Although the combination of the Administration, the EPA, and populist anti-fossil fuel groups such as the Sierra Club, have been waging all-out war against coal use, the news of its ultimate extinction is misleading and entirely premature.
The latest attempt to demonize coal has been the introduction of heavy-handed environmental regulation intended to force the early retirement of more than 303 coal-fired power plants, representing more than 45,000 megawatts of power.
Even so, coal still accounts for the largest share of the nation’s electricity generation (37.2%). Although natural gas has taken over much of coal’s previous power generation, its displacement of coal entirely will take decades to play out, particularly as international shipments and prices of liquid natural gas will likely increase substantially as worldwide usage of American-based LNG reaches maximum momentum.
Also maintaining the viability of coal, of which the U.S. represents the world’s largest reserves, will be its record international usage, which generated an all-time high export of 124 million tons of thermal and metallurgical coal (used in steel production) last year. Most of this export bulk went to the huge emerging markets, such as China and India, which predominate in the use of coal power. This will grow as these populations’ domestic demand and power usage will far exceed current usage in the upcoming years.
According to the International Energy Agency, coal currently accounts for 41% of global power needs and will overtake oil as the world’s top energy source by 2017. In the past year, coal already established itself as the leader of all fossil fuels (coal, oil, natural gas) in terms of total global consumption. Also relevant is the increasing emphasis on metallurgical coal, which is used for steel conversion and, therefore, less exposed to the competition from natural gas prices.
Although bankruptcy of coal mining, as well as domestic coal power for steel conversion usage remains the Environmental Protection Agency’s goal, the push-back from America’s major coal mining states (West Virginia, Ohio, Kentucky and Pennsylvania) is already manifest. Therefore, the anti-coal crowd will not likely succeed in putting coal mining out of business, as the United Mine Workers still represent a powerful political block.
Also, lingering U.S. unemployment, and the lost multi-billions of revenues reflected in America’s largest mass of world coal reserves will forestall the final coup de grace, that EPA and its varied lobbying groups associations have planned for coal.
With the Obama Administration beset by its highest unfavorability rate, even the Democrat Party will also do its part in preventing the final death blow that the anti-coal activists have planned to execute.