3 Hints That Coal Is Here to Stay

Source: Thinkstock

Source: Thinkstock

Energy concerns are a major topic today — indirectly, in discussions of the 2 degree Celsius climate change deadline and issue with Russia, as well as directly, such as with the delay on a Keystone XL pipeline decision. But there is one subject in the energy industry that isn’t changing despite the emphasis on natural gas — and that’s coal. As Consul Energy President Nick Deluliis told The Wall Street Journal, “Coal’s future is strong; it’s just not a growth story.” Of course, some would be less conservative in their projections on coal’s role in the future, but let’s take a look a few signs that show this much, at least, is true.

1. Bloomberg vs. Boehner

Bloomberg published a piece in February on closure of over 150 coal boilers, stating that Bloomberg New Energy Finance projected that 263 more would likely see the same fate, and addressing the retirement of almost a fourth of the U.S. coal fleet before the decade is up. The reasons given for the closures had to do with more stringent emission regulation and natural gas competition, or poor conditions of equipment.

All of this sounds bad, however, logistically it may not be realistic, and there is political motivation to prevent to great a slump in coal. Mike Ricci, writer for Speaker of the House John Boehner, discussed these findings, as well as coal’s importance during the winter. He said that cuts in the coal industry to the extent to which Bloomberg was predicting would end in “higher prices and too much demand on natural gas too quickly,” and referenced the House’s passage of the March 2014 “Preventing Government Waste & Protecting Coal Mining Jobs in America Act.” While the bill isn’t likely to get through the Senate, it does show a significant opposition to those emissions standards that would be a detriment to the coal industry.

Source: Thinkstock

Source: Thinkstock

2. Clean Coal and International Industries

If coal is an inevitable energy requirement, which many argue it is — based upon natural gas limitations and coals position in both India and China — then the next concern is how to reduce the effects of this. In a balance between the environment and economic interests, the environment is unlikely to win out, at least at this juncture. That is why clean coal has become a subject under discussion — it indicates that there is likely a significant amount of coal use to be cleaned up after in our future.

According to Wired, the International Energy Agency has given estimates that Beijing’s coil fired power plants will be doubled by 204o. “Coal is too low-cost, too plentiful, and too available from reliable sources to be replaced. China is putting in solar and wind power at a tremendous pace, but it will have to use more and more coal just to keep up with rising demand,” said John Dean, fuel analyst and president of JD Energy, to Wired. China is not the only one facing such considerations, especially with CCS (carbon capture and storage) or “clean coal,” a marketable solution to the industry’s environmental problem.

Source: Thinkstock

Source: Thinkstock

3. Energy Outlook

The U.S. Energy Information Administration (EIA) has a great deal of data released about the coal industry at present, as well as projections for it in the future, and most of the information is pretty clear on coal remaining a major part of the energy industry. “The competition between coal and natural gas in electricity generation is expected to continue in the near term, particularly in certain regions,” EIA said in its 2013 outlook. “However, because natural gas prices are projected to increase more rapidly than coal prices, existing coal plants gradually recapture some of the market lost in recent years.”

While it does point to a future decrease, saying that in 2040 there will comparably be more dependence on natural gas, its note that other projections have different sectors, other than the electric power sector, showing an increase in coal “that offsets declining consumption for electric power.”

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