January 15th, 2013
King Coal’s crown is slipping. Cheap natural gas—along with increasingly stringent environmental oversight—has reduced the US appetite for coal. So the industry is looking to markets in China and India. What are the issues for both local and global communities and what are the strategies for closing coal down.
Bruce Nilles, senior director of the Beyond Coal Campaign for the Sierra Club, said that climate change has been his organizations’s first priority, and coal is the top culprit. Over the past ten years, they have worked to stop construction of 90% of new coal plants. “The pipeline of new coal is essentially over in the US,” he said. He continues to work to retire the existing coal fleet and replace it with a mix of wind and solar.
According to Trevor Houser, partner at Rhodium Group and visiting fellow at Peterson Institute, coal accounted for about 50% of electricity generation for most of the past three decades. That started dropping dramatically a couple years ago, down to a low of 33% in April of this year. “That tracks exactly with the decline of natural gas prices over the same period.” Traders in the electricity markets are paying far more attention to the price of natural gas than they are to environmental regulations, he said. For new generation, climate is a serious concern. It’s also going to matter on the retirement side. But most of those coal plants haven’t shut down; they’re still available to be turned back on if those economics change.
Focusing on the Northwest, Ross Macfarlane, senior advisor at Climate Solutions, said that about two years ago the coal industry identified a key strategic initiative of shipping coal from the Powder River Basin to China. “This would significantly impact local communities and directly impact the climate,” he said. He’s been amazed by how prominent this issue has become, with thousands of people showing up in very small communities as well as in places like Seattle. In addition to local issues, exporting coal ties into the desire to help areas like Asia develop a new energy future as opposed to investing huge amounts in the technologies of the past. He noted that the World Bank said that if we build the coal export infrastructure, “it will be game over.”
Looking toward the future, Nilles said that while there are 150 thousand people working in the coal industry, there are as many working in the wind and solar industry, and they are just getting started. “In terms of scale, clean energy is doing far more than the coal piece in terms of jobs.”