Friday, December 25, 2009

[Top 10] #7: Coal’s Tribulations

Last year ended badly for coal. The company enjoyed high prices for eastern and Midwestern coal throughout the year, and then Barack Obama was elected president, so the industry lost its friends in the White House. Then three days before Christmas all hell really broke loose, literally, when a dike holding back a retention pond filled with fly ash from a Kingston, TN gas-fired power plant ruptured, releasing 1.1 billion gallons of the coal byproduct into the Emory River. The spill quickly inundated homes and vast sections of land downriver with thousands of tons of hazardous material.

That was just the beginning. With a new focus on U.S. energy policy and the impact of climate change, coal, which emits huge amounts of carbon when burned, became branded as a major polluter to a wider audience. Then came the full impact of the recession. With lower electricity usage, power plants, one of the few remaining consumers of coal, required less coal. Then natural gas prices cratered and power generators started switching to gas, which was cheaper than coal at the time. Mountains of coal collected as supplies swelled. Coal companies cut back production, but the surplus mounted.

While “clean coal” was a rallying cry on the campaign trail for all candidates in 2008, reality hit in 2009 when nobody could predict when carbon capture and sequestration could work at a large scale. It is certainly not a realistic solution to cutting carbon output in the short-term.

While the coal lobby is still strong in Washington, it couldn’t stop the EPA from beginning the process of regulating greenhouse gasses and treating carbon dioxide as a pollutant, nor could it prevent the denial of some mountaintop removal mining permits. Even the market is starting to turn against coal. With the belief that there will be greater regulation of pollution and carbon, power companies cancelled the construction of new coal plants and began the process of shuttering old ones. North Carolina’s Progress Energy made news a few weeks ago when it announced it would close 11 coal plants over the next seven years.

Coal is getting it from all sides. While the industry is strong and its defenses are well capitalized, it is gearing up for the fight of its life.

No comments: