EnergyCoal's decline driven by technology, market forces – not policy
Many people – and many politicians — attribute coal’s decline to the clean-air policies of the federal Environmental Protection Agency (EPA) through rules that the agency applied to electricity generation plants. A new study points out that largely because of court challenges, EPA clean-air regulations did not change until 2015 — twenty-five years after President G. H. W. Bush signed amendments to the Clean Air Act in 1980. For eighteen years following new EPA rules, coal continued to thrive — until 2008, when its production peaked and then declined 23 percent in the next seven years. The study found that the decline is correlated with the shale revolution that began to be fully felt in 2007-2008, after which cheap natural gas outcompeted coal markedly.
Many people – and many GOP politicians — attribute coal’s decline to the clean-air policies of the federal Environmental Protection Agency (EPA) through rules that the agency applied to electricity generation plants.
Dr. Walter J. Culver, founding board member o the Great Lakes Energy Instituteat Case Western Reserve University, and Dr. Mingguo Hong, Associate Professor of Electrical Engineering and Computer Science at CWRU, recently published an article in The Electricity Journal that explores why coal production in the United States has declined dramatically, in line with over 90 percent of it being used for electricity generation and its decline there.
The authors point out that largely because of court challenges, EPA regulations did not change until 2015 – twenty-five years after President G. H. W. Bush signed amendments to the Clean Air Act in 1980. For eighteen years following new EPA rules, coal continued to thrive, until 2008 when its production peaked and then declined 23 percent in the next seven years.
CWRU notes thatthe authors found that the decline data are correlated with the shale revolution that began to be fully felt in 2007-2008, after which cheap natural gas outcompeted coal markedly. The authors consider gas’s techno-economic pluses as well as state regulations in electricity generation, and conclude that coal will continue to be displaced largely by natural gas in the nearer term.
Wind and solar generation are also increasingly competitive with coal, lacking only cost-effective electricity storage (batteries, really) to be a threat to coal in most regions. Ominously for coal, batteries are benefitting from significant R&D that is beginning to yield utilities-capable products.
“Some people attribute the decline in coal-generated electricity to the EPA’s air-quality rules, even calling it ‘Obama’s war on coal,’” said Hong. “While we can’t say that the EPA rules have no impact — as, for example, discouraging the building of new coal power plants because of the expectation that tougher air-quality rules will clear the courts — the data say the EPA rules have not been the driving force.”
