Tue October 30, 2012
"War On Coal:" Behind the Rhetoric
This election season, some political opinions are being boldly expressed around the North Fork Valley. Yard signs read: “STOP THE WAR ON COAL—FIRE OBAMA.” Area coal miners demonstrated the same message on a rainy afternoon a few weeks ago. KVNF’s Ariana Brocious took a look at the economic realities behind the “war on coal” rhetoric.
At a meeting of the Delta County Economic Development group last week, the talk of coal’s future was dire. Weston Norris of Arch Coal’s West Elk Mine used graphics to illustrate his point.
Each red dot on this map is a coal fired power plant that’s planned to be closed down. Coal’s being hit from all sides.
By the end of the year, U.S. Coal production will be down about 10 percent—partly due to the recession and last year’s warm winter, which resulted in less demand from power plants. Steve Weist of Oxbow’s Elk Creek Mine says there’s another reason, too.
I think there’s a significant war on coal that’s been put into place by current administration, allowing the EPA to put unreasonable regulations on coal-fired power plants which directly affects coal mines.
The coal industry IS hurting. One recent report indicates that roughly 10 percent of the nation’s coal plants plan to retire by 2016. But it’s not all because of the Environmental Protection Agency, or President Obama, says Carbondale-based energy analyst Randy Udall.
The coal industry has been under a lot of pressure, and they’re looking for a scapegoat. But the Obama administration has not been the main source of most of their ills—if John McCain had been elected four years ago coal production would still be down.
The regulations the coal industry is most concerned about were put in motion in 1990, when George Bush was president, and Congress passed amendments to the Clean Air Act that were aimed at reducing emissions of hazardous air pollutants. Since then, the EPA has been working on a new set of regulations for major pollution sources—like coal-fired power plants—to reduce emissions like mercury and other air toxics known to cause cancer, birth defects, and other serious illnesses. It's just that they are being finalized--and going into effect--under Obama's presidency.
Udall says that the updated regulations can be difficult for plants to accommodate, but many of the nation’s coal fired power plants are coming to the end of their natural lives anyway.
The average coal fired power plant in US is about 35-40 years old, and natural attrition is sending many of those plants to the grave essentially, they're being decommissioned. The EPA is probably hastening this process a little bit with new regulations, but power plants don’t last forever.
Udall says there are far bigger economic factors at play, largely, the historically low price and recent abundance of natural gas.
In some respects, the greatest threat to a coal miner’s job is the natural gas industry and their continued production of surprisingly large volumes of natural gas.
This means that utility companies have been shifting their energy generation away from coal to natural gas, and taking the opportunity to shut down some of their old coal plants they can’t afford to retrofit.
Jim Van Someren is a spokesman for Tri-State Generation and Transmission Association, which provides wholesale power to 44 rural electric co-ops in the Western U.S. Van Someren says Tri-State continues to pursue a diverse mix of energy generation—including acquiring a new natural gas power plant last year—but they don’t anticipate closing any of their coal-fired power plants anytime soon.
We’ll continue to count on our coal-based generation for most of our baseload, 24 hour a day demand based on members.
But Van Someren says Tri-State doesn’t support the new regulations. The co-op filed a legal challenge to the EPA over the new mercury and air toxics rule in April, saying it’s unlawful under the Clean Air Act and will significantly increase electricity costs.
The EPA says the new rules will not adversely affect power companies' ability to provide electricity to the country. And existing polluters will have up to four years to comply with the new rules. However, the EPA has also proposed rules for NEW coal-fired power plants, which Van Someren says would be difficult and expensive for utilities.
It potentially could have the effect of taking coal off the table as a future resource, which is unfortunate because coal remains of one our most abundant, affordable domestic resources.
Xcel Energy, another utility provider in Colorado, recently built a new, state-of-the-art coal fired power plant in Pueblo, that meets the EPA's new constraints and cost around $1.3 billion. And while Xcel spokesman Gabriel Romero says coal as an energy source isn’t going anywhere, the new Pueblo plant might be one of the last coal-fired ones to ever be built. In an effort to reduce pollutants that create regional haze, Xcel has been in the process of converting several of its old coal-fired power plants on Colorado's Front Range to natural gas, also resulting in reduced carbon dioxide emissions.
The main reason why coal plants aren’t being constructed is because natural gas is so inexpensive at the moment. It’s much easier to comply with EPA standards, and that’s the bottom line.
But there is an inherent irony in all of this anti-regulatory rhetoric—the fact that EPA emissions regulations on eastern power plants are what drive the demand for North Fork Valley coal in the first place--because their low-sulfur variety is needed to mix with the dirtier eastern coal. Though he acknowledges this, Steve Weist of Oxbow says that politically, his mind is made up.
If Obama gets reelected we’ll see at least 4 more years of what we’ve seen so far, with the EPA feeling free to put whatever regulations they want. And once they get the coal industry shut down I think they’ll go after the natural gas industry.
It’s not all bleak for the coal industry. Despite natural gas’s current low cost, once the price rises again—probably in a year or two, coal’s affordability and reliability will once again make it the dominant power source. The big question is, for how long?