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Despite Washington’s Wishes, Coal’s Decline Will Continue

by Andrew Grandahl

We’ve heard a lot in recent years and months about a “war on coal” taking place in the United States of America. Progressive activists and politicians have been attacked for depriving coal-workers and their families of their livelihoods, and for having some naive dream of clean, renewable energy. When announcing a new Trump administration initiative aimed at increasing domestic coal production, Secretary of the Interior Ryan Zinke stated, “We can’t power the country on pixie dust and hope.” While hope is certainly not a reliable source of energy, I for one am eagerly awaiting the technological breakthroughs necessary to bring about the pixie-dust revolution.

All jokes aside however, this sort of misrepresentation and frankly ludicrous depiction of renewable energy is not only misguided and deceptive, but also stands in stark contrast to the facts and data analysis coming in from utilities companies and financial institutions alike. Reuters surveyed utilities companies in 26 states, representing 32 organizations in total, all in states which sued the Obama administration in attempts to block the Clean Power Plan, the primary target of the new Trump deregulations. All 32 utilities companies were unimpressed and essentially unaffected by the Trump initiative, stating that their multi-year plans would remain unchanged as they expected demand for coal to continue to fall significantly as it has for the past decade.

Their resistance to returning to coal revolves around a few main points. The first is that the boom in shale (natural) gas production in the U.S. has caused natural gas prices to plummet, which has made it cheaper than coal. Economically, natural gas is currently the better choice for utilities as indicated by recent announcements on the shut down of some of the largest coal-fired power plants in the country. Coal plants are being retired early and utilities are petitioning their local governments for approval of accelerated "depreciation rates" for their coal power plants, the rate at which plants lose value over time, due to wear and tear and other causes. It is important to note that extracting natural gas is an environmental nightmare on many fronts. Although, natural gas emits less carbon dioxide than coal and oil, there is often leakage of methane during the extraction and transportation of natural gas. Methane is better at trapping heat than carbon dioxide and is much more potent greenhouse gas.

Secondly, the cost of renewables is falling quickly and becoming more competitive with conventional fuels. The price of solar modules fell 75% between 2009 and 2015, and has continued to fall since. (In stark contrast, coal’s part of overall U.S. electricity generation has fallen from 48% in 2008 to 31.4% last year). Breakthroughs in battery and storage technologies, photovoltaics and other clean technologies, and a continued shift of markets and investors towards a clean energy future will all contribute to the increasing competitiveness of renewables. Additionally, Trump’s regulatory rollback will undergo many legal challenges, slowing down and preventing some of the damage. State environmental regulations will remain in place as well, with states such as California and New York righteously rallying against these deregulations and creating even more ambitions clean power plans.

In a nutshell, although coal fuelled the last era of industrialization, no amount of political grandstanding and legislative maneuvers will change its declining importance in the new energy system. As Ben Fowke, CEO of Xcel Energy put it, “I’m not going to build new coal plants in today’s environment... And if I’m not going to build new ones, eventually there won’t be any.” And James Van Nostrand, director of the Center of Energy and Sustainable Development at West Virginia University College of Law dispelled any notion that politics was really driving the change: “The coal jobs aren’t coming back... The coal industry is being pounded by market forces. It’s not regulation.” As the saying goes, money talks and the markets have spoken. Regardless of the desires of politicians, our energy future is much bigger and far too bright to burn dirty.

Andrew Grandahl is a guest blogger for eesi. You can reach him at andrewgrandahl@gmail.com