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What killed coal? Technology and cheaper alternatives

Coal is dying because of dirt-cheap natural gas. The rise of renewable energy isn't helping.The Envir...

Posted: Aug 22, 2018 3:23 AM
Updated: Aug 22, 2018 3:23 AM

Coal is dying because of dirt-cheap natural gas. The rise of renewable energy isn't helping.

The Environmental Protection Agency announced Tuesday an effort to prop up coal by replacing Obama-era carbon emission policies known as the Clean Power Plan.

But the regulatory reversal is unlikely to spark a coal comeback. Coal's true nemeses are innovation and economics. Fracking has made natural gas abundant and cheap. Breakthroughs in windmills, solar and other renewable technologies are making them affordable alternatives.

"Coal is just failing to compete with natural gas," said Katie Bays, an energy analyst at Height Capital Markets and a former analyst at the US Energy Information Administration.

The administration's efforts to cut red tape could help coal on the margins, according to analysts. However, fierce competition from cheap natural gas is still expected to force the industry to pull the plug on even more coal-fired power plants.

A dozen coal power plants are slated for retirement by the end of 2019, according to energy consulting firm BTU Analytics.

Natural gas, on the other hand, is clearly on the rise thanks to the shale boom, which made gas cheap and abundant. BTU anticipates 56 new or converted natural gas plants to come online by the end of next year.

Unless the federal government decides to subsidize coal plants, "the economics really dictate that this trend continues," said Matt Hoza, senior energy analyst at BTU Analytics. "It's really hard for coal to keep up with cheap natural gas."

President Donald Trump has announced a series of rollbacks of environmental regulations, including promising last year to withdraw the United States from the Paris climate agreement — a move the coal industry cheered.

Now, the EPA plans to introduce less stringent rules on carbon emissions that could ease the burden on coal power plants.

Murray Energy, the largest private US coal mining company, declined to comment on Trump's proposal, but in a statement reiterated its opposition to Obama's Clean Power Plan. Murray Energy said that the regulation was "very illegal, and, by their own admission, would immeasurably affect global temperatures, even if all coal-fired plants were closed."

Coal slump continues under Trump

Despite Trump's efforts to cut regulation, coal has declined further on his watch.

Power generation from coal dropped nearly 6% from January to May this year compared to the same time period in 2017, according to US government stats. Coal's biggest rivals are all gaining ground. Natural gas power generation is up 17% this year, while solar has soared 31% and wind has increased 9%.

Meanwhile, coal companies continue to struggle. In April, the coal and nuclear divisions of Ohio power company FirstEnergy filed for Chapter 11 bankruptcy and requested a bailout from the Trump administration.

"If natural gas remains cheap and renewables keep falling, which seems likely, coal's steep decline will continue even without government regulation," said Jason Bordoff, a former energy adviser for President Barack Obama and the founding director of Columbia University's Center on Global Energy Policy.

Despite the pressure on the industry, industry observers don't see coal outright disappearing.

Coal is very competitive in certain parts of the United States, including in the coal hotbeds of Appalachia and the Powder River Basin in Montana and Wyoming.

"It won't go away completely within our lifetime," said BTU's Hoza.

'Coal is not able to compete'

In 2016, natural gas overtook coal for the first time as America's leading source of power generation. Coal fell to an all-time low of 30% of the electricity market last year, down from roughly half a decade ago and nearly 60% three decades ago, according to government statistics.

Renewable energy has made inroads thanks to technological advancements and a wave of investment. Solar and wind are increasingly becoming competitive with fossil fuels — a trend that's expected to continue.

Clean energy, unlike coal, is also benefiting from the support of environmentally conscious consumers, mayors, governors and CEOs. More than two dozen US states have adopted standards that require utilities to use a certain amount of renewable energy, according to the National Conference of State Legislatures.

Renewable energy has doubled its foothold in US power generation over the past decade and now contributes as much electricity as nuclear, according to Bloomberg New Energy Finance. BP predicted earlier this year that renewable energy will account for about half of the global increase in power generation through 2040.

"Renewable technologies continue to come down in cost. Coal is not able to compete," said Jeff McDermott, managing partner at Greentech Capital Advisors, a sustainable energy investment firm.

"We should be supporting 21st Century technologies that employ far more Americans instead of trying to prop up a failing 20th Century energy technology," McDermott added.

Mississippi Coronavirus Cases

Data is updated nightly.

Confirmed Cases: 28770

Reported Deaths: 1092
CountyConfirmedDeaths
Hinds224739
DeSoto144216
Madison124234
Jones109149
Neshoba97070
Lauderdale89479
Rankin86012
Forrest82942
Harrison79410
Scott75715
Copiah58016
Leake56519
Jackson55716
Holmes53641
Wayne52212
Lee51816
Oktibbeha51625
Washington5129
Yazoo4786
Leflore47449
Warren46317
Lowndes45912
Lincoln43734
Lamar4317
Grenada3965
Pike39312
Monroe37529
Lafayette3684
Attala35523
Newton3329
Sunflower3216
Covington3175
Bolivar29813
Panola2956
Adams28018
Simpson2713
Chickasaw26418
Tate2648
Marion26311
Pontotoc2616
Jasper2516
Noxubee2478
Pearl River24532
Clay24410
Winston2446
Claiborne23910
Marshall2123
Smith21111
Clarke20424
Coahoma1906
Union1819
Walthall1794
Kemper17614
Yalobusha1667
Lawrence1621
Carroll16111
Humphreys1309
Itawamba1308
Tippah12711
Webster12610
Calhoun1244
Montgomery1242
Hancock12313
Tallahatchie1153
Jefferson Davis1074
Prentiss1003
Greene968
Jefferson963
Wilkinson929
Tunica903
Amite842
George753
Tishomingo731
Choctaw724
Quitman690
Perry634
Alcorn601
Stone541
Franklin392
Benton270
Sharkey270
Issaquena81
Unassigned00

Alabama Coronavirus Cases

Confirmed Cases: 39604

Reported Deaths: 961
CountyConfirmedDeaths
Jefferson4532143
Montgomery3875102
Mobile3797134
Tuscaloosa210739
Marshall162210
Lee124537
Shelby110923
Madison11047
Morgan10203
Walker87123
Franklin86314
Dallas8419
Elmore83614
Baldwin7359
Etowah64413
DeKalb6415
Butler60727
Chambers60027
Tallapoosa57269
Autauga55312
Unassigned50724
Russell5030
Lowndes45820
Lauderdale4576
Houston4464
Limestone4290
Cullman4114
Pike4075
Colbert3775
Bullock3649
Coffee3592
Barbour3331
Covington3327
St. Clair3192
Marengo29911
Hale29621
Escambia2936
Wilcox2848
Talladega2827
Calhoun2805
Sumter27912
Clarke2686
Dale2620
Jackson2522
Winston2373
Blount2181
Pickens2176
Chilton2152
Marion20613
Monroe2052
Choctaw19212
Randolph1889
Conecuh1866
Greene1788
Macon1778
Bibb1761
Perry1541
Henry1303
Crenshaw1243
Washington1027
Lawrence1000
Cherokee797
Lamar711
Geneva700
Fayette671
Clay612
Coosa571
Cleburne301
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