Coal Continues to be an Important Energy Source for the U.S.

Dr. Frank Clemente from comments on the continued importance of coal-based energy in the U.S.

Dr. Frank Clemente from offers his comments and research on the continued use of coal as an energy source in the United States.

The coal power plants some bash today were strongly supported by both parties and fostered several decades of unprecedented economic growth by replacing expensive and risky oil fired generation with affordable and reliable coal. By 2000, however, we had developed a continuing "dash to gas" mentality in the power sector, remarkably akin to the relatively rapid dependence we had developed on oil in the 1970s. As natural gas generation entered the picture throughout the last decade, electric utilities competed with families and businesses for fuel and the price of both gas and electricity escalated in an ever-increasing roller coaster ride. Today, we have placed a massive and inordinate bet on shale gas to fuel a fleet of gas power plants larger than all our nuclear, coal and hydroelectric facilities combined. This dangerous dependence on the fuel with the greatest price volatility - and a history of supply problems – places both the economy and energy security at risk. Any shortfall in shale gas will necessarily be made up of imports of Liquefied Natural Gas (LNG), priced off oil and from some of the most politically unstable regions of the world, including the Middle East. And, according to the most recent data from the U.S. Energy Information Administration (EIA), shale gas production has leveled off and prices are on the rise. The dark days of gas curtailment in 1977 may not be as far away as many gas optimists believe. Further, those days may haunt us for years if we allow our powerful coal fleet to be steadily diminished by the Environmental Protection Agency’s (EPA) short sighted "War on Coal."

Coal power plants were built to save the economy and protect national security

By 1980 the interest rate had risen to 18%, electricity reliability was at risk and the Fuel Use Act of 1978 generally outlawed new oil and gas turbines. In the winter of 1978 manufacturing firms were on natural gas rations. Additional coal power plants were desperately needed replace oil and gas while meeting increasing demand for energy. The construction of these coal facilities was a national security imperative.

And now we close reliable coal plants and build even more gas capacity.

Punitive EPA regulations against coal are taking us down another dangerous road. The Electric Power Research Institute has indicated over 100 gigawatts (GW) of coal generation could be forced to close by 2020. But we are on track to build over 100 GW of gas and over 20 GW of wind – which requires gas back-up. Yet, EIA says domestic gas production will increase only 5% by 2020. This is just a fraction of the gas needed to replace retiring coal plants alone—forget about gas vehicles and new manufacturing plants. And 60 million home owners with gas furnaces will be in shock as gas power plants gobble up limited supply at ever higher prices. If we allow excessive EPA regulations to force closure of coal plants the imbalance in the gas market will make the 1970s look benign.

As we blithely did with oil for electricity generation in the 1970s, we may soon be importing LNG from members of OPEC (or Russia) to fuel our power plants. In that global market LNG is actually priced off oil—as Japan learned to its dismay after Fukushima. Japan pays over $16 for LNG while gas prices in the U.S. are $3—for now.