Market News

 December 03, 2018
A Coal Mine Is Devouring a 12,000-Year-Old Forest

 A fight over the last sliver of a 12,000-year-old forest is polarizing German politics.

RWE AG, one of Europe's largest power generators, has petitioned to expand its open-pit Hambach coal mine, which has been steadily devouring trees for almost four decades. Environmental groups have sued to prevent any further clear-cutting, and so far have kept the loggers at bay.

The mine between Cologne and the Dutch border tears a chunk the size of Manhattan into the German countryside. It's adding to political headaches for Chancellor Angela Merkel, all the while hardening the views of both green activists who want to protect the forest and thousands of workers seeking to preserve their jobs. The tension strikes at the heart of a question the government for years has refused to answer: When will it move on its long-held ambition to wind down use of the most polluting fossil fuel?

"RWE misread the mood of the public by moving ahead to dig up the forest," said Claudia Kemfert, a professor for energy economics at the DIW research institute in Berlin. "Hambach is a symbol of the watershed we've reached in this country. The country knows it."

The future of the Hambach forest is just the latest clash pitting Germany's world-beating industrial titans against the country's increasingly powerful environmental movement. It marks another challenge to the strongest economy on the continent, adding to headwinds that include China's move into Germany's advanced manufacturing niche to the trade wars and tax cuts President Donald Trump ordered to boost Germany's competitors in the U.S.

The utility asserts it has a legal right to mine at Hambach. It's clearing trees to access a soft, brown form of coal known as lignite buried below the surface. For power plants in the area, that supply is irreplaceable. For the climate, it's a catastrophe because lignite produces about a third more carbon dioxide than more common forms of coal.

Lignite from the Hambach and the neighboring Garzweiler mine feed two nearby power plants, which have a combined electrical capacity of seven gigawatts; Hambach alone provides enough electricity for 8 million households and directly supports 4,600 jobs, according to RWE. As many as 10,000 workers in the region depend on lignite, a number that rises to 20,000 for coal nationwide.

Excavators the size of skyscrapers strip away Hambach's soil to reveal the dark brown seam of lignite, creating seven giant, stair-stepped tiers into the earth. The site produces 40 million tons of the fuel a year, about one of every four mined nationwide.

The mine's active digging is a few hundred meters wide and moving slowly south toward the last stand of leafy Hornbeams and English oak, which according to RWE needs to be cleared to allow the perimeter of the mine to expand.

"The mine is on a slope, and the coal is at the bottom," said Tom Glover, chief operations officer at RWE's supply and trading unit. "In order to have a safe slope, you have to start at the top. If you can't remove the soil at the top, you can't remove the coal at the bottom. Therefore the mine can't develop as we planned."

To the north of the mine, where RWE has already removed deposits of coal, the company has planted 10 million trees to restore the forest. Once mining is complete, some 20 years from today, a lake will cover almost half the 85 square-kilometer site, with forest carpeting the rest.

Beyond the environment is the money at stake. RWE Chief Executive Officer Rolf Martin Schmitz estimates halting work at Hambach may cost 5 billion euros ($5.7 billion), or as much as 200 million euros a year, and threaten thousands of jobs.

Protesters see Hambach as both a threat to an ancient forest and a wrong-turn in Germany's effort to curtail emissions from Europe's biggest producer of carbon dioxide. Trees have stood at Hambach since the end of the last ice age, though it's been logged periodically since Roman times. With Merkel leading a European Union push to rein in pollution and make good on promises in the 2015 Paris Agreement on climate change, green groups see lignite mines such as Hambach as dangerous for both species in the forest and the broader environment.

The conflict reached a head in mid-September, when police swooped in to evict protesters, who had built tree houses on the site and sued to stop RWE from going further, noting the mine threatens not only the trees but also the homes of dozens of rare species including badgers and bats. They're pressing Merkel and her team of energy-policy advisers to recommend an early halt to Germany's use of coal, closing plants that include more than a fifth of the nation's power-generation capacity.

"It's unacceptable," said Annalena Baerbock, co-leader of the Green party, adding that "we need a coal exit law." The court order to preserve the forest while arguments are considered was a "great day for climate protection."

For now, the political winds blow in favor of the greens. Some 60 percent of 1,021 German voters surveyed in September by Emnid GmbH said Merkel's administration is doing too little to rein in the electricity industry.

The dispute also is feeding concern in Berlin that blue-collar voters will turn toward right-wing groups and away from the mainstream parties associated with the "liberal elite." In recent elections in the states of Hesse and Bavaria, the anti-immigrant AfD party picked up support from Merkel's Christian Democratic Union and the Social Democratic Party that serve in the coalition.

Politicians are struggling to straddle the divide. Merkel appointed a commission including lawmakers from across the political spectrum, union groups, environmentalists and scientists to recommend how quickly Germany can phase out its coal plants without destroying jobs. The panel is due to report in the middle of December, and Merkel will have to address the issue at the United Nations climate talks in Poland beginning Dec. 3.

"Meeting our climate target while keeping North-Rhein Westphalia a center of industry is the challenge for our generation," said Armin Laschet, premier of the German state that's home to both the mine and RWE's headquarters.

For now, it's Germany's environmentalists who have chalked notable victories in addition to snarling work at Hambach. Clean air campaigners secured bans on diesel cars in Hamburg and Stuttgart. A legal challenge by Friends of the Earth Germany has also snarled the dredging of a 90 kilometer section of the Elbe River that would make it passable for larger container ships.

A bone dry summer and early autumn have drained rivers including the Rhine to near-record lows. In addition to slowing freight traffic on the river and leaving some coal plants with too little fuel, the drought killed fish, damaged harvests and forced Germany for the first time in two decades to import grains for making bread and feeding livestock.

The unsettling weather has helped rekindle voter interest in a green movement---in a country where environmental groups have more than 11 million paid-up members, some 13 percent of the population. As a result, membership of the Green party Europe's highest in both absolute and per-capita terms.

That said, pro-industry sentiment is hardening, too, underpinning the AfD's rise. Councils such as the German Business Federation have been increasingly vocal that a shift away from coal is raising electricity prices and hurting industry.

"It feels like a civil war sometimes," said Michael Vassiliadis, head of the IG BCE mining union. "We do not let ourselves be the victim of freeloaders who promise the blue of the sky in climate policy, but let others pay the bill. Our colleagues do good work every day and deserve respect."

Back at the mine, workers held a counter-protest against a closure in October, with 30,000 people taking to the streets at two rallies in North-Rhine Westphalia. They're concerned that either the environmental groups or Merkel's coal commission will bring an abrupt end to their jobs.

Reiner Hoffmann, the head of the powerful German Trade Union Confederation, echoed the workers' sentiment.

"We need solutions which take away the anxiety coal workers have over their jobs and incomes rather than add to them."