Drajem Coal DiscussionCoal can’t get much love. Cheap natural gas and a bevy of EPA regulations are conspiring to force old coal plants to close and pushing U.S. production down to less than one billion short tons, near a two-decade low. While low-cost production in Wyoming and Illinois has been able to hold steady, the legacy mines of Appalachia face devastating losses in production and jobs. Meanwhile, projects that were supposed to demonstrate a future for coal in a carbon-constrained world are struggling or dead. The Obama administration pulled the plug on the FutureGen clean coal project this month. Another similar project in California likely faces a similar fate. And the Kemper plant in Mississippi, which was so important that then Energy Secretary Steven Chu personally lobbied state regulators to approve it, is now both behind schedule and forecast to cost $6 billion — three times its initial cost. Loan guarantees of $8 billion for next generation coal projects were never even handed out, as no eligible borrowers were identified.

Against this backdrop, the Obama administration called for $2 billion in tax credits for carbon capture projects in its budget this month. That plan also includes a separate credit that could be $50 per ton of sequestered carbon. The National Coal Council has also laid out a plan to boost carbon capture technologies, saying the Department of Energy needs to reorder its various CCS projects to get to 5-10 gigawatts by 2025.

Avoiding the well-worn arguments over EPA regulations and climate change, are there federal policy changes that could boost coal? Will the proposed CCS tax credit be successful in a way that the loan guarantee was not? Are there other policy options we should pursue?