Burning coal is a very dirty and very cheap way to power one’s economy, but in the shale gas-rich United States, the sooty rock is finding itself choked out by fracking. The FT reports:
The most immediate threat to coal remains the gas production unlocked by the shale revolution. Although coal-fired generation has recovered somewhat as the gas price bounced back from a 10-year low in 2012, the combination of cheap gas with environmental regulations is accelerating the retirement of coal plants.
New EPA regulations on power plant emissions threaten to curtail coal consumption in the United States even further. With domestic demand for coal dropping, miners are looking abroad for more pliant customers, most notably to the supposedly green-minded Europeans. Across the Atlantic, energy security is decidedly shaky, as many European countries neglected to set down the shale trail and now find themselves more reliant on Russian gas than they’d like. Renewables can only function as a kind of swing energy source. Given their intermittent nature, they can’t be relied upon to provide consistent baseload power the way coal, gas, or nuclear can. That’s why many of the vaunted green “triumphs” in government-backed wind and solar energy expansion have done little to curb Europe’s need for fossil fuels.But as the FT notes, American coal is finding it difficult to compete abroad with “lower-cost competition from Indonesia, Australia and South Africa, and a slowdown in global demand.” King Coal’s reign, at least in America, seems to be coming to an abrupt and rather ignominious end.