Mark Sumner on The Daily Kos points out that the coal industry faces more than government regulations – it faces effective competition:
About 33 percent of all the electric power in the United States comes from burning coal. Which sounds like a lot, and it is. But here’s the thing—less than a decade ago, it was 50 percent. What happened in the interval wasn’t Obama starting up a war on coal. It was fracking for natural gas.
And coal jobs? They are well and truly fracked. Forever.
In that decade, fracking made natural gas cheap and abundant. It also made earthquakes common in some of the most previously stable regions of the nation, polluted aquifers, and had a marginal effect on climate change … but put that aside.
In the summer of 2008, natural gas cost over $12 per million Btu. That was about three times as much as the equivalent energy from coal. At the time coal was 50 percent of the nation’s electrical production. Natural gas, about 20 percent.
Gas has many advantages over coal. In particular, a gas-powered power plant can be built much more cheaply, at a smaller scale, and added to incrementally. Coal also has to be stockpiled on site, and the ash it produces has to be stored after it’s burned. Coal is simply a mess to deal with.
Plus, to be cost effective, a coal plant needs to be massive, and to operate for decades. The investment is in the billions. A gas plant can start off a thousand times smaller, grow slowly over time, and can potentially recoup its investment much more quickly. The investment is in the millions.
The American coal miners should think about getting out of the business, like the Aussies are working on.
