there as well. They used Soviet funds and expertise to help build up industry and try and figure out how to educate alongside socialist ideals in science and engineering and coal mining. And so most of the investment flows that area of Northeastern China where the coal mines and industry were already developed. But then Mao kicks off the Great Leap Forward in the summer of 1958. The biggest, most ambitious, experiment in human mobilization history. Experiment is a key word there. The goal was really an industrial goal. It said, we want to surpass Great Britain's production levels. We want to tap our vast population and turn it into the most productive population possible. We want to essentially outdo the industrial revolution. That's quite the stage. Interestingly enough, this desire to outdo the industrial revolution came at a very different strategic decision. Rather than centralizing manufacturing and building industrial bases, the CCP decided to go in the opposite direction and create communes that were designed to be self-sufficient. They had as many different kinds of production as possible, decentralized across all of China. And coal, of course, is at the center of that production. So remember, we're not too far from what is industrialization, whilst the ability to build steel and have electricity and all these things. So the question was, how could you turn this agricultural rural population into people who are making steel? That's basically what they asked them to do to dig in their backyard fine coal and set up a steel furnace in their backyard. Which led to crazy things. You have these brick furnaces on these communes that they're trying to make steel. Maybe for a competing steel from 150 years ago, it might be a relevant approach. But when you're trying to actually make viable steel, and you're asking the entire population to come in and produce this, it simply didn't work. I mean, to put numbers on this, as many as 100 million Chinese, which is at the time twice the entire population of Great Britain, were working to produce steel, tending an estimate one to two million of these little backyard furnaces, some of them built in a few hours. And so by the end of 1958, some 100,000 coal pits were in operation, where 20 million peasants were mining coal. Absolutely, astronomically insane numbers. And it didn't work. The steel that was produced was called cattle droppings. And you can still, you go around these old school yards today and there's little chunks of, and hunks of steel that were never used for anything. They just ended up being junk metal. And, you know, in the end of this, Mao later admitted that he had failed to protect how it wouldn't work. And it would overload the rail system and was like, just not the way for this type of good to be produced. I think, you know, they were coming off of this agricultural production, which actually you do want to do in this decentralized landway and trying to apply it to coal and steel, which either has geographic centralization due to where the coal seams are or the benefits of actually, like scale, right? The whole point of
the best amount of process in these improved processes over time are these ones of central scale. That's right. Unfortunately for the CCP and for the Great Leap Forward, there was no debate to Mao's decision because he held such incredible sway and power. This is kind of how the Great Leap Forward and the Cultural Revolution played out at the most cursory level without going into too much detail. And the worst part about this is not the waste of energy and the waste of even human labor is the fact that when all these people went to go dig and try and make steel, they weren't doing something else, which is what they were doing before, which was largely farming. And so the farms are left unstaffed. They're making steel and there ends up being mass, mass, food shortages. And so the Great Leap Forward is linked to an estimated 30 to 55 million deaths, making it the policy they contribute to the most human death ever. A lot of lessons learned from that and coming out of that, China was suffering also still from a long-term energy crisis. All this attempted coal mining and effort didn't actually produce much coal that they could use to heat their homes or cook food. The average peasant had 20% less energy than minimum daily requirements at the time. There was two little food to cook even one meal a day. And so this started to create the context for which the next incoming government would be open to some foreign technology to help them be able to get more energy out of the ground. And so they undid these policies and began shifting the industry back to the coal regions of the north where there were, in fact, coal seams. They moved workers to the coal so that they could actually be successful and be in closing some of these tens of thousands of inefficient mines. By the time there's the fourth five-year plan, which I think was 1971 to 1975, you can start to see just the steady march upward of successful extraction of coal. And so they targeted 400 million tons of coal at the time. And they hit the number plus like 10 percent. I mean, it was a while to see this growth. They overshot their stretch coal. That's right. They overshot the OKR. And so for context, at this point, in the mid-70s, they're about halfway US coal production consumption levels. Obviously, with a much larger population, but nonetheless, they're making your, your progress in energy and food and everything else. This is the pair of ways they start to catch up incredibly quickly. That's right. It's more and more of this. And so Ding Xiaoping is who followed Mao. And he was much more nuanced in kind of accepting Western technology and collaboration. And so during the time between 1977 and 1997, that 20-year stretch per capita income quadrupled. And they started to allow various moments of open market, sale of coal and energy and agriculture. And so his economic reforms really unlocked the next boom in coal mining. There was actually an emergence still of small scale mines in the 80s. And many of these were not particularly safe and/or well run, but they were successful. They contributed a lot to national open. So they'd leveraged large, large labor populations to get coal out and started to really power the boom of the 80s. And you just had this flywheel, right? A massive domestic energy demand. These shifts continued through the 80s and by I think the year is 1983, 1984, China passes the US for the number one user of coal. What a catch up. This boom just continued. And electricity plans are being built to power manufacturing and on and on. And Xiao Ping continues to urge coal companies to merge until larger and larger enterprises. And it starts to echo corporate structure wise what we've seen in the West. You know, we have these large utilities, large coal mining companies, large powerful folks that start to control prices and improve profitability. And so the market really does start to mature. And so by the year 2000, China is the consumer of 30% of the coal in the world. And that's 30% more coal than the second biggest user at the time, which is in the US. This is far and away the last time that any country is anywhere near China's usage, right? After this point, the divergence between the US or anywhere else in the world and China just splinters. If you're imagining an S curve, China does exactly that through the 60s and 70s and 80s. It's kind of climbing that curve and it just takes off. We'll see the escape velocity point in 2002, 2003, but already by the 80s and 90s, they're the world's leader dominant. Meanwhile, in the 70s, some other energy wobbly ins are happening around the world. That's right. So back in the US in the 1970s, coal is no longer the dominant energy source that it had been in the early 20th century. Oil and natural gas had replaced coal for home heating and transportation and it was starting to gain ground on power generation. Many assume that coal's best days were behind. This is the beginning of the end of coal. Then comes the 1973 energy crisis, which changed everything once again. The energy crisis exposed America's dependence on foreign oil and forced the country to reconsider its energy strategy and think about energy national security. What was the energy crisis? Very quickly, October 1973, a coalition of the oil producing states, OPEC, imposes an oil embargo on the United States and other Western nations in retaliation for the US support of Israel during the Yam Kapoor War. The OPEC nations coordinate a series of steep oil production cuts and massive price hikes. Almost overnight, oil prices quadruple from $3 a barrel to $12 a barrel. What does this mean? This means gas stations run out of fuel. People are waiting in line for hours, sometimes just to find gas gone. At this point, the US is importing over 35% of its energy needs. Electricity prices soar and many power plants that had switched from coal to oil and natural gas over the previous two decades have a bit of a reckoning. There's this realization that America needs to reduce its dependence on foreign oil, which is a very familiar policy position across both parties for the last number of decades. Yeah, I feel like until you really sit with this, you realize, prior to this, I don't think that was a deep concept. There was just the market consideration of well, we should use the energy that is cheapest for us to use to do the thing we're trying to do, somewhat absent any other strategic considerations. I feel like we've grown our entire life in this era of this other consideration of national security risk or foreign energy independence or whatever however you want to frame it. That's right. And war is fought for oil and fuel and energy needs. This is coal's come back and it's ready. Coal is still abundant, it's cheap and coal-fired power plants or technology that we understand. The alternatives around nuclear are still developing. And so 1973, President Nixon announces project independence, a plan to eliminate US dependence on foreign energy and coal is at the center of this plan. So the government starts to push utilities to switch back from oil to coal for electricity generation. New coal mines start to get open, new coal-file power plants are expanded. And this is the first major reversal in a multi-decade long decline of coal. And so between 1973 and 1980, US coal production surges by 40% as utilities transition back to coal. And it's wild for all these other reasons we'll get into. Coal is the inferior fuel technically to oil and gas. Like imagine being on coal, you're like, no, you got to go back to wood. It's less efficient. It's harder to transport. That's right. But by the late 1970s, early 80s, coal is back, baby. It's in full force and it's powering over 50% of US electricity again. Now, another parallel factor to the energy crisis, which really kind of cements coal's resurgence to bring it back over 50% of energy production is the meltdown of three mile island. So a few years later from the energy crisis, 1979, there was a partial meltdown at three mile island, which is a nuclear power plant in Pennsylvania. Now, no one died, but it was deemed the worst accident in US commercial nuclear power history. Before that accident, nuclear power was seen as this future of clean, reliable energy. It was really kind of penetrated the American consciousness and American policy. But the accident happened. And it really set off anti nuclear safety concerns amongst the general public. And it led to a ton of new regulations for the nuclear industry. And so this really accelerated the slowdown of building new reactors. The accident didn't initiate the demise of the nuclear power industry, but it did kind of halt its growth, which had been on a rapid pace. A little fun fact, like if you're not following the news, Microsoft now has an agreement to restart the nuclear power plant in three mile island, trying to get it back in service by 2020, because there's some data centers that need power. And so with nuclear sideline, utilities lean even more heavily on coal to meet this growing electricity demand. So you've got this confluence of factors to bring back coal as the dominant energy source in the country and enable it to be continuously burned until it hits another shock in the 2000s. Now, one final interesting storyline that has benefited coal is what we're talking about around national energy policy. Before 1973, western government saw energy, and especially oil as an economic issue, right? By what's cheap and available? And after the energy crisis, it became clear that energy supply was a strict. strategic vulnerability of Western nations. And so for the first time, energy supply is used deliberately as a geopolitical weapon, not just as a commodity issue with OPEC's decisions. And the effects of this ripple across the world to all oil importing nations like the US, in Europe, and Japan. As a result, countries start to diversify their energy resources. We introduced the Strategic Petroleum Reserve for the first time. We established the International Energy Agency to coordinate response amongst industrialized nations. And it's just this different way we think about energy. It's a global political and public consciousness shift. And overall, the series of crises kind of breathe new life into coal, especially in countries like the US and Australia as a domestic, reliable alternative to imported oil. And let us not forget, we buy divine mandate or by the randomness of continents. We have a lot of coal in this country. And there is an explosion of realization in particular that we have a lot of coal in the Western coal fields, right? And Wyoming. The Wyoming Secretary of State, back in 1902, said, coal, Wyoming has enough to run the forges of Vulcan, weld every tie that binds, drive every wheel, and change the North Pole into a tropical region or to smelt all hell. Wow. Depends on your time horizons. Climate change is a kind of correct. But this area in the West, in Wyoming's coal field called the Powder River Basin is immense. And it quickly becomes over the following years, by the mid 2000s, it's 40% of all coal burned in America or about 400 million tons a year is mined in the Powder River Basin. Now, one thing that's unique is what's going on as well is the technological shift in how we mine. We've spent a lot of time talking about digging these deep mine shafts underground, fighting the water to get the water out, bringing the coal up and how kids were sent down to bring the coal up and all of the ways that we thought about coal mining. Well, that's only the way you have to do it if you want to dig for coal. The other thing we can do is move mountains, literally move mountains, right? And so that is what's known as strip mining or mountaintop removal, where basically the behavior shifted to instead really start moving the dirt away and exposing the coal. And a mountaintop removal of mining, what you're often doing is you're setting off explosives to loosen the top of the mountain and then you're pushing the dirt away. At 1.70% of the 2.5 million tons of industrial explosives that are detonated in America each year is used for mountaintop removal. There's a point when Russian scientists were picking up suspicious tremors on their seismographs, you know, they're to detect earthquakes. And they call the units, they say, are you testing nuclear weapons in Wyoming? And they said, no, we're just mining for coal, right? 'Cause there's so much explosive energy to move dirt around. And so this becomes a lot more effective. Mining actually gets a lot safer because you're no longer sending people underground. You're just driving these big trucks. There's this image of, you know, the dirty coal miner while people could work on these Wyoming mines and they would just hop in a fancy large excavator and in their clean clothes and drive it around all day, pushing tons and tons of dirt around. And then the next vehicle would come in and scoop up the coal and ship it out. You wouldn't get a speck of coal dust on you. - Yeah, it reminds me of the interview on John Oliver's coal episode where the coal miners talk about how with mechanization and strip mining, 12 to 14 workers can basically complete an entire mountaintop removal project. - Wow. And so the scale of this is immense. I think probably the biggest machines that we've made, transportation machines that we've made are probably I think the ones that are used in strip mining. - I can't imagine anything bigger. - Yeah, these are these trucks with the wheels where it's, you know, a person has like a third of the height of the wheel type vehicles. The other side of this is that the local environmental and ecological impacts are immense. You're literally chopping down mountains. And yes, a law was passed that you're supposed to fix the mountain after you're done and replenish it, which functionally means they were like spray this like seed on it and kind of be done with it. And so there's story after story of like beautiful regions of the Appalachians and otherwise, they're just like decimated through this type of coal mining. It's been a war ground for conservation activists for a long time. In fact, there's a big issue where they would push the waste into valleys and they would cause these like massive floods. And so under a conservative administration, the deputy secretary of the US Department of Interior, who of course was a former coal industry lobbyist, was able to get debris from mountaintop removal reclassified from waste to acceptable fill, which meant even if it was leaching, you know, acids and heavy metals and polluting the streams, it was just acceptable fill. - Just the cost of doing business. - Pretty horrifying practices. But very effective. And so you see this powers the coal boom into the 2000s. And powers the growth of, you know, railroads that are moving the coal. As we've long established, railroads love coal. It's this high volume low-hastle business. There's not people getting on and off. There's no food, you got to transport around. It's just moving coal back and forth from the mine to the power plant. From the mine to the power plant. And the power plants are just voraciously endlessly hungry. The mines in the US are just increasingly efficient, scraping the mountains away and getting down to the coal. - That's right, that's right. So you've got different denominators in terms of how you measure, pick your favorite one. But according to certain estimated recoverable reserves based on 2022 production, the US has over 420 years of coal. - Right. And this has been a bit of a talking point of the coal industry. - That's right. - Back to the set up of this time period, right? There's this desire for coal to be viewed as the most domestic of sources. You can't take it from us. It's down on our ground. It's there by our divide right. And it's our most secure source of energy. That would hold up if there weren't other domestic sources that we'll get into. - That's right. And it would hold up if there weren't externalities to a burning coal that actually have a consequence to economic life, public health, and our planet. - That's right. And to that point, kind of going through this time period of coal use expansion in the US, you know, in the late 80s, the EPA starts kind of looking towards issues of coal smoke. We already talked about acid rain, but the other issue is just the actual particulate pollutant, which is PM 10, which is the 10 micron, and then eventually PM 2.5, which is the smaller and smaller particulates that actually cause issues. And people starting to study this, started to try and raise the alarm bell saying that we see more people, again, the late 80s, dying of particulate air pollution that are dying of AIDS. So there's a set of people kind of within the EPA, trying to draw attention to this, trying to draw regulation to it, of course, and men's pushback and very little does get done to actually regulate the smaller and smaller particulate. And the biggest problem with all of this is that the finer and finer the particulate is, the more of a health crisis it causes, and the less measurable it is, and the harder it is to enforce, a fairly challenging issue to ever take on. But we had greater understanding across the political spectrum that this was an issue to take on, right? That's right. And same goes with climate. Going into the 80s, the drum beat of concern about global warming was growing, and it was actually like a fairly bipartisan issue at the time. And so you had a Bush senior campaigning. He was asked about, well, what are you gonna do about global warming and the greenhouse gas effect? And Bush said, those who think we are powerless to do anything about the greenhouse gas effect, forget about the white house effect. As president, I intend to do something about it. This was Bush senior. - Amazing. Too bad he didn't fall through. - He did not fall through. And so the 90s become the ground zero for the campaign, essentially the disinformation campaign against global warming. And so in 1991, 35% of respondents that they were a great deal about global warming, by the end of 1997, it had dropped to nearly 20%. And so public concern about global warming shrink over the 90s. And so there's this positive progress by the coal industry, largely in driving the conversation away. Of course, some of the largest coal companies in the US were very much behind this and very much behind kind of a philosophy around this. So the largest coal company at the time called Peabody Energy, it's the world's largest coal company. And in the early 90s, one of the senior execs was pushing the narrative that increasing levels of carbon dioxide would lead to a greener and more productive world. This is plant food. It's gonna make it the plant more green. In fact, he said fossil fuels are quite literally a gift from God. It is easy to conclude under a preordained plan that coal and oil lay in wait for exploration by humans to permit our creation of an environment on Earth conducive to the spectacular success of our species. Why would the world have so much coal if we aren't meant to burn it? - Effective. - Talking points. - You're right. - And another well-known co-operator, our friend Bob Murray in 1998. - He's not really a friend. He's just an eccentric guy who's all over YouTube talking about coal. - Yeah, if you wanna see some crazy co-exact stuff, search Bob Murray, he's-- - Prolific. - Round zero, prolific. Oh man, I mean, there's a John Oliver episode where he spends a good third of it on Bob Murray. Highly recommend watching. We'll link to it in the show notes of just how this man operates. But the US was starting to look at the Kyoto protocols and negotiating those. And so this is when Murray and Peabody basically said, oh, the US is gonna lose 3.2% of GDP if we actually implement the Kyoto protocol. And,
Peabody Energy, again, said 19% of GDP would be at risk in 2010 if we actually tried to regulate out coal from our power plant emissions. And so this whole area, you also then have the Bush Cheney administration coming in, and Cheney is a big friend of the fossil fuel industry across the board. It just sets the stage for a coal bananza, or some called the coal rush of 2005 to 2007. And so the boom was on Peabody Energy goes public under the Stocktaker BTU, just stands for British Thermal Units. It was not just the biggest coal company in the world at this point, it was also the richest. You start to see some of the execs cash out 2005, 2006. And there's this perverse incentive because there was this background tone that, hey, regulation, I mean, obviously Bush Cheney wasn't going to regulate you, but it might be around the corner. And so in that model, there's this incentive to try and build out as quickly as you can, as many power plants as you can. Because once you build them out, they're very locked in, right? They're powering the grid. In order to turn them off, you have to raise that electricity prices. So you're now in this motion of large coal infrastructure. And so coal was definitely the king of the grid. There are over 1,000 coal-fired power plants providing power over half of the electricity generation in the year 2000. The average American consumed 20 pounds of coal a day for context. So it was just an immense part of our energy budget. This backdrop of Bob Murray just mouthing off as coal is still king is perfect for the other storylines that are actually running through the US economy during this coal rush. So at this moment, around 2005, you've got more than 120 new coal plants representing a hundred billion dollars of new investment. And another 150 under plan to be constructed. These are billion dollar plus projects. Coals just flying hot at this moment. Fills like nothing could stop it. Now, not everyone was excited about us building more coal plants in the US with everything we understood. That's right. And so now you've got a couple unlikely forces that are going to hit king coal with a one two punch and send it staggering backwards. The first is that a Zestance, this movement known as beyond coal led by the Sierra Club made up of local activists, national environmental groups, lawyer, scientist, community organizers. And so we're talking about early 2000s. The same time as this coal rush is happening and king coal is looking real strong. You've got this movement within the grassroots networks that a coal essence around the understanding that this amount of carbon being admitted from these new coal plants will continue for decades and decades to come. And it is simply unacceptable. Right. And so you've got the 2000s and climate changes becoming much more understood and galvanized this resistance movement. And so environmental groups that previously had worked on other issues, conservation, air quality, water quality, they started to collaborate and bind together to stop the coal rush. And they were helped by foundations that understood the scale of the threat and created a real coordinated response. It's fascinating. They operated this hyper local strategies like think nationally, fight locally as their operating principle. Every coal plant that was proposed was treated as this local fight. And they brought together a diverse array of weaponry, coordinated legal action using the Clean Air Act. And there were strategic partnerships between conservationists, faith groups, public health organizers. You've got a changing of the narrative around health impacts and the economic downsides. You've got a divestment movement led by groups like 350.org to pressure universities and pension funds to pull money out of coal. You've got this this full range of voices coming forward, including a grassroots uprising called Appalachia Rising, which brought Appalachian residents to the national stage, miners, family, students who spoke out about the devastating impacts of coal mining on their community. And at the time, it was not an overstatement to say that this was the most successful climate campaign in US history. Yeah, I mean, you build one of these plants. They're going to be operating for 20, 30 plus years, burning tons and tons of coal. I think it was very wise of this movement to realize that you have to stop them before they go up. The same way that the industry is realizing, we have to build them before the regulation comes in. And so this plays an interesting difference between regulation and activism and how does activism was able to use past tools to slow things down. That's right. And so to give you a sense of their success by the end of the 2010s, over 200 proposed coal plants had been defeated or canceled. Wow. And the movement had contributed to the retirement of another 350 existing coal plants. To the surprise of many, this activist resistance won four fifths of proposed coal plants were blocked or canceled. And it set this trend around talking about the closure of coal plants, rather than the opening of new coal plants. Right. And you would you'd think that this would be then the stage for which we could actually like push big climate regulation. Oh, you would think. Right. You would think. But I think, you know, we were coming out of, you know, Al Gore's and in to me, in truth is 2006 2007. There's a big IPCC report that says global warming is now on equivocal. So you get into 2008, two dozen states that already passed renewable energy standards to push utilities forward. And so there was a climate bill known as the Waxman market bill that passed a floor vote in 2009. And of course, Bob Murray, Peabody Energy, everyone's pushing against this. This is when you get a lot of public talking points against how this is going to hurt consumers. How this is going to make electricity more expensive. Well, the great financial crisis was not the political moment then to do anything that could even be perceived as hurting consumer prices. It required short term economic, you know, stops the bleeding action, not long term, fixed the climate action. So it didn't end up passing. So regulation wasn't going to stop coal. What could? So the resistance had a big impact. If the resistance was the jab, now you've got the hook, the body shots and the upper cut that comes from the market. Right. And so enter the world of fracking and cheap natural gas. This is the other major storyline of the early 2000s that is going to send coal staggering backwards. So in 2005, Congress passes the Energy Policy Act with a so-called Haliburton loophole that exempted fracking from parts of the Safe Drinking Water Act and reduced regulatory barriers. So we say that you need to make sure that water is safe to drink unless you're trying to get gas out then it's okay. Then it's not waste. It's just fill, right? Oh my god. And then from 2006 to 2008, you get the production of fracking on multiple shales that start to see some benefits. So this is the technology of fracking starts to produce. Natural gas prices had been high and so it makes the the shale projects more attractive, right? If they can crack this, then there's there's there's a lot of economic value here. And so in 2008, just to give you context, gas production from fracking shale formations hits a tipping point, right? So before this, shale was about 5% of US national gas. By 2015, it was over 50% of US natural gas. Right? So the shale gas boom unlocked this massive set of reserves of cheap cleaner burning natural gas. And so, okay, let's talk about what is fracking? Just a little a little sidebar here. Fracking is short for hydraulic fracturing, which is a drilling technique that allows a producer to extract more natural gas from deep underground shale rock formations. So you drill one to two miles underground into rock layers. You inject high pressure mix of water, sand and chemicals to start cracking the rock and it releases trap natural gas, which then flows to the surface. And so before fracking, these deep shale gas reserves were known, but they were inaccessible. They were economically unviable, but with this technology and where the energy markets were, the ability to unlock this just created a boom town. And so what happened? Natural gas prices fall by over 55% between 2007 and 2012 just due to hydraulic fracking and horizontal drilling. And this makes gas more economical than coal. Right? So utilities begin switching from coal to gas, not for environmental reasons, but for economic reasons. Natural gas prices plummet undercutting coal's cost advantage. And in 2015, natural gas surpasses coal as the leading source of electricity in the United States. Wow. I mean, all this happened so 10 years ago, like 10 years ago, this happened 10 years ago, coal was the leading source of electricity in the United States and gas to come. This is also recent. That's right. So in 2008, coal was 50% of electricity and gas was 21%. And then seven years later, they were 30, 30. And natural gas takes over. Wow. This is the uppercut that just sends king coal stumbling down, right? In 2007, there were still over 150 proposed new coal plants at various stages. And by 2012, that number dropped from 150 to 15. Now the utilities are pushing these combined cycle gas plants, which are twice as efficient as coal and can be built in almost half the time. We should acknowledge that wind generation is also surging here.
and later on we'll see solar. And so there's state level renewable energy policy and declining costs that do put renewables on the map, but it hails and compares to the impact of gas. - Yeah. One thing I was trying to understand is like, what makes gas physically, potentially, a better fuel, right? Were you interested as a physics nerd out? - Yeah, I just had to do another physics nerd out. I think there's the mining side, right? You know, perhaps we've started to get to some of the easier to mine coal, even with strip mining, as gets harder and harder and harder and more expensive to mine. And gas, like maybe this fracking technology makes it faster to get energy out of the ground. But why is it like, is it more energy dense? Like what's going on here? And it turns out it is, right? So even if you have a piece of anthricite coal, which is the most energy dense chunk of coal, it's essentially a brick of carbon. And you light the carbon on fire. What are you doing? You're combusting carbon with oxygen and you're getting CO2 and energy. Like you pretty much directly go from carbon anthricite to carbon dioxide and energy. Now on the flip side, when you're combusting gas, gas is really mostly methane. That's the main thing you're combusting. And methane is CH4. And so the dominant reaction, yes, there is a, in the CH4, there's a C that you're combusting that's gonna become a carbon dioxide. But there's also this H4, these four hydrogens. And so a lot of the combustive energy is actually from the hydrogen. So it's actually a light atom that gives you a lot of energy. And ultimately as well, less carbon emissions per unit energy. And so if you look at the CO2 emissions per gigajoule of fuel, you end up with natural gas being almost half the emissions to get to the same amount of energy. And then it's also about twice as dense. That is a big benefit. Not to mention the physical kind of practical attributes of transportation. You can't put coal through a pipeline. That's right. Now you can turn into coal gas, which basically gives you the methane and then you have the coke. So you still do some of that. But like largely to be able to drill down how this fuel that you can just pipe around and put on tankers and all these other things. And is twice the density and is half the emissions. Oh, this is really a better fuel. You know, while we're talking about emissions, we should call out there's a big issue with methane being released in the atmosphere unburned. As CH4, it is deeply problematic. I believe about 25 acts of the greenhouse gas factor as carbon dioxide. But if you're actually burning it, it's a much better thing to burn. That's right. I was just gonna say one more thing on this because I keep calling it natural gas, which always bothers me internally because it sounds like a marketing tactic to call it natural gas. But it's actually called natural gas in contrast to coal gas, which makes me feel better. Right? If you remember, we had the town gas, red coal gas. The reason we call it natural gas is because it was not manufactured out of coal. It was just the thing that we find naturally occurring. But it makes it sound local, organically produced, whatever. I'd rather just call it nothing, but it's a bit. I mean, it has both that connotation and as you mentioned, it's half the emissions. And so, you know, it is worth noting that we found a University of Colorado study that showed that the decrease in coal burning from 2007 to 2013, this period that we're talking about where coal plants were being shut down and new coal was being driven down. And natural gas is booming through the roof. During this period, carbon dioxide emissions dropped by 500 million tons annually, which is the equivalent of taking about 100 million cars off the road each year. Wow. And so, this doesn't speak to the methane leaks, which are very potent, but this study found that 90% of coal's decline came from cheaper gas and wind energy. That combination then drove the equivalent of taking 100 million cars off the road. So, it's not a total benefit, it's not renewable energy, but it did have this net benefit during this period. That's right. And so, I mean, this economic factor tips coal into decline in the US, because now we have, I mean, not just for all these physical properties, economic factors, but it's the ultimate domestic resource. So, it also has all the energy and dependence factors that we want as well. And so, other than the coal industry trying to grasp for life, there's no reason for it. But speaking of the coal industry, we're gassing for life. I think it's time we're talking a little bit about the story of the coal towns, and those are something that can't easily transition as these fuels transition. And so, coal towns are based where there's coal. Power plants are often based near where there's coal or easy transportation to coal. Neither of those things move easily based on other resources or other jobs or other economies. And so, I think we've seen over time this dream that because you have these rich resources underground, the people that are going to live above it are going to have their lives enriched. It would only make sense. It would only make sense, right? The luck of geography, either you move to that town or you're born and around that town, you live above this incredible resource that's going to produce tremendous wealth and abundance. It would only make sense that it would make you and your families all that much more affluent and stable, right? That's right. And so, the opposite has happened. Right, West Virginia, I think most epitomizes this in the US because that's the longest history here. West Virginia joined the Union in 1863 and many West Virginians believed that it's abundance of resources would make them all rich. 150 years later, 13 billions of tons mine and it is one of the most struggling places in the United States to live by virtually any measure. Well, that's educational achievement, employment rate, income level, health outcomes. And so, there's this epic dynamic of decline in the Appalachians. This gets into the fundamental question of how to think about underground resource extraction and development. How is it that coal that's been the basis for so much prosperity in progress in America has left behind such a trail of human and environmental suffering and wreckage where it's been mined? And it's not just job loss, right? You're talking about higher obesity levels, higher rates of cancer, some of the lowest literacy rates in the entire US that is on par with countries that don't have the benefits of a national education infrastructure. It's a human tragedy of epic proportion. - Yeah, and I think there's this governor of Pennsylvania who said in a 95 interview, a Georgia leader, there's something about the extractive industries that somehow exploitation seems to be the only word that applies. They don't seem to care about the hospitals or the churches or the community buildings or even the infrastructure unless it directly affects them. They just never did anything to help the community. This idea that a lot of these resource-based industries also have this yo-yo effect where when there's a boom, there's investment in the infrastructure, obviously, in order to like enable people to live there. But then as soon as there's a retraction, this is what we saw in the UK too, wages are cut, jobs are cut, minds are closed, there's no stable infrastructure to build out. And then there's also this hyper-concentration effect which leaves people really dependent. And so then there's this like, you push back against us as a union, we'll just shut down your mind. And then you can't feed your family, right? And there's not another alternative here because it's not like manufacturing where there could be a different factory next door. - Right, this is part of this curse is that these economies don't diversify resource spaces because they have this abundance underneath them that they expect to benefit them. - That's right. And so as Cole has declined in the US, I think this is the lingering story of what do we do as a society to zoom out like at this moment in time in the US, Cole's still generating electricity. I think we're down to about 15% for electricity. And I think it's mostly in probably the Midwest and some of the East. In our lifetime for anyone listening, there's been points when Cole's been 50, 60% of our electricity usage. And many people listening have probably charged their phones or run their computers or turned on their lights and used Cole. It's increasingly unlikely and more and more likely that more of that's gas, solar and wind powered. Let's talk about the arc of history though in the UK. So much of the Cole story and the first wave from industrialization centered there as we talked about in the lead up to World War I, Cole peaked in 1913 at 292 million tons a year. And the transition to oil and gas happened in the 70s as opposed to the mid 2000s. And so Cole started to lose political favor much, much earlier. You had the 1952 Black fog in London that killed over 4,000 people in a week. And that started to really wake people up to this coal driven life. That was really driven by some of the big power plants in London. Politicians even of the labor government, which remember was the miners of original government, published a fuel policy in the late '60s that started shutting down coal mines. The combination of the increasingly tough economics of mining as well as the concerns around pollution started to put in motion a slow, consistent decline over the years. Now the other big thing that hit is remember the energy crisis that you talked about and I was also hitting globally, right? That's right. And there was already an early discovery of oil and gas in the North Sea, but there was a big push as a result of the pricing to do deeper exploration there. Didn't seem as expensive or as insane to do this ocean based exploration offshore oil field as it once had, once you realize this need for domestic energy ownership. Once that was developed further, it made the transition to gas even faster. And so you just had this steady decline and simultaneously you had the coal miner unions trying to consistently strike and push back against their own government, right? The National Coal Board, which owned the coal mines this nationalized entity.
And finally, Margaret Thatcher came into power as Prime Minister in 1979. She absolutely loved this labor-driven public ownership model. And so she started to put in motion preparations for kind of kick the power out of the coal miner's hands. In 1985, a big strike was kicked off and she was prepared. She had stocked coal, and was able to ride out the strike. They didn't have to give in to any demands, and the mines continued to close. In 1984, there were 187,000 miners. This is off of a high of 1.2 or 1.3 million miners in the UK in 1913. By 2018, there were 590 miners. The mines were basically all closed. So coal miners had been in decline for a hundred years before the last mine was closed, and Britain never reached those record highs again. But in 2013, coal was still the largest single part of UK's source electricity. So the mines that were still running in 2013 were still a growing concern. But then you just started to see this political shift. In 2015, more electricity was produced by a wind and solar than from coal. By 2017, the UK did not need to burn any coal for a 24-hour period to power society. Two years later, in 2019, Britain announced that it would survive for 125 hours without using electricity from coal. Followed soon after by the news that carbon emissions were the lowest that they had been since 1888. Just thinking about the arc, it just goes through this rise in industrialization and then this transition off of coal that's just this crazy story and perfect curve. And Britain in 1913 still was using more coal per capita than anyone else has gotten even close to in history. Something like I think 50 pounds per person per day of coal consumption. It's a hopeful note, right? Because I mean, a hundred years ago, the British Empire is at peak, you know, the sun will never set. And it is entirely powered by coal. And it hits peak in 1913, as you mentioned. But then through a variety of different forces, including the end of the empire and an introduction of other fuel sources, it is able to wane itself off of this massive dependency. That's right. But who knows if other nations will follow the same path? I mean, the US is not too far behind, it seems, with largely fracking as the as the punch on, but some other things are going on. Well, we know a couple nations that are not on that trajectory. And so while the decline of coal in the US and the UK is reasonably spectacular, let's not get too excited about the death of coal because we've got to really separate the relative decline in the US and UK with the absolute consumption globally. The largest electricity source in the world is still coal. By a lot, right? Globally, coal powers over 35% of electricity, natural gas is 22% and then hydro at 14 and everything else is under 10. And this is largely driven by China, India, US, Russia, Australia, Germany, Japan, and a few other countries. You know, an emerging argument, particularly in this in this new book called an all-consuming history of energy, is that at a global level, rather than there being a sequence of an energy transition, where we go from wood replaced by coal replaced by oil replaced by nuclear replaced by renewables is what you actually see in the data and the way history plays out is an accumulation and an agglomeration of energy sources. So collectively, we end up mobilizing more and more energy from an increasingly diverse array of sources. And so energy transitions are not these uniform ubiquitous kind of global things. They might happen in a region such as the decline of kinko on the US or the UK, but they are very quickly overshadowed by other regions. And when you look at the story globally, there's not been more coal being burned than there is today because of Asia. Yeah, so let's go back to China. I mean, when we less laughed off, China was in the steady beat of industrialization and in the 80s, it passed the US as the primary coal user, but they were still kind of close, still kind of neck and neck. While China was just getting started, in the decade ahead, 2000 to 2012, China's coal production more than tripled. So it was 3x the US at that time and rising from one and a half billion tons to over 3.6 billion tons a year and accounting for over half of global coal consumption by the end of that period. So the story of coal in the 2000s is the story of China. That's right. And we know what's going on here? What is driving that growth? Well, a few things. First of all, I mean, China joined the World Trade Organization, the WTO in 2001 and that's when it became deeply integrated into the world supply chains. So then China becomes this primary exporter around the world. And Chinese firms are climbing up the value chain and innovating across manufacturing, either building vehicles themselves or parts of vehicles, consumer electronics, building materials, steel, etc. I mean, put differently. I think this is the era when China took its position as the workshop of the world. You saw that in the UK. You saw that torch kind of past the US and now you see that torch pass to China. And what powers the workshop into the world and each of those three cases, it's always coal. And so coal is powering the growth of all the inputs that are going into all of this. So it's the growth of steel cement manufacturing, coaking coal to bank the steel and all the infrastructure around that from rail to buildings to house people to heating for those buildings to everything around that. And so just to understand the pace of this, there's during these peak years, one new coal plant got online per week. And the pattern became much more efficient than I was before. Really specific coal rich provinces mined with the coal while coastal cities consume the electricity. And the government really consolidated the sector. And so by 2012, large scale mechanized mining was now common, especially in inner Mongolia and the Shangri-G provinces. You know, there's still in more rural homes direct coal heating going on as well. So this big consumption wasn't just what we saw in the US in 2012. It wasn't just going to large power plants. It was going there and still to power often home cooking, home heating. And then in cities, there's often centralized district heating. There was all coal powered with large boilers. Now this is also the era kind of leading up to this when pollution reached crisis levels. Many might remember kind of the lead up to the Beijing Olympics. So it was like, how is this going to happen? Beijing was on everyone's mind as the most polluted city to visit. You see these skies that are just haze filled. You know, they got through the Olympics. But I think that was this turning point in environmental awareness. And it's the awareness that you needed to address this. And so in 2012, President Xi Jinping assumes power in the fall of 2012 and one of his big pillars, I think it was one of his big five national development goals was to make China an ecological civilization, which is really, I think, mostly about pollution, which is really mostly about the burning of coal and how to control air pollution as a result. And they've done by most accounts a pretty phenomenal job. And again, the key there wasn't burning less coal. China burned more coal last year than they were burning in 2007, 2008 by a large margin. It was really about figuring out where to burn the coal or how to evolve the power plants to deal with a particular matter and deal with the sulfur. And so you can look at before and after pictures of Beijing that are five or six years apart. And some of them show, you know, you can barely see anything versus these clear skies. There's a framework that a friend of the show Ryan pointed us to called Kuznet's curves and this environmental Kuznet's curve, the idea being that people, you know, want their economy to rise, they want their incomes to rise, they want their kind of standard living to rise. And that usually comes at the cost of air quality and pollution, right? And sometimes water quality. And then they get to a point where actually they'd rather other things stay steady because like the quality of life is declining as a result of pollution. If you kind of want to read up on some of the economic theories behind the idea of why 2012, right? Well, it's like, well, maybe enough people had a high enough quality of life that they're living in Beijing. And they're saying, you know what is really going to make my life more livable is the ability to walk outside without, you know, an N95 filtering there. This idea that, you know, around the Olympics and after you go outside and you couldn't see across the street because of the pollution, it became all that more real to me living through the LA fires earlier this year, where it's not simply that, oh, it's an inconvenience. I can't see it to, you know, go to work where I'm going, but it's, you're actually worried about your kids developing asthma and newborn babies. You don't know what kind of particular matter effects have on on their brain development. And it becomes extremely visceral and extremely kind of present all day, every day as this probably your number one source of fear and worry, you can really see that Kuznet's curve tipping when you hit these unprecedented levels of emissions and cold smoke and pollution in the air. Yeah, I think that's a bottom line. I feel like when I've been in fire seasons in the past, you like, you feel caged in, yeah, like you feel trapped by it, right? Because you feel stuck inside where you can control your quality, which is not, you know, you would pay a lot of money to relieve yourself of that caged feeling. That's right. And so it was quite a time of massive growth and transition. And, you know, if you fast forward over the next decade, trying to just continue to grow and call you now, meanwhile, China is also becoming very rapidly the leader per your prior point and I about just more energy.
just using more and more energy. And so the coal is not being turned off. They're just adding in more solar, more wind, and more of their sources. And I think this also gets to like China being not unlike the US and saying, hey, we want energy independence. Like, yeah, you know, we'll maybe take some of that natural gas export. But do we want to be dependent on Russia? Do we want to be dependent on ships from the Western world delivering us energy? Coming out of COVID, actually, China suffered a major energy crisis and had to deal with some really blackouts because, you know, demand swung back, obviously all kind of manufacturing came back. They weren't quite prepared. Why did this happen? Well, you know, China was trying to grow their economy, and so they need more energy. They're trying to promote renewable energy and hit their goals to decarbonize their economy by 2060. And they're trying to maintain energy security all at once. That's a lot of balancing act. But they've made a lot of progress moving off of coal. Around three quarters of homes have switched with subsidies from coal heating to, you know, either solar, electric or natural gas, would you a thermal? More energies provided by renewables. But China notably does not have major sources of oil or gas the way that the US does, which explains why China is still building major coal plants today. And to your renewables point, I mean, those of us that are working in this industry that you're constantly reminded by the fact that China installs more solar every year than the rest of the world combined, right? They are able through their manufacturing prowess, their top-down central planning and just the sheer demand for power. They're able to increase adoption. And yet, it's hard to make a dent in the demand for coal and coal production that China continues to have. Yeah, there's this framing that Ryan shared with us, which I really liked the language on, which is, you know, we call it in the US. It's renewable energy or green energy or clean energy. China, you know what they call it there, apparently, just new energy, which I really like. It's just like, this is the new energy. It's better for all the reasons that new things tend to be better. It's so smart, right? Take all the qualifiers and descriptions out of it. And it's simply, it's the newer form of energy. We had wood, we moved to coal. They were placed coal with oil in certain tastes. We replaced oil and coal with natural gas in certain situations. And now we replace it with the new form of energy. This is a new energy. Yeah, I like that. Coal is and when continue to be such a dominant story for China, we're not going to get into too much forecasting in this episode because that is left for the analysts that are spending much more time thinking about this than we are. But one of the things that's interesting when you just try and understand coal today in China is that they're still building new coal plants. Even though the coal plants that they're running are increasingly less profitable, even though the capacity factor of their coal plants is falling, capacity factor means how often they're running at maximum power. Even though China is having to offer capacity payments to keep the power plants online because you can't turn them on and off as we were talking about. And it's providing these coal plants with a source of income. They're not that used to. And so you're seeing reasons why coal is necessary, but as an increasingly difficult to compete on a market basis with the other forms of energy, you may see coal start to take on the role of peaker plants because China hasn't really embraced gas in the way that the US and others have. And so China wants flexibility. They want energy security. They're going to have base power and peaker plants. They're going to have distributed renewable energy. And so coal remains. I mean, you look at the charts and it's just off the charts quite literally, but you're starting to see reasons why this may not continue at the same pace, largely driven by once again, economics. We will one day do an episode on solar, but like you put a panel out once and it just keeps going. You don't have to bring the coal to it. You don't have to bring the gas to it. It just goes as they build out more and more of that infrastructure. They can shift more and more of their load there. Has a lot of powerful factors. Now before we leave Asia and return back home to wrap up with a snapshot of where we are in the world today, we really can't leave without making one more stop into a country whose growth is inseparable from coal. And that is India. Now before we land in New Delhi, Ben, you know the story. It's near and dear to my heart. I have been passionate about the climate crisis for many, many years. I learned in the late 2000s that over 450 million people in India still lived without access to electricity. That shocked me. And I ended up moving to India in 2009 to join an early stage startup called Delight to bring clean, affordable light and power to villages that lacked electricity. And I've got so many stories that I won't share here. But very briefly, India's relationship with coal is both as a massive producer and a consumer. So India gained independence from Britain in 1947 and it faced a challenge of how to modernize and industrialize beyond just the interests of their colonial power. And the theme of geological luck rears its fateful head again here. India was sitting on massive coal deposits of their own. And so began the mining, transporting, burning and transmitting story that we've seen elsewhere. And like in other places, India started out with highly labor intensive small scale mines and very limited technology. And among the many industries that Indian nationalized in the 1970s was coal, creating coal, India limited, which incidentally is now the largest coal producing company in the world. So while the US and China shifted to large scale open pit mining, which was safer, cheaper and more mechanized, India's coal industry remained more dangerous, more manual through the 80s. Coal production, skyrocketed power and steel cement and the decentralized nascent grid that was being formed. But India's tipping point was 1991 when it began to liberalize its economy and manufacturing infrastructure and then later tech drove doubling of electricity demand over the course of the 90s. And so India's population crosses a billion in the year 2000 and India was the second largest coal producer after China with coal powering 70% of India's electricity. So you've got an electricity demand that's doubling. Wow. India's coal production providing 70% of that doubling demand. So think of India as on the coal journey a little late to the game, but rapidly industrializing. And today now the second largest producer in the world, the second largest consumer in the world, but still having to import coal to meet its insatiable demand. So India now consumes more coal than Europe and North America combined, but it has no signs of slowing down, right? The estimates coming out of the research institutes there are that they've got endless reserves. And despite consuming a billion tons a year, they're on track to grow to about a billion and a half tons of consumption by the end of this decade. Wow. Question in my mind is like the art compared to China. That's right. Like how will that play out? And will anyone follow the UK's story? That's right. Fundamentally, it'll be a question of economics. Well, it's what we're getting into. We're ready to go to for analysis. I think we're ready to go to the story. So let's just zoom out real quick and talk about the scale of of coal over time and summary of where we are now globally. I think we hit on most of this already, but just as a rewind, the US solar and wind now produce more power for electricity than coal. Coal continues on the decline of the US. It's out of the UK and largely increasingly out of the rest of Western Europe. Meanwhile, we have the story that we just had with China and India and then rise coal in Asia. But globally, as a result of that rise, coal is still the largest single fuel source for electricity today. And it is also the largest source of carbon emissions by humanity today. The one thing we did today, whatever day you're listening to this, unless you're listening to this many years in the future, which you could be, but if you're listening to it in 2025, it was likely the thing that humanity did today that had the most emissions was probably how much coal we ripped out of the ground and burned, which is wild. Wild to think about this, how long the story has been going on. So if you were put it in a scale of total emissions from humanity, where does coal sit? Coal is the largest source. It's a little over a third of all the emissions from humanity. Coal has admitted around 835 billion tons of carbon dioxide. Oil, all the oil humays burned is closer to 630 billion tons, gas 270 billion. The only thing that gets to a comparable scale is all the land use changes that humanity has driven, all the cutting and burning of forests, the kind of removal of carbon sequestration from that, which is arguably kind of a different motion. So coal is by far the dominant, you know, we're talking about fossil fuel emissions. It's, I mean, it's coal and oil, but coal is the king. One third of all emissions for all of humanity. And like there's a pretty linear correlation between emissions and warmeans. You can kind of directly map coal emissions over the course of humanity to a half a degree Celsius of warming. Put half a degree of warming in context to total warming from experience since industrialized time. Yeah, we're at 1.2 to 1.3 degrees warming right now, right? Since pre-industrialization, and so when we talk about coal's responsibility here, it is significant. Yeah. I guess that doesn't surprise me when I look back at how much we talk about coal, but I think what really surprises me is how much of that happened in my lifetime. Like I thought, yeah, it's going to be the dirty times in London and all that stuff. Like all that stuff from part one, that was like maybe 3% of these emissions. Over half of the emissions are since the mid-90s.
90s, right? This all happened. This is all still happening. Right. In the context of all the awareness that we have about coal emissions. This is when it's been happening more than ever. Right. Let's go to themes. I think we're ready. Yeah. I think we're ready again to themes. Let's do it. We've now been in Coals for six to nine months in various ways. But deeply on this stuff in the last two months. And I would have you realized once one thing So much good stuff in here. But I think you know one metatheme that really came through today for me is the very simply the role that coal has played in history of nations. Right. And so from the accidental discoveries of coal that led to the British Empire and the first industrial evolution to the discoveries of coal that led to the second industrial revolution in the US with steel and rail Later in the century this steady role of coal in China and India. That's just gone absolutely vertical in the last 20 years The correlation between where coal reserves are and where industrialization and development has happened seems non-coincidental. Right. You have the US UK Germany in one era of time and then you have China and then India and the Soviet Union. We're talking about the global powers and coal as the driving force behind their power throughout history They kind of like compounds over time And then it's you know you go from national history to international history And I just did not fully appreciate this role in shaping world war one And it's role it had to do in fueling the home front during world war two And then this kind of the geopolitical nature of energy and how coal became this Where you can retreat to if you want to have Energy security and energy independence and the US where the Saudi Arabia of coal yeah, right and how that has played out through the last 50 years Yeah, I think one for me is on that same theme is just the I don't know if I quite had digested the intertwined nature between the rise of the grid and electricity and kind of the shaping of electricity markets And the rise of coal as the driving input that shaped all of that how they were Part and parcel of the same era and time and my mind jumps to analogies. It's like you couldn't be working on an AI startup without you know The build out of and videos like like it's it's all part of the same Stack in a way and so you needed this kind of like fungible energy source at scale to do a bunch of things But like electricity being one of them and then the unlocks of that and then the driving from that to these big central power stations And like how intimately connected all that is we didn't talk about hydro power here Which is you know the other element but was so geographically constrained yeah and limited as a resource You don't have you know you can't just like move hydro power Around the way without a lot of transmission lines and transmission losses and all this other stuff But so the fact of that story was as intertwined as it was I think yeah coupled with that As you know we spend a part of our day jobs looking at technologies that confule the energy transition and adoption of Decarbonized technologies and renewables and and through that we have to deal with the peculiarities of utilities and grid infrastructure and the ISOs and how it's all formed and all that kind of has roots In the fact that the grid was formed with coal Oh man the grid series is gonna be fun and wild and educational I mean another one on this similar zoom out Theme is I just love this notion of a story arc and coal is One that moved from relative dominance To absolute growth in the west and now in Asia it is both relative dominance and absolute growth again, right So what off of that? I mean I think about the point you made around there's just the addition of more energy over time, right And you know how that plays out differently in different places But that's kind of the macro trend The driving element this whole episode echoed for me was something that we hit on In the first part, but I think really kind of played out through fracking and otherwise just that the long-term winner and big scale movements are all economically driven To me, it's just like a recurring kind of really an in tattooing of that lesson on my forehead which is when we want to Eventually move off humanity off of fossil fuels It's gonna happen when the economics are better and it's not to say there's not a huge role to play for activists and regulation To set the stage to lead ahead there to slow down the building of the plant. It's kind of transitionary But like actually problematic and all that but the actual results when we look back in the longer time scale is gonna be because We unlocked a cheaper way to do the thing that humans want to do and that's what really permanently impacted coal markets right and the role of Activism and policy and regulation can be to accelerate Our journey to where the market forces can take over essentially. How do you make fossil fuels more and more expensive to accelerate the adoption of New energy. Yeah, or make new energy cheaper or make new energy cheaper Both right like both. Yeah. Yeah exactly related to like the economics point Which kind of feels like almost a law of nature. It's obviously not it's a law of human functioning I was thinking about how like the physics of coal Doesn't care about politics and labor battles and all this stuff The reality is it's an amazing fuel in some dimensions and a really problematic fuel in other dimensions I mean it hard to use for certain things really good for other things and that just is what it is and despite political Swings and the labor party taking power nationalized in the minds and whatever It didn't end up mattering because ultimately the coal got harder to get at and it became less economical That's what's going to ultimately lead to again this long-term outcome So it kind of dovetails with the economics point. I was like feels like There's just a reality too. Yeah, you know moving gas is actually easier Fracking gas became even easier and that's just like the thing that then drives forward the development right Similar points like and so our job is to accelerate that journey. How do we not have to endure Another century of China and India Burning astronomical amounts of coal in order to arrive at the other side where they're able to power Their grid and economy through no forms of power generation. Yeah, one Last one on this economics and development point which brings it even closer to home Is the story of the coal town that we ended on and we've been bringing that back very intentionally since the first episode of what's happening To miners at a human level and what's happening to communities? I don't think I fully thought about Appalachia As a victim of the resource curse In the same way I do now, right? So the resource curse is the paradox where you've re-riched natural resources like oil gas or coal or diamonds and you often experience slower economic growth more corruption and weaker institutional development Than countries or communities that have fewer resources and this paradox has been studied and it is repeated itself time and time again across Latin America, Africa, Asia and within North America And it's this paradox of plenty in Appalachia right you you had no diversification of the economy you had this wealth resource that is just extracted and taken away and with it the profits are Extracted and taken away. It's just a simple fact of humanity and our capitalist system that fossil fuel industries do not have great incentive to invest In building out infrastructure and education and public health resources in those communities they are more interested in extracting and retreating and It gets muddled with coal mafia's and political alliances Yep, or bloated state-owned industries all fueled by corruption because you've got this resource countless stories of the leaders of Murray energy and people energy like doing horrific things to their communities and and kind of dangling people along and all of this is true and The same thing happens internationally across decades Something is kind of foundational about basing a society on Resource extraction that even when it's modeled different ways even when you nationalize the minds Even when it's you know the Chinese Communist Party running it even when it's fully capitalist in the US like no matter What way you shape it? It kind of comes back to the nature of the value chain I think of the hard work of getting these commodities out of the ground Then the various middle stages of Before they get to consumers and kind of the Dehumanizing distance between the end consumer What do I think of as the least human thing that I do in my life as part of the light switch like I never Not ever thinking when I flip the lights which are on about who is getting me the lectures the light bulb and the the people that are I mean I do happen now, but but I don't regularly think about the humans involved In delivering the fuel on the other side in my case
It's a tightrope, but let's say it was coal. That's right. How often are we going to think through that? Now, you compare that with going to the local farmers market and buying the thing from the person whose farm it is. It's the opposite experience. And I think that's progress. I think that's infrastructure. I think that's working. But when you think about the people at the center of those places of extraction, we have to take the lessons we've learned and try to undo it. And I mean, there's maybe a couple good examples. I think Norway has done a good job. Norway is one. Yeah. With oil development where they've put aside a lot of the flywheel of capital. They also counterintuitively despite being an oil rich country, a very anti-oil consumption. And so that's perhaps created some healthy, disincentive to diversify. But it's pretty limited data points, indeed. To this point, I think there's something very interesting about there's the resource extraction. There's also the centralization of the grid and utilities and big power plants. And we think about distributed energy generation and storage and kind of potential new ways in which that's going to happen in a much more decentralized way. It's quite interesting. There's no longer a thing to dig for. There's mining that will continue to happen to get resources to build things, including solar panels and aluminum cans and everything else. But once it's deployed, it doesn't need to be fed. This feeds touck anymore. And that's fascinating to think about how it shifts what this looks like. It doesn't need to be fed the input. And it doesn't just distribute the generation of energy. It distributes the power. Political societal power. That's right. What's interesting about distributed energy is that it actually decentralizes the power structure and puts it back in the consumer's hands. And you can actually then work to have a leverage against the centralized monopolistic grid infrastructure that may not have the same incentives that consumers do. That's right. What else we got? I mean, on this point, you've done a few sections on labor and just how coal has been inextricably linked to the growth and journey and story of organized labor, which is such a fascinating result of how the system has continued to perpetuate human rights abuses against workers. Yeah. And I think because coal mining was always so central to powering the economy and simultaneously being perhaps the hardest work, especially on your ground mining, is such an extremely powerful case study. And a case study in these characters that then maybe misstepped, right, going on strike during a war or otherwise, like lead to ultimate backlash. I was also going to ask you to hit me for the first time in our recording that there's a deep parallel to what happened in China, but instead of it being the fringe thing against the government, it became in large part like the government, right? Like, which is kind of obvious. That is the taking the seeds of socialism, which came from helping labor and saying, well, no, let's start with all of it being government owned and go from there. It played out differently until it didn't ultimately everyone arrived at the same thing. Big coal mines, big power plants, some steady state of worker rough treatment, but maybe minimum bar. Now the ride to get there was very different. And for other reasons, perhaps slightly independent from coal mining, like, mouths really forward was, was a trotious outcomes, but it's interesting viewing that through the same lens. I don't quite have the strong synthesis other than my miners ultimately never get the upper hand, I think in all of history. Microcosm of the resource curse, right? The miners who are doing the work day and day out, they are not party to where the value is created in the supply chain. That's right. I think we're going on record to say that the Jevin's paradox is not actually a paradox. No, not at all. When things that people want to consume get cheaper, they will consume more of them. It's only a paradox in the context of something that you have fixed consumption desire. That's right. It would be a paradox if you caught, you know, I only have desire to eat so many donuts. If you brought me infinite boxes of donuts, like if I just keep eating more, that'd be surprising. But if you showed up with faster internet or you showed up with like more books on coal, like I'm like a zoo ball, right? Infinite desire. And coal is energy that is as we've gone through is can become heat, can cook your food, can become electricity, which can be used for everything from charging your iPhone to running the Roman bathhouse. Yeah, we want more comfort and more, you know, electricity and more abundance. For nowhere near, I think the limits of human capacity to use energy. If someone are to do a podcast in a few hundred years, they might see us as like just beginning that escurve of energy use. Yeah. I mean, if you do the math on how much energy hits the earth from the sun, we've captured very little of it. So there's a lot of energy just hitting the earth every day. You don't have to dig for it. I mean, maybe on that note, to me, I'm left with just the raw scale of coal. Yes, king coal is well named. The health and environmental impacts are immense. The energy released over history is immense. The number of people involved the time scale from the Roman era to now, it is still relevant. It is still charging phones today. And the emissions story is in part a good chunk of it is just the coal story. That's right. Yeah, I'm just left with the scale of that and the recentness of it and how relevant it still is to the functioning of humanity today. It is such a relevant piece of human history on all the dimensions that you mentioned. Today is no exception. We do what we do in our small way to combat the changing climate, knowledge part because of coal. That's right. And this next future generations quality of life is going to continue to be impacted based on the amount of coal that we're burning in this planet. We have plenty of work to do. Thank you, king coal, for keeping us employed. I wish you didn't. Is that a wrap on coal? Are we done? That is coal, the human history, the economic history, the planetary history. coal has lived in my head for a long time. I'm ready to start learning about something else, I think. I think there'll be episodes where we want to keep going. It's hard to stop after. I think I'm ready to start learning about something else. This was a tour through human history. This was amazing. Thanks for being on the journey. Thank you all. So outside of coal, Ben, what have you been consuming and burning and transmitting? I, you know, Ezra Client's book, Abundance, recently came out. And so when I needed a break to go to sleep and I didn't want to think more about coal, I switched to Abundance, which, you know, isn't entirely disconnected, but is a nice thing. I'm a policy and permit reform. I'm a big Ezra Client fan and a nice to read his book. Absolutely. It's, I've enjoyed reading the Abundance reviews and analysis and the synthesis of Abundance liberalism, hit against the anti-corporate populism. It's one of the first times, I think, at least in our little worlds where like the liberal's dirty laundry is kind of being aired out in the open and we're here to confront it in order to bring about change. But it's certainly a book of the season for nerds and walks. Yeah. I think otherwise I somehow just like the season, I've had a collision of podcast projects. And so for those that don't know, I have this, this other podcast project called Climate Pop and recently did a fun interview with someone who's involved in our step change fund. Travis McCoy, who's the director of product for Climate Google. And that was a really fun conversation. And then recently did a live show with David Roberts of Volts that was part, climbing at energy in part just his political rants. And he's been reporting on climate and energy for over 20 years. And so just has a lot of interesting viewpoints and context to share. So those were fun. Excellent episodes. Yeah. Listen after you listen to Cole. Oh, on one. I mean, white Lotus season three. Stressful. The music's always stressful for that. Looking forward to starting out. The other one, our friend stars in Deli Boys on Hulu. She is a mafia boss. And this is Deli as a new Deli Boys. So that's going to be fun. And now that Cole is recorded and the Cole books are closed, we can watch a little TV. Until the next topic, it consumes us. Well, just to end with some calls to action, if you enjoyed this, please make sure to subscribe and your podcast player of choice. Radiance also make a big difference. And find us and follow us on whatever social media is you enjoy. We love hearing from folks. And also, most importantly, if you enjoyed it, please send to a friend who might enjoy learning this deep history of Cole alongside us. We will let you know when the next episode of something comes out, it will not be about Cole. It will probably not be an energy source, but we won't share more than that. And lastly, want to thank a couple of folks who helped with just giving us background, context and research. One is Johnston Sutter and another is Ryan Buscalea. Ryan helped us really wrap our heads around China's whole complex story. And Johnston helped us understand the more modern US era of Cole. So we appreciate you both for spending time with us. All right, until next time. Thank you. Bye.
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Podcast Summary
Key Points:
- Coal fueled America’s second industrial revolution (1870–1920), powering railroads, steel, and electricity.
- JP Morgan consolidated railroads and coal mines to control transportation and pricing, expanding the rail network from 53,000 to 250,000 miles.
- Andrew Carnegie used the Bessemer process to mass-produce cheap steel, controlling coal mines and railroads to dominate the industry.
- Morgan bought out Carnegie for $480 million, creating a monopoly in steel.
- Coal enabled the rise of electricity, shifting from home heating to powering cities and industries.
- The episode covers the remaining 97% of coal’s history, including its role in global power, warfare, and the rise of China and India.
Summary:
This transcript from the Step Change podcast continues the story of coal, focusing on its role in America’s rise from the late 1800s onward. Hosts Ben Eigelsen and Aminay Shah explain that coal became the backbone of industrialization, powering railroads, steel production, and the birth of electricity. Two key figures dominate this era: JP Morgan, who consolidated railroads and coal mines to control the economy’s arteries, and Andrew Carnegie, who revolutionized steel production with the Bessemer process.
Carnegie’s control of coal mines and railroads allowed him to dominate the steel industry, producing more than the entire UK by 1890. Morgan eventually bought Carnegie out for $480 million, creating a steel monopoly. The episode also introduces electricity as a transformative force, moving coal from heating homes to powering cities and industries.
The hosts emphasize that coal’s influence extends into the 20th century, shaping global warfare, the rise of China and India, and modern infrastructure. This part covers the vast majority of coal’s history, highlighting its enduring impact on global power and technology.
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Part Two covers the remaining 97% of coal's history, focusing on America's industrial rise, the birth of electricity, global warfare, and the rise of China and India as industrial giants.
JP Morgan and Andrew Carnegie were the titans. Morgan controlled railroads and coal transportation, while Carnegie used coal to produce steel for railroads, bridges, and ships, making coal essential to their empires.
Morgan consolidated railroads, controlled coal transportation networks, and owned coal reserves through deals like the Reading Railroad, allowing him to dominate pricing and supply of coal.
Carnegie used the Bessemer process to mass-produce steel cheaply, owning coal mines for coke production and building private railroads to cut costs, making him the world's largest steel producer.
The Bessemer process blasted air through molten iron to remove impurities and create steel in 10-20 minutes, drastically reducing cost and time, enabling mass steel production for railroads and industry.
Morgan sent Charles Schwab to negotiate with Carnegie, who agreed to sell for $480 million, leading to the creation of a giant steel monopoly.
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