Word on the Street: Coal is Dead

May 3, 2014

But then, technically, so are zombies.

Christian Science Monitor:

The Supreme Court upheld Tuesday a 2011 federal rule governing the amount of air pollution some states can let drift across their borders into their downwind neighbors. The 6-2 ruling is a win for the Obama administration, which has leveraged executive powers to curb pollutants from the nation’s power sector. Under Tuesday’s ruling, some 28 Midwestern and Southern states will have to cut emissions of sulfur dioxide and nitrogen oxide from coal-fired power plants.

Supporters of the law cheered the ruling, saying it would protect millions of Americans from pollutants that have been linked to public-health issues. Critics of the White House’s climate action plan have likened it to a “war on coal,” threatening an industry that supplies about 40 percent of the nation’s electricity.

Coal’s outlook remains bright abroad, where it is largely fueling developing economies, and new technologies could make the world’s most polluting fuel a viable option in a low-carbon economy. But Tuesday’s Supreme Court decision is the latest in a series of blows to coal’s future in the United States, and foreshadows pending rules that would have an even greater impact on the industry.

Perhaps the greatest existential threat to US coal comes not from federal regulations, but from decades of innovation that have unlocked a natural gas bonanza in the US. As production has ballooned over the past five years, prices have fallen, leading many utilities to shift from coal-fired power plants to ones that run on natural gas.

Even if Tuesday’s Supreme Court ruling further dims coal’s future, coal is nonetheless expected to make up 32 percent of US electricity production in 2040, according to the US Energy Information Administration (EIA). Coal’s outlook is even better abroad, where China, India, and other rapidly expanding economies are eager customers for the inexpensive fuel. World coal consumption is expected to rise at an average rate of 1.3 percent per year through 2040, according to EIA.

That’s bad news for the environment. With the highest carbon content of all the fossil fuels, coal makes up about 44 percent of global carbon emissions, according to the Paris-based International Energy Agency. It is also a major source of sulfur dioxide and nitrogen dioxide, the two pollutants under consideration in Tuesday’s ruling.



Investors in coal-burning utilities are brushing off a decision by the U.S. Supreme Court this week that gave federal regulators more power to control air pollution.

Time, they say, is on their side.

It will be years more before utilities feel any pain from new rules as companies, lawyers and regulators wrangle over how to apply restrictions and fresh legal challenges work their way through lower courts.

In the meantime, power companies already have been upgrading their coal plants to meet stricter pollution limits, while phasing out older plants that have no chance of making it.

“We expect the Supreme Court decision to have a very limited impact on the U.S. coal-fired fleet,” said Hugh Wynne, an analyst for Sanford C. Bernstein & Co. Improvements already made to comply with previous pollution limits mean new targets will be met “with relative ease” by the time they are implemented, he said in an interview.


12 Responses to “Word on the Street: Coal is Dead”

  1. omnologos Says:

    Coal mostly died 300,000,000 years ago.


  2. CSIPR was prompted Eastern States Complaining about Midwest coal pollution drifting eastward and causing those states to exceed pollution limits. The Eastern states cried foul and pointed West, and rightly so. The EIA’s projection of coal use in 2040 reads like a FF commercial. Coal dropped from 50% to 37% from 2005 until now. Despite this, EIA projection shows no future decreases as coal stays flat at todays levels despite lagging demand, increasing coal prices, and the CSIPR ruling that will undoubtedly shutter many coal plants. Take a look at the chart. It shows natural gas growing for 25 years. Compare that to production in the Marcellus, Barnes, and Eagle Ford and consider the rapid depletion rate. Only the Marcellus has growth, the rest are slowing down. EIA projections on renewables are a shameful sham. Despite double digit growth today, many are projected to stop growing today, and not begin to grow again for several decades. In reality, renewables are growing fast and will supply a large amount of the void created by coals exit. A simple projection of PV solar growth and wind growth would show a relatively large amount of generation from renewables compared to false EIA forecasts. Anyone interested in doing a realistic chart?



    • dumboldguy Says:

      Why are you always complaining about the IEA projections? Even if they are “off” to some extent, world population is still growing at an unsustainable rate, and maintaining economic “growth” in the developing world will keep coal consumption up. Stop looking at percentages in the U.S. and realize that the statement below means that coal use will double in about 55 years at that 1.3% annual rate and that 2040 is 26 years away. HUGE increases in renewables starting from a very small base will not overcome FF use soon even if FF use declines, because the FF base is so large to begin with. Project out the CO2 increases into the future—-do we have time?.

      “World coal consumption is expected to rise at an average rate of 1.3 percent per year through 2040, according to EIA”.

      • Because EIA projections are not ““off” to some extent”. They predict no new wind for 16 years. Does that seem off? No. Its crazy ridiculous. Why? There is a discontinuity in the graph starting from time the chart was made. Thats nuts. Anyone doing even a cursorily decent job would have kept the trends at the same slope to keep continuity.

        -PV Solar installations stop in 2016 and do not resume for 12 years and even then at a rate significantly below current rates.

        – Construction of wind farms ceases in 2016 and does not resume for almost 20 years.

        To get an idea of how woefully bad EIA projections have been, look at these graphs.

        Every single EIA projection of solar and wind has been readjusted upward annually from 2005 to 2012. It seems as if their growth projection estimates are based on linear growth, not exponential growth. It seems almost ludicrous that they have been unable to notice that wind and solar are growing exponentially. Its one thing to have trouble with no historical data. Its another when the historical data is there and yet there is a consistent inability to accommodate it for years. To go forward from today with a projection that no growth happens in wind and solar for decades is beyond absurdity. It smacks of something else.
        What makes you think Chinas economic growth will be maintained? Its already off in China. How can China maintain economic growth in the face of the air pollution and water scarcity? It can’t. And it won’t. It has reached a limit to growth. Now it has to retrench. This does not mean China will not burn coal and foul up the world in the process. China is going through the same development that all regions have. The cycle equivalent to Industrial Revolution, pollution, labor unrest,… culminating in leveled off population, more advance methods of pollution control and lowered energy per gdp. Steady state. Just don’t count on EIA projections to sort it all out. They are completely unreliable. Virtually useless. They lend an air of inevitability despite their lack of credibility.

  3. redskylite Says:

    Not related to coal but BP dealing with spills again, this time in Alaska on snow (which presumably is very dark). Do we really need new Arctic oil wells ?


  4. andrewfez Says:

    There’s a running joke about Cramer in the investment world that goes something like: whatever he recommends, do the opposite and you will make money. I’ve made money with CSX, but i would never, ever invest in anything that has to do with extraction – that’s just a bad bet. Fracking – another bad bet. GE – that’s a very good bet.

    • rayduray Says:


      I concur about Cramer. He’s toxic waste. His role in life is to seduce ignorant retail investors to be the suckers as Cramer unloads stocks for the schemers up in the corner offices.

  5. rayduray Says:

    There’s plenty of interest in the Pacific Northwest to create export terminals for Montana and Wyoming coal. Even if the U.S. retires much of its coal generation, there’s still plenty of CO2 to be dumped in the atmosphere from plants burning U.S. coal in Asian generating stations.

    The Sierra Club, Michael Bloomberg and others have joined forces in something called Beyond Coal.


    There’s plenty of citizen opposition to new coal export terminals. Time will tell who prevails.

    • dumboldguy Says:

      Yep, there’s already a significant amount of coal shipped from Seattle, and it’s all “steam” coal headed for Asia. The eastern coal that is shipped out of Norfolk VA (40% of all U.S. coal exports go from there) and Baltimore MD is 2/3+ metallurgical coal and only 1/3 steam coal. We have 120+ car coal trains coming down out of WV by the dozens every day. (And it’s ironic that the western coal is shipped east to be used in power plants not far from where the export coal is mined)

      “…there’s still plenty of CO2 to be dumped in the atmosphere from plants burning U.S. coal in Asian generating stations…” is one of my big worries, and I wonder how much CO2 is produced when the metallurgical coal is “coked” for use in steel making?

      “There’s plenty of citizen opposition to new coal export terminals. Time will tell who prevails”? Good luck to us all. There is a lot of turmoil right now in British Columbia and Washington State over this—-you’re closer—what’s happening? I’ve read that the folks in WA have won a few battles but that it’s not going that well in BC—the FF folks are pushing for dozens of coal and tar sands oil terminals.

  6. Coal is cheap. If you don’t mind using the air as a sewer. So if there is a short term economic gain, how can FF be left in the ground? How can this mad rush to growth that sucks every last drop of planetary sustenance from the earth on a fly now, pay later plan be stopped? Its one thing to have the means to create a sustainable existence, its another to confront the enormity of the social and cultural resistance to change. The slavery to growth and consumption has its consequences. We cannot rely on economics to “keep it in the ground”. This is the fundamental dilemma of our generation.

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