May 6

The Energy Question: Episode 100 – Michelle Manook, CEO of FutureCoal


The Energy Question: Episode 100 – Michelle Manook, CEO of FutureCoal

When the transcript becomes available, we will include it here. -Thank you!


David Blackmon [00:00:09] Hello. Welcome to the interview question with David Blackmon. I’m your host, David Blackmon, as most of you already know, and my special guest today is Michelle Minook, who is the CEO of FutureCoal, a global association that represents a big swath of the global coal industry. Michelle, how are you today?

Michelle Manook [00:00:27] Good. Thanks, David, and thanks for having me.

David Blackmon [00:00:30] Well, thank you. Thank you for agreeing to. Come on, I appreciate it. Just so people know, Michelle actually reached out to me. So that made me feel good that somebody is actually listening and watching. It’s always gratifying to know. But before we get into the Q&A, Michelle, why don’t you talk about FutureCoal, and what its mission is so that people understand what we’re talking about here?

Michelle Manook [00:00:54] Yeah. Well, I mean, FutureCoal is. Well, it is the only global coal association representing the coal value chain. But 38 years ago, it was called the World Coal Association. And we only really just changed our name, late last year. And that’s really to encompass, what we saw as some very misaligned and, very misunderstood, views around the technology that really supports the coal value chain to abate and become sustainable, to continue the contribution that it’s making in so many areas beyond power. And and so, yeah, so for us, it was very much, a sense of we really need to, as an organization now, not just represent producers, which was pretty much what the, organization did for its 38 years, but represent all of the coal value chain, the producers, the consumers, suppliers, and in particular, the, you know, developing and emerging nations where coal continues to be so critical. And it’s really been that journey of, of creating a platform of neutrality, of common sense, of really looking at facts, not fiction, certainly, you know, not being, emotional and, and really, observing, and, and defining what responsibility actually is, which is not necessarily the way, you know, the global north might define responsibility. We see that as much more an economic and environmental contribution and I yeah. So so it’s it’s yeah, it’s an incredible journey that we’ve been on since I’ve joined in 2019. But, you know, I think it’s, it’s, it’s an important, organization that’s really, evolving to be a think tank. And, and also, you know, and, and also a real voice for a lot of those emerging and developing nations as well.

David Blackmon [00:02:55] Yeah. Well, you know, I just in fact, I just wrote a story about the what’s happening in the coal space, for Forbes yesterday and, you know, is being driven by emerging nations and developing nations and, of course, by China and India, Indonesia. And I you talk about, dealing with responsibility and, and honestly defining everything that encompasses. It encompasses for a developing country that the, you know, government wants its people to, to enjoy better life, better economic conditions. Energy security is a big part of responsibility, isn’t it?

Michelle Manook [00:03:38] Yeah, absolutely. I mean, in 2019, when I joined the organization, nobody was talking about on on the public platform, energy security, energy reliability, energy affordability. And that really became the basis of, of, you know, of our narrative because as we all know, that’s critical. I, I actually joined, a panel that the Financial Times did a couple of years later, where I was schooled by a real preeminent, you know, academic where he told me that the energy trilemma was solved. And I was like, really, really, really interesting. And then, of course, you know, a few months later, it was very clear, I’m sure, to him and the rest of the global North, that it wasn’t the idea that we forgot the importance of energy security or energy affordability and what that meant. The idea that we didn’t even recognize the importance of reliability in all of that, you know, it was it was almost quite frightening, actually, to be involved in that conversation. Now. Three, you know, what is it in the last three years, many, many more people are speaking up and out because of things that, you know, events that have happened in the world triggered at the start, you know, by the pandemic. But really, you know, I think every responsible government, every responsible investor, that should never really left their mindset. You know, that is just basic, economics based. Basic understanding of what really drives an economy and drives the economic growth and prosperity that many of us enjoy. And now, you know, for many of us, it’s compromise. And so that’s not even talking about the nations who haven’t been lifted out of poverty yet. You know, just looking at those of us who have thought of ourselves as rich. You know, now, energy poverty is a real thing for us to consider in those developed nations.

David Blackmon [00:05:34] While I’m worried it may be something to be considered in Germany and in the UK before too much longer to the way things are going. I pay a lot of attention to what every year, what happens at Ceraweek and the discussions that come out of that very important global energy conference that’s held in Houston every year. And for the second year in a row. The speakers at your week outside of the government officials who, you know, came in and scolded everyone for not doing enough. The discussions for this is the second year in a row now where the executives and folks really, in all phases of the energy space, talked about the need to reassess what we’re doing, in the global space related to net zero and retiring thermal capacity around the world. You just got back from a trip and had a lot of discussions about all this, I’m sure. Are you sensing that that that is, becoming a widespread, line of thought that we really need to reassess what we’re doing here?

Michelle Manook [00:06:40] Yeah. I mean, you know, David, I think you and I have discussed this. It’s really a tale of two, you know, two hemispheres, and maybe it’s, you know, it’s the global north. The global south. My conversations from 2019 today. When it comes to the global South, they are firmly, you know, focused on the importance of reliable energy. You know, a diverse range of energies. Affordable energy and energy security. You know, I think they they absolutely understand, I think there was enormous concern, and pressure. And we saw that through bias funding and, and all sorts of, you know, all the kind of strong arming that happened, you know, over this period where, you know, their opportunity to abate, and in that abatement for particularly in coal abatement for coal is not just CA, it’s it’s more than that. It’s about efficiency gains. It’s about waste management. It’s about the general modernization, you know, of that value chain. So while, you know, while we were still arguing who is good and who is bad, they were actually looking at coal as, okay, well, how do we become self-reliant? You know, this is pretty much very much, I would say, quite driven by China and India. How do we become self-reliant? How do we look at this product, coal as a multi commodity product. How do we extract more value per ton. from this. And by value they meant economic and environmental. And I think that, you know, that thinking has just developed and continues to develop, while we’re still arguing the merits of, of coal and, and so from my perspective, it’s really great to see that, you know, leaders at zero are actually starting to question the cost of the transition, which not many did, really, until I think McKinsey put something out in early 22 that actually put a number on the table of, you know, 9.2 trillion very early on a year. You know, very early on we asked that question, who who is going to pay for this transition? And I think we I think you and I know who’s going to pay for it. And then, of course, can can we afford that? You know, and and here and here lies, you know, the, the, the very issue. So for India and China, I’ve just come back from China. And and a Mongolia roadshow. I’ve done, you know, I’m due to be back in India later this year, but I did India a lot last year in early in the year. South Africa, the focus is very much about stabilizing the system, finding diverse and good baseload. Obviously, coal is really critical to a lot of those nations. I I’ve mentioned looking at what more they can do with the product. Look at how they can develop the industries beyond combustion. And, you know, really, really with that key focus of self resilience, energy security, just all front of mind. You know, with that great recognition that, you know, that people need their support, you know, they don’t have the luxury of working out when I can turn on my washing machine and dishwasher, they just still need to get basic, you know, basic utilities and, you know, and services to these people. And I think when you hear that kind of, difference in the way we look at this energy transition or, you know, whatever the words, whatever the catchphrases of the day, I think it puts it into that stark reality picture. You know, this is, this is a very different, I guess, conversation for different nations because everyone is a different starting points. And so that respect, and that understanding is, I think, from my perspective, is actually what’s going to be critical to shift that debate forward, but also for those of, you know, for those players that have taken some really entrenched positions, they are going to need to walk back some of that. And I think the way to walk back some of that is really to actually understand, you know, the United Nations Sustainable Development Goals. It provides a very good basis of of, you know, of investment criteria for, you know, particularly for the, you know, for those vulnerable, populations that still exist.

David Blackmon [00:10:53] So, you know, one of the things I did in getting ready for this was look at your website and you have the the cold hard facts, right? Which is really good and really an excellent product. I think everyone ought to go read. But part of the part of that is, is the fact that you lay out that with current technology, we can already abate, capture 99% of emissions from an everyday coal plant. We hear demagogues like John Kerry talking about unabated coal plants, and nobody’s building those anymore. But isn’t it kind of amazing the misunderstanding people have about what? What a new modern coal plant actually does in terms of emissions?

Michelle Manook [00:11:42] Yeah. Absolutely. And you, you’re absolutely right to say that a lot of the, you know, a lot of the negative perception around coal plants is based on old technologies that just wouldn’t be used today. And, and, and the replaced by, you know, lots of new technology and, and it’s not, it’s not experimental. We can actually abate a coal plant up to 99%. We know that by adding CCS. So it feels, wrong to, to exclude coal, and, and not allow that opportunity for that abatement and abatement in a coal plant is, is staged as well. Like we can actually get it to be efficient with technology quite early on. And some of that technology can get, you know, up to 49% efficiency, which is really important. And that’s, you know, that efficiency and those, you know, those particular applications you can already see based in China, in Japan, which, you know, still. Well, I don’t know if Japan is still running the most efficiently because certainly China is actually running an incredibly efficient. Yeah as well. But, you know, India is certainly moving towards that within new builds. So it’s, you know, it just goes to show that it’s it’s quite important to take that stage process. We know that we can eliminate the SoCs, the NOx you know the particulates. We know we’ve got technologies for that. All those things that really bothered people in terms of air pollution and the like, the those exist. And then when we get all of these little, you know, the, these segments in in a row, then we are ready to really apply something like CCS, if that’s what, you know, CCU is to really, bring it up to that, you know, up to 99%, you know, technical. I mean, some people would argue with me and say, actually, Michelle, I think we can do 100, or we could do better, right? Sure. I’m just going to go up to 99%, but just to keep it, you know, like reasonable. But I think the point is we can do it. There’s no reason to eliminate coal. There’s more reason to try and abate it. And many of those plants, particularly in Asia, the young fleets, you know, they can they can afford more upgrades. What? You know, why are we not thinking about that? And why are we not allowing funding to flow in that we know that they’re not going to be retired soon. So isn’t the responsible thing to do to allow funding to actually upgrade some of these plants? And if you go back to call and you know, those countries that were signatories to call, a lot of those countries said coal is in my mix, my energy mix. And what I want to do is abate it with these different technologies. And, and I think we all know what’s happened with funding and how funding is being applied and how that particular request of nations has been ignored. And we’ve really just got into a whole word smithing about phasing in, phasing out, abated, unabated. I mean, you know, it’s a nonsense. We’ve lost good time.

David Blackmon [00:14:47] Right? And yeah, so much of the conversation around energy in general is just so much nonsense. I did a an interview this week with a reporter from, NPR, one of their national shows called marketplace. And, about the Texas grid we have here. We are in probably the mildest weather month of the whole year. And Ercot having to issue warnings about not having enough dispatchable capacity to meet demand on a day when the high temperature doesn’t even get to 90 degrees in Texas. And she she asked me for a five minute interview. We talked for half an hour because she was so interested in the fact that I was talking about the mechanics of what’s going on on the grid, instead of just blaming it all on climate change. And, and she had, yeah, I guess she doesn’t talk to anyone who actually understands the mechanics of what’s going on. But when you talk about being responsible, is it part of being responsible in the power generation space? To, particularly in the United States, but in every other country on Earth to have a power grid? That’s reliable and not not prone to to periodic blackouts because you don’t have enough thermal capacity to, to, keep the lights on during severe weather or even under severe weather like we have this week.

Michelle Manook [00:16:08] Yeah, absolutely. I mean, I, I think we’ve talked I started in downstream gas and the first, education I got, because our major customers were utilities was the importance of baseload and reliability. But, you know, I mean, what’s been really frightening for me is that people that you would think are educated, whether that be in, you know, quite senior policy positions of energy or, you know, or the finance and investment sector making important decisions about how, you know, how investment funds flow, don’t actually understand the difference between, you know, Aey and Belco. I mean, I wouldn’t I mean, I wouldn’t have understood it if I wasn’t in it either. But that’s actually quite important because when you make the protestation that renewables are cheap or sure, when the wind, when the wind blows, is it as it should, and the sun shines is short at that moment in time? It probably is. It’s also been quite subsidized to get you there. But we know that’s not what a system cost is. We know that’s not what the cost of unit of electricity is, and that’s really critical. And so I you know, I think, you know, even the IEA has gone out and warned that the assessment has to even go, back to, to Velcro. But these are actually important discussions. They’re much more difficult discussions. They’re much more technical discussions. They’re much more intelligent discussions. But nonetheless, they’re really imperative that we actually understand. We shouldn’t expect that the everyday mom and dad needs to understand that. But the people who are making the policy decisions need them, so they don’t.

David Blackmon [00:17:42] I mean. Let’s be honest, in the United States, people in Congress, there’s not a member of Congress. Well, there might be a handful who actually understand maybe 10% of what they really need to know when they’re voting on these bills. And the regulators are probably somewhat more informed, but even they don’t really have a comprehensive knowledge of what it really takes to to have a reliable and affordable power grid sector. And I just think that to me, that’s the whole problem we have right now in energy is, is policymakers. But what’s happened in Texas is purely because of bad public policy. And I think the same thing is true in Germany and California. I mean, do you do you see it any differently than that?

Michelle Manook [00:18:31] Well I well certainly from my.

David Blackmon [00:18:33] And I don’t want you to say anything you might.

Michelle Manook [00:18:35] No, no, I mean no, I, I, I think in general this debate lacks, facts. It just it’s so emotional. I think we’ve talked about this. There’s a religious fervor to it, that that’s not how we should be talking about anything related to energy. Like, you know, energy is a very, very technical and detailed discussion, and it’s not easy to understand. You know, I’m a I consider myself a layperson a little bit more educated than the most. It takes time, but you can do it. You can understand it with, you know, but you’ve got to dedicate the time, you know, all of us need to get better at communicating it. And I think we we’ve learned that it’s, you know, future goal as an organization. Certainly, you know, worked really hard to try and make it as simple as possible as we talk about it. But look, David, ultimately, this is really about an openness and a willingness to actually learn, and, and also understand that maybe you were wrong and accept that, and I do think we’ve got a little bit of that now. There are a lot of big, important people and players who have gone out very, very publicly, and, and taken a position and it’s not based on fact. And, you know, they have to walk it back. And I think, you know, we’re all going to have to help everybody walk it back. And part of that is just being, you know, much better at how we educate, how we approach the debate. You know, my big comment to my members is we don’t need to be emotional. We just need to be factual. And we’ve we’ve maintained that for the last five years. And, and for us that’s, you know, that’s been a good position. And, and I think that’s where we have to be. We don’t want to see the debate move the other way. Now, you know, we.

David Blackmon [00:20:25] Don’t we.

Michelle Manook [00:20:26] Don’t we don’t we we don’t need another ten years of that. So I think I think it’s really it’s really important that we just all work out okay. We we didn’t get it right. We need to get it right. What are the facts?

David Blackmon [00:20:42] So one fact that we’ve had going on in the world, here over the last few months is a lot of shipping disruptions. Because of wars. And the Houthi is in the Red sea and other aspects of of what happens in the transportation space. So much of coal that is used in China, India, Indonesia and other parts of the world is shipped, to those countries. I know of the United States export market for coal is really boomed over the last decade, despite the fact that, you know, we’re retiring so many coal plants here. I wonder if your members have been significantly impacted by these disruptions in the shipping lines that that we’ve seen come about over the last several months?

Michelle Manook [00:21:27] Yeah. Look, I think all members have experience and even prospective members, they you know, they’ve certainly experience and been exposed to those disruptions. What I’ve seen, what I can say is certainly over the last three years, you know, current members and prospective members have really recognize the importance of supply diversity as well. And also they’re starting to really look at, you know, the verticals in the horizontals do that, you know, do we need to be other types of players? Do we need to be more across the value chain, have greater ownership in aspects of the value chain? So there’s been a lot more, you know, questions about the business model. You know what what does that look like. And as you know, with every disruption, with volatility, you know, comes that thinking, if it’s not already in the consider planning. So I would just say in particular for, you know, countries that do rely on, you know, like China and, and India, we do rely on, you know, the seaborne trade, there is enormous amount of thinking about the volatility and how they can really build their independence and, and what that may look like and what that means. And there’s certainly in conversations that I’m having, you know, a lot more of that conversation about becoming more and more self-reliant, more and more, independent. And I think, you know, and we’re already seeing it. I think that will change the, the nature of, of coal players. You know, you’re not going to just have those traditional producers, the traditional consumers, you know, still a lot of the, you know, the the value chains in particular, in China and India remain integrated. You know, they, they still. So I, you know, I think we’ll start to see, quite a bit of structural change. But I also, you know, just in that and it’s, it’s quite an interesting question because it’s actually throwing up a lot of the dynamics that are happening, you know, particularly in coal that I’m exposed to and I’m seeing is that, you know, there is a recognition by the key players and, and maybe that’s the BRICs nations, but, you know, effectively those coal consuming and producing nations that need each other, that there’s more opportunity to. And I’ll just put this in inverted commas. Joint venture. So it’s bringing more of that oil and gas type mentality that you and I know about. You know we’ve come up. So it’s bringing more of that because obviously there are more risks to share. And it would be better if we could share it. But equally there’s enormous opportunity. So, you know, why should we continue banging our heads against a brick wall? Why don’t we work with each other and find the solutions and the workarounds? I’m seeing more of that. And certainly the future coal platform has become or is becoming and, you know, for many players, the platform where we can actually work constructively, you know, where all the players, I mean, they they’re joining, on the basis that there’s no denial of climate change and that they need to be responsible call participants. So there’s no, you know, there’s nothing there that’s not transparent about their aspirations. But it’s like, well, why don’t we work with those players and, and find other funding sources or, you know, work with each other in that joint venture way, to actually develop our aspirations, which often are shared.

David Blackmon [00:25:01] So I have one of the and along those same lines, the world what is it, the Global Energy Monitor report that came out this month. One of the really interesting aspects of that, to me, where coal’s concern is that, globally in 2023, total retirements, amounted to 21.1GW. And I may be mistaking this by some fraction of a percent, but that’s that’s actually less retirements than the United States alone had in 2015. I found that number to be really kind of compelling, and it didn’t get a lot of attention in the report. Does that mean, do you think that that leaders around the world are kind of waking up to maybe the thought that maybe we have retired too much coal and lost too much of our baseload 24, seven generation capacity, over the last decade or so?

Michelle Manook [00:26:00] It’s really do you mean for the US? So generally.

David Blackmon [00:26:05] Generally, you know, you you meet with people from, from all over, all parts of the world. Yeah. I just wonder if globally you’re seeing that.

Michelle Manook [00:26:12] Well, I mean, you know, you know, certainly for a lot of Western Europe, you’ve seen already like they’ve walked back some of the retirement. Yeah. So you know, you know that that’s happening like. Yeah. I think the short answer is there is a dawning because there’s a reminder of the importance of baseload. And if you if you don’t if you don’t have that immediately, you know, to replace whether you know, that’s nuclear or if you can’t get access to, you know, an affordable gas source, or if you haven’t built an LNG terminal yet, like, you know, like it, you’re going to have to return to coal. Yeah. And I think, yeah, I think that is a daunting, you know, that’s it’s but for me, it’s a return to the importance of baseload.

David Blackmon [00:27:02] Well. And so I will tell you, just from a personal standpoint, a great awakening of mine. I’ve always been an oil and gas guy. I spent my whole career in oil and gas. So I was, you know, gleeful, that we were starting to use more natural gas in power generation beginning, you know, in the early part of this century. And in Texas, we had a lot of older generation coal plants that ended up getting retired and replaced with natural gas. But I was in an interview, I think it was in 2020. It was, yeah, during Covid with a company that is a big maker of batteries, stationary batteries. And the guy that was talking with kept using this term renewable baseload. And that just scared me to death. Is there any, I mean, with current technology now, maybe if you had a quantum leap in battery storage technology, maybe you could make the case that you can build renewable baseload. I still think that even even then, it would be spacious. But, is there any such thing today with current technology, using solar and wind only that can become the equivalent to base real baseload generation with coal or nuclear or natural gas in your.

Michelle Manook [00:28:24] I mean, not not not not that I’m, we’re aware of that it’s cost effective. I mean, you could build the equivalent base load of wind and power, but you’re going to be building in a lot of redundancy. So who’s going to pay for that?

David Blackmon [00:28:40] Right. Yeah.

Michelle Manook [00:28:42] That’s the point isn’t it. Right. So I think I think we’ve just got to be really, really careful here because that’s why it’s so important to talk about reliability and affordability when we talk about baseload. Yeah. so and.

David Blackmon [00:28:55] That’s all part of being responsible right. I mean that all plays into that.

Michelle Manook [00:29:00] Yeah. I, I, I really feel like one of the important jobs that we all need to do is really challenge the notion and the definition of responsible. You know, we we did it very, very early on under our evolving coal strategy. But I, you know, what is responsible policy? What is responsible investment? What is responsible baseload. You know, like you can just throw it to a range of different things that we’re arguing, you know, about, across the world today. Yeah. Let’s, let’s, let’s have a real, real red hot go at defining responsibility in a, in real in real terms. Yeah. You know, not this notion of what it could be. So.

David Blackmon [00:29:47] No, that’s a great point. I know we’re running up against time. I want to give you a chance before we go, to let our audience know where they can find you and follow what you’re doing.

Michelle Manook [00:30:01] Okay, now, this is probably really bad. I’m sure that my head of global comms is going to say, I can’t believe you don’t know how to do this really well. Well, you’re on.

David Blackmon [00:30:10] Your website. Yeah,.

Michelle Manook [00:30:11] Yeah. Look, we are on we are on LinkedIn, so please, absolutely follow us there. We, we’re very we’re really, we really try to make sure that we put all points of view and, forward and, so, yeah, we, we try to make sure that, you know, people have access to what we consider credible information. It’s not about being Coal. That’s not our job. We believe that some people, you know, call is going to be right for them. For others, it’s not. So it’s not, you know, it’s not a question of that, but obviously the feature call website, So, you know, come in, come and have a look at us there. We’ve got a range of great information and and reach out. Reach out to us. We are we’ve got a really great dynamic, Secretariat. We are always ready to listen to new innovation. We really are trying to build our innovation network for call. We want to hear about what you’re doing. We we’ve got a pretty good grasp at the moment, but we want to introduce and connect players. And, and if you’re a coal player and a coal player of significance and, and you’re not a member of future coal, you know, come and be one, you know, be on the platform and, and and let’s support not just everybody’s national interest, but let’s support, the global coal network and a market that’s really critical to really ensuring that, you know, all of us and more importantly, our global community really benefits.

David Blackmon [00:31:38] Michelle, I want to thank you. I can’t thank you enough for doing this interview. This very refreshing gives me a greater understanding of what’s really happening out there. And I, I sure do appreciate your time

Michelle Manook [00:31:48] Well, thanks, David. And you know, I’m such a fan. I really love I really love your content. And, and you’re doing such a great job as well. It’s. And isn’t it great that someone who’s oil and gas and coal can be in actually the same podcast? It’s a.

David Blackmon [00:32:02] Yeah, well,.

Michelle Manook [00:32:03] Kind of. Okay.

David Blackmon [00:32:04] I think we have a lot of common interests here, folks. All of you do too, out there. Yeah. We all have some real common interest here in making sure our, our energy grid is, as reliable and safe and and affordable for everyone. Because higher energy costs or, as I say, all the time, or the regressive tax that hit the pause among us the hardest. And so it’s, it’s, incumbent on all of us to make sure our policy makers do the right thing in the energy space. With that, I’ll quit preaching. Michelle, thank you so much. And, we’ll see everybody again next time.

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