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The Green Paradox
Shale Twists the Knife in Coal

More than four-fifths of the power generation capacity lost last year came from the closing of coal plants. The EIA reports:

Nearly 18 gigawatts (GW) of electric generating capacity was retired in 2015, a relatively high amount compared with recent years. More than 80% of the retired capacity was conventional steam coal. The coal-fired generating units retired in 2015 tended to be older and smaller in capacity than the coal generation fleet that continues to operate.

Coal’s share of electricity generation has been falling, largely because of competition with natural gas. Environmental regulations affecting power plants have also played a role. About 30% of the coal capacity that retired in 2015 occurred in April, which is when the U.S. Environmental Protection Agency’s Mercury and Air Toxics Standards (MATS) rule went into effect. Some coal plants applied for and received one-year extensions, meaning that many of the coal retirements expected in 2016 will likely also occur in April. Several plants have received additional one-year extensions beyond April 2016 based on their role in ensuring regional system reliability.

America’s power generation capacity is being trimmed and modernized, and in the process it’s being greened as well. The average age of the coal plants shuttered in 2015 was 54 years, and constituted 4.6 percent of U.S. coal capacity. Meanwhile, U.S. coal exports fell off a cliff, dropping 23 percent in 2015 from the previous year while our imports stayed constant. This was the third year in a row our exports have fallen, a reflection of the fact that global coal prices have fallen recently as demand has slacked and supply has surged elsewhere. Whether it’s oil, coal, or natural gas, energy supplies are abundant at the moment and demand can’t seem to keep up, making times tough for producers.

Coal’s decline has been precipitated by the shale boom, which in addition to boosting U.S. oil production by millions of barrels per day has also unleashed a flood of new natural gas supplies. That shale gas has depressed domestic prices to the point where coal, once considered one of the cheapest energy options around, is struggling to maintain its market share. And while coal producing states won’t want to hear it, this dethroning of Old King Coal has some attractive environmental benefits: burning natural gas emits a lot fewer localized air pollutants than coal and half the greenhouse gases. Eco-activists are loathe to give it credit, but the latest coal data prove fracking’s green merits.

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  • Rodney

    The trimming of power generation capacity makes me nervous, especially if it is reducing our rolling reserve. Although I disagree with FDR’s economic policies, I recognize his good sense in putting his Keynesian stimulus spending into infrastructure that would help to modernize the country and prepare it for war production. If you already have the power capacity, you can go ahead and build the factories and shipyards. Otherwise, you have to invest in power plants and transmission and distribution first or in parallel.
    I could be wrong, but there are so many hot spots waiting for the right spark to ignite a regional war, if not worse. We need to be adding capacity and hardening it, not trimming it.

    • Jim__L

      Agreed. We need to be doing more to lessen the potential shock if (perhaps when) the Middle Eastern wars that are driving down the price of energy by driving up energy production transition into a regional war where energy production is interrupted and falls below normal levels.

  • Jacksonian_Libertarian

    I would like to see EMP Hardened and dug in Thorium Nuclear Reactors placed on all military bases. These reactors would be attached to the US power grid and funded by electricity consumers. In addition, they would be used to power a defensive shield of rail guns, and direct energy weapons like lasers during times of need.

    • Jim__L

      Can you share some good references for the feasibility of those initiatives?

      • Dan

  • rheddles

    Coal’s decline has been precipitated by the shale boom

    False.

    Coal’s decline was a campaign promise of Baraq Hussein Obama who had no idea what fracking’s potential was when he threatened to drive all coal mines into bankruptcy in 2007. Left to the free market, the conversion would have proceeded more smoothly and less painfully. All fracking has done is make the pricing increase to consumers somewhat less onerous.

  • Blackbeard

    You are aware that both Hillary and Bernie promised to shut down fracking if elected? They did take different approaches: Bernie was in favor of a direct outright ban while Hillary was in favor of strangling fracking with impossible to meet regulations. Do you think either approach will help with factory jobs in the U.S?

    And people wonder why blue collar workers favor Trump.

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