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 Post subject: 'War on coal'? Why Obama might not be industry's worst enemy
PostPosted: Wed Sep 26, 2012 8:56 pm 
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Joined: Thu Apr 02, 2009 7:16 pm
Posts: 478
Location: Anthracite Region of PA
By Mark ClaytonStaff writer
updated 9/26/2012

Deep in the heart of Ohio coal country, Mitt Romney and Paul Ryan are on a campaign bus tour that hits President Obama for environmental policies they say are responsible for shuttering coal-fired power plants and the mines that feed them.

It's a message that could resonate in Ohio and other coal-producing states. In a regional 30-second television ad aired last week called the "War on Coal," one coal worker says "Obama is ruining the coal industry." Another in a hard hat says White House policies are "attacking the coal industry." The ad features Mr. Romney telling ranks of miners, "We have 250 years of coal; why wouldn't we use it?"

Striking the same theme, the Republican-controlled House of Representatives on Friday passed a bill dubbed the Stop the War on Coal Act to roll back environmental laws that affect the fossil-fuel industry, although the Senate will almost certainly block it.

To be sure, environmental regulations designed to make coal-fired power plants cleaner are raising costs for the industry and having an effect, but the "war on coal" is coming less from the Obama administration than from natural gas, say some experts.

Coal-fired power plants and coal mines are being shuttered at an unprecedented pace mainly because the price of natural gas has dropped so far that it has made coal power uncompetitive. Specifically, electricity from natural gas power plants comes at less than half the cost of electricity from coal generators. As utility executives hustle to remain competitive in the deregulated marketplace, they are increasingly turning to the cheaper alternative, power market experts say.

Examples include:
•In PJM Interconnection, a 13-state electricity market that serves more than 60 million people from Delaware to Illinois, natural gas-fired power plants now run about 50 percent of the time – a statistic called "capacity utilization." A decade ago, natural gas-plant utilization was 15 percent.
•In the 11-state Midwest Independent Transmission System Operator grid, coal-plant utilization has fallen to 45 to 55 percent from 70 to 80 percent in 2010-11, according to RBN, a Houston-based energy market-research firm. Meanwhile, natural gas utilization averaged 35 percent this year, up from 10 to 20 percent in past years.
•In the first half of this year, 165 new power generators were added in 33 states, but among the 10 states with the bulk of new generating capacity, "most of the new capacity uses natural gas or renewable energy," the Energy Department's Energy Information Administration (EIA) reported in July. The trend is expected to continue, with natural gas-fired plants accounting for 60 percent of capacity additions between 2011 and 2035, EIA found. Coal is expected to account for 7 percent.
•While gas-fired power plants are popping up like dandelions across America, just one coal-fired generator was brought on line in the first half of 2012, the EIA reports. There were no new reports of planned coal-fired generators, and just one of 14 in the pipeline advanced from pre-construction to under-construction status, the agency found in its 2011 annual survey.
•Coal provided 45 percent of the nation's electricity in 2010, but is projected to fall to 39 percent by 2035, the Department of Energy estimates. Closures, combined with weak demand for electricity nationwide tied to the slow economy, have translated into less overall US demand for coal.
•Since January 2010, utilities have announced retirements for about 12 percent of the nation’s coal-fired generating fleet, according to a July study of power plant emissions by M.J. Bradley & Associates, an environmental consulting firm in Concord, Mass. Most are "small, old, and lack advanced pollution control equipment," the study found.

"Coal's problem is really that natural gas prices have come down, while coal prices have remained relatively stable and will be rising over the long term because of demand from overseas," says Christopher Van Atten, lead author of the M.J. Bradley report. "That's why it's been a pinch for them, that difference in price."

Retirements and a dearth of new coal-fired power plants will mean about 20.5 million fewer tons of coal burned between now and the end of the year than during that period in 2011 – a 7 percent drop, according to a new study by SNL Energy, a division of SNL Financial, a financial-news and data provider.

That's bad news for coal mine owners. Alpha Natural Resources, based in Bristol, Va., said Sept. 18 it would immediately shut down eight mines and lay off 1,200 miners across Appalachia. Alpha said that it ultimately expected to reduce its workforce by 9 percent. Kevin Crutchfield, Alpha's chairman and CEO, blamed both "a regulatory environment that's aggressively aimed at constraining the use of coal" and "the evolving demands of a changing global coal market".

For their part, coal-industry groups insist that the burden from Environmental Protection Agency regulations remains significant.

One EPA regulation will require costly filtering systems for many coal-fired plants to remove mercury emissions and other toxins, though the rule will not take effect until at least 2015 and the EPA is giving leeway beyond that date. In addition, an EPA rule restricting greenhouse gas emissions on new coal-fired power plants will start in 2013, though existing plants are exempt.

When it comes time for utility officials to decide whether to retire older coal-fired power plants, the prospect of hundreds of millions of dollars of scrubber and filter upgrades could loom large. The new federal rules will "prematurely" close 204 coal units in 25 states, says Mike Duncan, president of the American Coalition for Clean Coal Electricity. Many of those units are concentrated in the electoral swing states of Ohio, Pennsylvania, Virginia, and North Carolina.

Those costs could also factor in to decisions to retire about one-sixth of the nation's existing coal-fired generating capacity by 2020, the EIA said.

But how culpable are regulations versus broader changes in the energy market?

In the long term, the EPA regulations could become more of a factor, says Jesse Gilbert, senior industry analyst with SNL Energy in Charlottesville, Va., who authored its new study. But what is going on now has much more to do with coal becoming less profitable – regardless of EPA rules, he says.

"Why retire a [coal-fired] plant three years before any regulation requires it?" he adds. "What it comes down to is that these plants are just not economical to run anyway."

In January, Great River Energy, a North Dakota cooperative serving 650,000 customers in the upper Midwest, announced it would immediately mothball a new coal-fired power plant it had just completed at a cost of $437 million. Officials cited weakening power demand and competition from cheaper sources of electricity, such as wind and natural gas.

"We could run it – and lose money half the time," Rick Lancaster, vice president for generation at Great River Energy, told the Minneapolis Star Tribune.

And last year, Texas-based Luminant warned that it would have to shutter two of three generators at its Monticello power plant – one of the state's largest coal-fired plants – and three coal mines. Officials blamed a looming federal emissions law intended to curb sulfur dioxide and nitrogen oxide.

"To meet the rule's unrealistic deadline and requirements, Luminant reluctantly must take the difficult steps of idling two generating units and ceasing mining Texas lignite at three mines," the company said in a September 2011 press release.

In March, when those new EPA rules were struck down by a federal appeals court and the "EPA overlords" were defeated, according to Texas Attorney General Greg Abbott, the plant appeared to get a reprieve. But Luminant officials announced that two of the three generators would be shuttered for at least six months anyway. Low electricity prices – driven by market rate-setting natural gas plants – had made them uneconomical outside the peak summer season, they said.

"The reason we're looking to do this is due to persistently low wholesale power prices that have made these two units unprofitable except during the summer months," says Ashley Barrie, a company spokeswoman. "It doesn't make sense for us to operate these units at a loss."

"It had nothing to do with environmental regulations – this is purely an economic decision," Ms. Barrie says.

This story, "'War on coal'? Why Obama might not be industry's worst enemy," first appeared on

Scott K
"Watch Your Top"

 Post subject: Re: 'War on coal'? Why Obama might not be industry's worst e
PostPosted: Wed Oct 03, 2012 2:53 pm 

Joined: Sun May 03, 2009 4:49 pm
Posts: 87
Location: tennessee
this reminds me of walmart... before walmart came to my town we had a "Roses", "Freds", "KMart" and a host of other small stores, walmart moved in and were cheaper than everyone else... one by one the smaller stores closed, ending with the closure of the KMart here, then what happened... walmart built a supercenter, and closed the old location, then all the little independant stores that were in that strip mall closed since they didnt have walmart to draw people in anymore... now that walmart supercenter is here with no competition, the prices have been steadily climbing to all time highs, well beyond what the typical inflation rates would account for.

the gas companies arent stupid, okay, so the price might be lower right now... what happens after all these new gas power plants are on line? are the gas companies gonna sign a cap agreement to KEEP the prices low? not a chance! once they have us over a barrel... LOOK OUT!

besides all this, more than likely the reason the power companies are building gas plants is due the the regulation that is due to be dropped on coal fired plants... why would they build a plant that the EPA is gonna be on top of like white on rice when the can build a gas plant that wont raise as much attention. bottom line natural gas has a carbon footprint just like coal, it just doesnt release the particulates like coal does... carbon is carbon, right? if gas isnt carbon, then what is it?

i cry foul! its all a money racket, the politicians and big industry are just figuring the next way to cut into our pocket a little more!

rant over! :roll:

"cornbread and iced tea have took the place of pills and 90 proof."

 Post subject: Re: 'War on coal'? Why Obama might not be industry's worst e
PostPosted: Wed Oct 03, 2012 10:25 pm 
User avatar

Joined: Tue Sep 16, 2008 6:51 pm
Posts: 1418
Location: SW Indiana
One other advantage to Gas Turbine Units is they can come on and off line real quickly. Other than that I don't have any information.

I don't have all the answers.
I don't even know all the questions!

 Post subject: Re: 'War on coal'? Why Obama might not be industry's worst e
PostPosted: Thu Oct 04, 2012 1:17 pm 

Joined: Wed Jan 06, 2010 5:21 pm
Posts: 15
Location: ohio
Great rant!!! :D

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