The Future of Yesterday’s Fuel-

The Future of Yesterday’s Fuel–18fh.

A large swath of the population—mostly on the left—thinks the American coal industry is dead or dying. But another large portion of the population—mostly on the right—thinks the coal industry is primed for a comeback.

Neither group is correct. The coal industry isn’t going anywhere any time soon; but it will almost certainly continue to contract for the foreseeable future (regardless of President Trump’s rhetoric or policy shifts). The reason isn’t stringent environmental regulations—it’s low natural gas prices, which make that fuel a lot cheaper to burn than coal. While less-expensive energy is usually a good thing, this trend is worrisome. Not because of lost coal jobs (which can be replaced) or because coal is the workhorse of our economy (that title that now belongs to natural gas); it’s scary because coal’s decline could end up throwing the country into a recession or even a Great Depression, while simultaneously putting our nation’s security at risk.

Between 1971 (when the International Energy Agency started keeping records) and 2014, worldwide coal production steadily increased. In 2014 and 2015, however, worldwide coal production declined, and somewhat steeply. Nowhere was this drop in coal’s use more visible than in the U.S. electric sector. Generating electricity takes a lot of energy, and coal has been the sector’s go-to fuel since electricity was invented. Not anymore. Now that distinction falls to natural gas.

As a fuel, natural gas has always had some disadvantages compared with coal. It’s harder to transport (natural gas requires pipelines to get it from point A to point B, while coal can be transported via truck or rail car). Natural gas is much more difficult to store (you can store coal in a pile, whereas natural gas is generally only stored in large, naturally formed underground reservoirs). And natural gas prices have historically been much more volatile than coal prices.

But the advent of hydraulic fracturing has changed everything. The low price of natural gas in the United States has negated these disadvantages. Of course, from a purely environmental standpoint, this is a wonderful occurrence: Natural gas burns more cleanly than coal and emits less carbon dioxide per unit of energy.

Why burn a dirty rock when you can burn a clear, odorless gas instead? Which is exactly why the growing use of natural gas has, especially in the last few years, started causing utilities around the country to begin shuttering their aging coal-fired electric plants. Natural gas is cheaper and many smart economists say it will continue to be cheap for years to come.

This all sounds like a win-win, except for one little problem: We aren’t building any new coal plants to replace the ones we’re closing. Coal-fired power plants now comprise about 25 percent of all electric generators, down from about a third of all such generators in 2005. They’ve been replaced mostly by new wind power plants and, to a lesser extent, by natural-gas-fired power plants. Nobody has built a new coal plant in nearly a decade and nobody is expecting one to be built any time soon.

Why is this a problem? There are only four types of power plants that can be consistently relied upon to generate baseload power (i.e., the power we need available at all times): coal, natural gas, nuclear, and hydroelectric. The U.S. Energy Information Agency projects coal power plants to be only 23 percent of the total U.S. electric generating capacity by 2020, with nuclear and hydroelectric plant capacity staying about the same.

As a society, we love to build first in response to market signals or new technology without necessarily thinking through the potential ramifications. Yet historically we’ve always been careful to ensure our fleet of power plants is adequately diverse. Now, because of the fracking boom and coal’s environmental concerns, we are steadily headed down the path to an economy tied to just one fuel: natural gas.

source–brian potts,

 

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