What's Up With Coal?

Is its decline a result of Federal policy or of cheap natural gas?

2 min read
What's Up With Coal?

Jason Plautz of InsideClimate News has an interesting and relevant article this week drawing attention to recent studies of why coal's role in U.S. electricity generation is declining, an issue that has come to have an outsized place in the presidential campaign. One such study, from the Brattle Group, finds that 77 GW of coal generation will be retired by 2017 under very strict environmental policies; in a somewhat laxer regime, 59 GW will be retired.

Yes, that's right: whether Federal policy is strict or relaxed, 59-77 GW of coal generation--the equivalent roughly of 59-77 nuclear power plants--will be taken out of service in the next five years. What is more, says the Brattle Group, its estimate of retirements has grown by 25 MW since it previously reported on the issue two years ago, and that is almost entirely because of the revolution in unconventional gas and the precipitous drop in natural gas prices.

By comparison, Plautz observes, regulations issued by the Environmental Protection Agency have had a lesser impact on coal because their future is so uncertain: Two key EPA pollution rules—the Cross-State Air Pollution Rule and the Boiler Maximum Achievable Control Technology (MACT) Rule—"are stuck in legal and regulatory limbo, and their impact on industry has actually lessened."

To be sure, those rules are not going to be stuck in regulatory limbo forever. The cross-state rule first was formulated in George Bush's administration and may, if things turn out that way, finally meet with Federal court approval in a Romney administration. Whether it is somewhat stricter or laxer, it will make burning coal even more unattractive relative to natural gas. As for MACT, the EPA claims that in its current guise it would produce economic and health benefits amounting to ten times the cost of its implementation, according to Plautz. It too, when it finally clears all hurdles, will make coal--or shall we say reveal coal as?—still less of a good deal.

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