Is Coal a Dead Man Walking?

Plenty of renewable energy advocates were irritated over Washington DC’s failure to pass any meaningful energy legislation in 2010.  But despite Congress’s inability to pass a cap-and-trade, carbon tax, or any initiative that can wean the United States off of imported fossil fuels, market forces may shift Americans towards more renewable energy sources this decade.

After all, there is a good chance that gasoline could hit $4, or even $5, a gallon at some point this year.  The American economy shows signs of recovering, and meanwhile, the booms in Brazil, India, and China means that there will be more competition for energy in any form.  Yet here in the United States, investment in coal-fired plants has fallen the past two years. What is going on?

After all, about half the electricity in the United States is generated thanks to coal.  Investment in coal plants hummed along the past decade, with 20 new plants breaking ground between 2000 and 2008.  Such construction screeched to a halt, however, in 2009, and plans for 38 plants were scrapped nationwide while 48 outdated plants started a slow path towards retirement.  Last year saw a lull in the construction of coal-fired plants as well.

Economics are part of this trend.  After the economy’s surge between 2005 and 2007, the bottom fell out of the economy between the mortgage industry’s collapse and then the financial crisis.  Natural gas has also become a strong competitor, as new techniques to collect reserves trapped underground could boost supplies while keeping its cost low.  Cable television has treated us to many commercials touting the benefits of clean coal, but technologies like carbon capture and storage still are either technically or economically unfeasible.

Regulations have also had their effect.  The EPA starts the enforcement of new regulations that both aim to increase energy efficiency while reducing greenhouse gas emissions.  And throughout the country, older coal plants cannot operate under updated clean air guidelines.  In Denver, for example, aging coal plants will be replaced by ones operating off of natural gas, as required by last year’s passage of Colorado’s Clean Air-Clean Jobs Act.

Coal has its challenges, but will not disappear completely. Duke Energy has a couple plants that will start operation next year, and other companies have rammed through permits for new plants before the new EPA regulations become effective.  And while population growth in the US has slowed, more people still means that more energy is required, and up to 40 new plants will be necessary to provide an estimated 21 new gigawatts of energy needed by 2035.

Before renewable energy supporters get excited over the decline in coal investment, they have got to remember that the boost in natural gas consumption is not a shining benefit.  Processes like hydraulic fracturing, or “fracking,” have their festering issues.

Most likely we will see a slow decline in coal consumption as cleaner energy technologies become cheaper and more scalable, but we are talking within our lifetime, not a few years.  Where coal has a future is in nations both large and small like India or Kosovo, where investment in coal can actually make a difference in communities where the use of coal is a more attractive option than burning kerosene or wood.  Do not bury coal anytime soon; plenty will still be mined in the upcoming future.

Leon Kaye is the editor and founder of GreenGoPost.com, and can be followed on Twitter.