Coal’s tale should be cautionary for natural gas

Published Aug 21, 2015 at 3:49 pm (Updated Aug 21, 2015 at 3:49 pm)

T.S. Eliot began his poem The Wasteland: “April is the cruelest month…” This past April was more “bittersweet” in Washington County’s energy patch.

In April, the percentage of U.S. electricity generated by natural gas exceeded that of coal for the first time since recordkeeping began in 1973, according to the U.S. Energy Information Agency.

Though coal regained the market share lead in May, the gap between coal and gas generation continues to diminish. EIA forecasts coal’s share to be 36 percent versus 31 percent for gas in 2015, compared with 39 percent and 27 percent respectively in 2014.

Typically, coal and gas generation levels depend on each fuel’s price and on electricity demand. Increasingly though, market share will be influenced by federal regulations. For example, it is estimated that 20 percent of coal-fired power plants have been or are scheduled to retire as a result of EPA’s Mercury and Air Toxics Standards, even though the Supreme Court remanded those rules to the lower courts for reconsideration. For now, the rules remain in effect and the damage done.

In April, according to EIA, the 128 million metric tons of carbon dioxide emitted by U.S. power plants was the lowest since April 1988!

Nevertheless, the Obama administration has called for more CO2 reductions. Although coal’s share of April generation was lower, about 70 percent of CO2 emissions came from coal compared with 30 percent from natural gas. That is because burning coal produces more CO2 than burning gas and because gas plants are more efficient than coal plants.

If the administration has its way, some industry analysts believe coal production could drop from 1 billion tons to 600 million tons annually within a decade. The current financial struggles of our large coal producers suggest the impact is already being felt locally.

Since April 1988, natural gas consumption for generating electricity has more than tripled while coal consumption has decreased 17 percent, according to EIA. With the tide running in its favor so far, the natural gas industry has been content to stay out of the regulatory battles, focusing instead on lowering costs and producing more gas from fewer wells. Who can blame them?

But my friends in the gas industry should consider coal’s plight a cautionary tale.

Remember, fossil fuels still provide 82 percent of all energy used in the U.S. and as I noted in a recent column, the Sierra Club already has its Beyond Gas campaign ready once coal is vanquished.

Energy economics still matter. But coal’s lesson is this: just proposing regulations can change public attitudes and have a huge impact if energy end-users voluntarily adopt the goals of the regulators rather than live with uncertainty while the regulations run the gamut of challenges, appeals and revisions before becoming final.

Today, gas seems well positioned to permanently topple coal in electricity markets. But remember that coal’s lead seemed almost insurmountable only a few Aprils ago.

Cruel indeed.

Jeff Kotula is president of the Washington County Chamber of Commerce and the Washington County Tourism Promotion Agency.


comments powered by Disqus