Now, we all accept that coal as a fuel already had a limited future. We all accept that it is a 'dirty' fuel – but, having acknowledged that fact, where does that leave the UK's energy security now? What are the alternatives? And are we now in a real mess? The answer to that last question is YES – YES we are in a real mess.
Let's take a look at the 'perfect storm' of circumstances that finally drove a stake through the heart of the UK's deep coal mining industry...
'We're greener than you'
Some years ago, the European Union introduced an Industrial Emissions Directive, a tax on industries whose processes were deemed to increase atmospheric pollution.
The UK Government adopted the Directive – and then had a brilliant idea. Why not have the UK lead the world in tackling climate change? Show the rest how it can be done?
They went ahead and introduced an additional UK tax regime on domestic industry, known now as the Carbon Price Support scheme.
This 'we're greener than you' approach immediately put British industry (intensive energy users and most particularly coal-fired power stations) at a significant competitive disadvantage to overseas competitors. Now who saw that coming?
The US and the success of shale gas
At the same time, the United States discovered the economic advantages of shale gas production. This policy was so successful that tens of millions of tonnes of US coal (previously used to power their domestic industry) now flooded world markets. Surprise, surprise, the price of coal dropped through the floor.
Meanwhile, other countries such as Russia, China and Colombia were each pushing increased amounts of coal into the same open market – and coal prices kept on tumbling...
It gets better: The UK's additional emissions tax (Carbon Price Support) was structured to automatically increase every year. Domestic coal-fired power stations began to hoover up increasing amounts of cheaper foreign coal. Like any business, they weren't going to look a gift horse and all that...
Not exactly 'greener'
With world coal prices through the floor, UK-produced coal (often mined almost literally across the road from the power stations) was now more expensive than coal shipped halfway around the world. Not exactly a 'greener' solution, eh?
Let's double our tax regime!
Now, remember the UK Government's Carbon Price Support scheme? It gets even better: In 2014, the UK Government let it be known that, come April 2015, it's extra emissions tax was going to effectively double, adding even greater pressure to coal margins. Knowing this huge rise was coming, the power stations stocked up to the max, getting in every tonne of cheap imported coal they could before the tax hike. What business wouldn't go down that route?
The upshot for UK deep coal mines was that the cost of actually mining the coal was greater than the price at which they could sell it. It doesn't matter what business you're in, that scenario is only ever going to end in tears....and that's where we came in.
Both Labour and the Conservatives are committed to ending all coal production in pursuit of a carbon-free future. Very laudable I'm sure you'll agree. But this drive to drive out carbon is only workable if you have a 'Plan B'. Oh dear...
The UK Government wants to close all UK coal-fired power stations by 2025 – yet these power stations still provide around 30% of all our electricity.
The country's energy future is being staked on renewables – but the Government has slashed subsidies on solar and wind.
It has turned its back on the so-called 'clean coal' technologies (carbon capture and storage); and is keeping its fingers crossed that a combination of the French and the Chinese will both build and finance a nuclear power plant here.
It's already likely that this nuclear plant won't be completed quickly enough to plug our looming energy gap - and as a desperate sweetener, the Government have offered our nuclear 'partners' some outrageous price guarantees once the plant does come on stream (whenever that might be).
North sea oil is running out, and the collapse of world oil prices means developing new fields is increasingly unlikely. Drilling for shale gas has not begun – and our main sources of gas come from increasingly unreliable and volatile nations and regimes who owe us no favours.
We've still got many millions of tonnes of coal underground in the UK; but once you close and cap-off a deep coal mine it never re-opens. Let's all keep our fingers crossed, eh?
Energy policy? You're having a laugh. Energy security? Ditto.