A growing chorus of prophets and pundits has been proclaiming the death of the American coal industry. After all, more than 250 coal-fired power plants have been retired since 2010 with several dozen others slated for closure within the next year. (We now generate more electricity from natural gas than from coal).
Domestic coal production dropped from 1.2 billion short tons in 2008 to 773 million last year while industry employment, at 52,000 today, is down nearly 40% from a decade ago.
But maybe it’s premature to publish the industry’s obituary. In 2017, coal production was up 45 million tons, the largest year-over-year increase since 2001, with growth recorded in each of the five major coal-producing regions.
The largest regional increase was in the Powder River Basin of Montana and Wyoming, where production jumped 8%.
Even though U.S. coal consumption declined slightly last year, exports jumped 58% from 2016 driven by a weaker dollar, lower production costs, and rising demand in Asia and Europe.
Coal prices across the U.S. rose as well, especially for Central Appalachian coal. Mining employment is also up slightly, about 1,500 from a year ago.
So is this a one-off, or is the coal industry on a sustainable rebound?
Unquestionably, the use of coal for power generation here in the U.S. will continue to decline in the face of cheap natural gas and subsidies for renewables like wind and solar, even if President Obama’s clean power plan should be rescinded. But globally, the outlook is much different.
Recent forecasts by both the Energy Information Administration of the U.S. Department of Energy and the Paris-based International Energy Agency show the world’s demand for coal growing steadily, especially for power generation, at least until 2040.
Though environmentalists despair at this reality, it offers tremendous export opportunities for America’s coal industry.
And it’s not just fast-growing economies like China, India, and Indonesia where coal use is projected to rise. Japan is building dozens of new coal-fired plants to replace nuclear facilities closed after the Fukushima disaster in 2011.
Cloud Peak Energy, a company that mines in the Powder River Basin, recently signed a multiyear contract to supply its coal Tokyo Electric Power Company.
Germany, planning to shutter all its nuclear plants by 2022 while achieving 45% renewable energy by 2030, is also building coals plants in an effort to improve grid reliability and bring down some of the highest electricity prices in the world, a major concern for that country’s export-oriented manufacturing industries.
Though Germany possesses abundant supplies of high-CO2 lignite, it is relying on cleaner coal from countries like the U.S. for its new power plants.
China has also re-emerged as an importer of U.S. coal, which is much cleaner than their domestic variety.
The development and deployment of advanced technologies that reduce pollution and CO2 emissions also bode well for the future of coal, especially if these technologies are adopted abroad.
High-efficiency, low-emission (HELE) plants with carbon capture are commercially available and have the potential to reduce greenhouse gas emissions from the entire power sector by 20%.
Pulverized coal combustion and integrated gasification combined cycle systems can reduce CO2 emissions by 25% compared with conventional coal plants.
Carbon capture, utilization, and storage (CCS) have also become a commercial reality.
As one example, the Parish Coal-Fired Generating Plant southwest of Houston that began operations last year is capturing 1.6 million tons of CO2 annually and shipping it via pipeline to oil fields where it’s used for enhanced recovery. A Mississippi power plant burning lignite is also capturing CO2 and selling it to oil companies.
So let’s not write off America’s coal producers. Export opportunities abound since coal will remain the world’s primary fuel for power generation for decades to come.
At the same time, the U.S. can become the global leader in HELE and CCUS, thereby contributing greatly to emissions reductions both here and abroad.
Weinstein is associate director of the Maguire Energy Institute and an adjunct professor of business economics at Southern Methodist University’s Cox School of Business.
Read more at IBD
People often write articles based on their wishful thinking rather than reality. I’m referring to the people who are predicting the demise of coal. I remember as late as 15 years ago I read articles claiming that we had no choice but to go to renewable energy because we were running out fossil fuels.
John from Michigan is right. We should be building coal plants in this country.
Mr. WeinStein….
Why oh why do you think that CCS is necessary?
CO2 does NOT cause global warming.
Try this… http://nov79.com/gbwm/ntyg.html
And please read all of it………. Thank you.
Many people are becoming opposed to wind turbines in their areas despite what all the Greens and Liberals say for the facts that these things are hazerdoius to Birds and Bats and their noisie no matter what the alturnative energy wackos say
If there is any common sense in this world, we’d be building more coal burning power plants (like China is now doing) instead of tearing them down. Bird slaughtering windmills aren’t the answer. As the Germans can now tell you, the windmills have a life expectancy of 18-20 years and then start breaking down. The citizens of both Germany and the United Kingdom tell us about how the drone of the windmills causes health problems to both themselves and their pets as well as wildlife in their area.
Coal-powered plants are being shut down because the Obama administration believes that CO2, a beneficial gas in our planet’s life cycle (green plants absorb CO2 and exude the oxygen we all need to live), is evil. It is not. (and it has no proven connection to global warming.) We’re doing all these anti-common sense things solely, as the UN’s former climate head, Christina Figueres said, to redistribute the world’s (read America’s) wealth and to destroy (America’s) capitalism. If we have any common sense at all, we should start tearing down windmills and building coal-powered power plants.
I agree that we should be replacing old coal-fired plants with modern, cleaner, coal burning technology . CO2 is not an issue. The planet will change for the better with more of it.
The wizards who have figured out how to tap into shale gas want immediate rewards. This may be short – sighted.
Of course by now the arctic icecap was suppost to be gone(According to Al Bore)the earth would too polluted to live on without domes over major cities and wearing gas masks outside and that gose back to the first Earth Day over 40 years ago and still they preach then doom and gloom poppycock