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Describing recently implemented or approved regulations – including the Greenhouse Gas New Source Performance Standard, the Utility MACT standards, and the Cross-State Air Pollution Rule – and their deep impacts on the coal industry, a report from the Heritage Foundation calls on Congress “to create a framework that restricts overregulation, empowers the states, balances economic growth and environmental well-being, and creates a timely permitting process for all aspects of coal production.” The report finds no issue with the free market changing coal’s share of our energy mix, but argues against artificially reducing that share through disincentives and regulation. The report states that… [more]
View InsightCoal is one of America’s most abundant and affordable energy sources, and has served for decades as the country’s primary base load electric fuel. Coal comes with significant environmental trade-offs, including local air and water pollution, deforestation, and mountaintop removal from mining process, and greenhouse gas and toxic particulate emissions from burning it to generate electricity. Given plentiful U.S. supplies of low-cost coal, there is clear economic and energy security rationale for continuing to use coal, and government and industry have worked for years to promote and demonstrate “clean coal” technologies. It is hoped that these technologies will capture CO2… [more]
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U.S. coal exports from terminals in the Pacific Northwest and Gulf of Mexico could aid coal producers, who are keen to tap into international demand after a drop-off in domestic coal use. However, local officials and environmental groups have been resistant to plans to build the necessary infrastructure, like ports and rail, in the region. The Seattle City Council, for example, voted down plans for an export terminal that would have shipped coal from Wyoming and Montana’s Powder Basin to markets in Asia. Coal producers and exporters say the projects will deliver local and national economic benefits, including jobs and… [more]
View InsightBloomberg Government has published The Twilight of Coal Power?, an assessment of how EPA’s new greenhouse gas rules might affect coal-fired power plants. The report concludes that although coal will remain in the energy mix for decades due to existing plants, the EPA’s new rule will effectively ban new coal plants. The new rules require that fossil plants not exceed 1,000 lbs. of CO2/MWh. Scott Segal, executive director of the Electric Reliability Coordinating Council, which represents utility interests, warns that EPA’s rule will disrupt utility hedging by eliminating coal from the fuel mix and “depriving the market of its flexibility.”… [more]
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Domestic natural gas production continues to expand, while natural gas spot prices are at historic lows. Many utilities are responding to these changing market dynamics by building gas plants or “fuel-switching” existing power plants from more expensive fuels to gas. As a result, coal generation continues to fall. Due in part to price competition with natural gas, some Congressional “clean energy” subsidies may not be renewed. EIA projections suggest that domestic production will continue to increase, and that natural gas prices faced by electric utilities will remain below $7.00/mBtu, through 2035. [Source: EIA] What does near- to mid-term domestic natural… [more]
View InsightIn an April 26th speech to business leaders at the U.S. Chamber of Commerce, Nick Akins, President and CEO of American Electric Power, urged the U.S. to develop a comprehensive energy policy. Akins explained that a recent “perfect storm of circumstances” – including EPA regulations, diminished reliance on nuclear power, and low natural gas prices – are making natural gas the de facto favored fuel for power generation. This is a concern for Akins, who points out that natural gas prices have been volatile historically, and that relying on a single fuel source for power generation is risky. [Columbia Dispatch]… [more]
View InsightLast week the EIA reported that natural gas-fired power generation will increase by as much as 17% in 2012, while coal is expected to decrease 10%. This shift away from coal and toward natural gas is largely tied to gas’ low price, as well as projections of the impacts of increasingly strict federal regulation on power plants. In March, natural gas spot prices averaged $2.18MMBtu, their lowest level since 1999. Then on April 11th, the NYMEX May gas futures contract settled at a 10-year low of $1.984/MMBtu [EIA]. Despite low gas prices, some utilities express hesitancy about over-committing to gas-generated… [more]
View InsightA recent op-ed by noted academic Bjorn Lomborg questions the idea that renewable energy – wind, in particular – is up to the task of mitigating climate change. Renewables are not cost-competitive with traditional energy sources, he argues; and because renewables are intermittent and must be backed-up by base-load or peaker power plants, their true costs per kWh is often understated and their CO2 reduction potential overstated. Much of Lomborg’s argument focuses on the UK’s plan for a 20% reduction in CO2 by 2020 that, according to the op-ed, would require that wind account for 31% of the country’s electricity… [more]
View InsightOn March 27, 2012 the Environmental Protection Agency, under the authority of the Clean Air Act, released proposed greenhouse gas standards for newly constructed power plants. The rules would require that “new fossil‐fuel‐fired power plants meet an output‐based standard of 1,000 pounds of CO2 per megawatt‐hour (lb CO2/MWh gross).” Combined-cycle natural gas plants should be able to meet this requirement, and coal- or petroleum coke-fired plants would be able to with emerging technologies such as carbon capture and storage. The proposed rules elicited varied response from advocacy groups, many of which were highlighted in this Los Angeles Times article. Environmental… [more]
View InsightAt the Methanol Policy Forum – held March 27, 2012 in Washington, DC – energy industry and policy experts convened to discuss the fuel’s potential as a transportation fuel. The Forum’s opening remarks were made by DOE Assistant Secretary David Sandalow, who offered that methanol offered advantages as a transportation fuel but also brings along some challenges. Among the advantages: “First, and perhaps most important, methanol is inexpensive to produce. At today’s low natural gas and high oil prices, methanol could help reduce fuel costs consumers pay at the pump. “Second, methanol is a liquid at room temperature. It doesn’t… [more]
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