Coal news and updates

The amount of electricity generated by natural gas dropped 14% in the first seven months of the year while coal use rose, according to government data that underscore the possible impact of planned new Washington regulations on power plants.

 

While natural gas is playing a bigger role in power generation relative to coal than it did a few years ago, the trend isn’t necessarily inexorable. When natural-gas prices swing upward, coal can regain ground.

 

That’s what happened in the first seven months, as power generated by coal rose 7.5%, according to the Energy Information Administration. Coal accounted for 39% of all U.S. power generation in that period, compared to 27% for natural gas.

 

If market forces are giving coal a greater role, that raises the stakes for federal regulation. The Obama administration said this month it plans to impose strict greenhouse-gas standards on new power plants, effectively ruling out new coal-fired plants using conventional technology. The Environmental Protection Agency is also starting to develop new standards for existing power plants, which could reduce the use of coal plants even further.

 

“Removing coal from the picture should justify concerns of more troubling volatility to come,” said Luke Popovich of the National Mining Association, a group that represents coal companies.

The Environmental Protection Agency, backed by environmental groups, says it isn’t necessarily anticoal so long as power producers turn to carbon-capture technology to reduce emissions–a technology the agency calls feasible.

 

President Barack Obama’s climate plan, announced in June, aims to reduce carbon emissions by 17% by 2020, when compared to 2005.

 

“Outside the noise of the Beltway, the rest of the country knows that climate change is real, and they know that we have to act. If anything, Washington needs to catch up to the rest of the country,” said Heather Zichal, President Obama’s adviser on energy and climate change, in a Washington appearance Wednesday. She said the administration aims to make its guidelines for existing power plants final by the summer of 2015.

 

Together coal and natural gas account for about 70% of U.S. power generation, but price swings frequently alter the mix. The rise of hydraulic fracturing sent natural-gas prices plunging as low as $2 per million British thermal units in April 2012, leading to a surge in natural-gas use by power plants in 2012.

 

Now natural gas is trading around $3.50 per million BTUs–well above last year but below historic levels. Use of natural gas correspondingly has dropped off compared to 2012 but is still higher than earlier years.

 

Source: WSJ