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American coal: A burning issue

Tighter regulation, bountiful natural gas and declining installation costs for renewable energy herald the end of America’s coal era

HARLAN COUNTY, KY — “But if the raw numbers look good, the trends tell a different story. Regulatory uncertainty and the emergence of alternative fuel sources (natural gas and renewables) will probably make America’s future far less coal-reliant than its past. In 2000 America got 52% of its electricity from coal; in 2010 that number was 45%. Robust as exports are, they account for less than one-tenth of American mined coal; exports cannot pick up the slack if America’s taste for coal declines. Appalachian coal production peaked in the early 1990s; the EIA forecasts a decline for the next three years, followed by two decades of low-level stability. Increased employment and declining productivity suggest that Appalachian coal is getting harder to find.

Toughening regulation has an effect, too. Coal-fired power plants are the source of more than one-third of greenhouse-gas emissions in America. Last July the Environmental Protection Agency (EPA) issued a rule that requires 28 states to reduce the amount of sulphur dioxide and nitrogen oxide they emit; in December came another, reducing the amount of mercury and other toxic air pollutants that power plants can puff out.

…The EIA forecasts that America will still obtain 39% of its energy from coal by 2035, but that assumes a consistent regulatory framework. Other sources are less sanguine. Deutsche Bank predicts that coal’s share will fall to 20% by 2030 as regulatory risk grows, with natural gas and renewables rising. That seems more likely. The EPA’s new emissions rules may have been stayed by the courts, but they loom nonetheless, hampering investment in coal.

The switch away from it will be painful for some. But as Robert Byrd, the late senator from West Virginia, once said, coal-dependent regions ‘can choose to anticipate change and adapt to it, or resist and be overrun by it.’”

The Economist

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