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Proposed EPA rule offers little help to coal industry

December 11, 2018 GMT

Too little, too late. Locking the barn door after the horse got out. Use whatever old saying of that type you wish. If you’re talking about the most recent attempt to help the coal industry by easing its regulatory burden, it applies.

Last week, the Environmental Protection Agency’s acting administrator proposed a rule change to loosen an Obamaera regulation that would have required cutting-edge carbon capture technologies for new power plants that burn coal. The order must undergo a public comment period before it can be adopted. Even if it is adopted, it would not offer much help to the coal industry.

About 93 percent of the coal mined in the United States is used to generate electricity. The generating sector of the electricity industry is increasingly dominated by natural gas and renewable sources as coal-fired and nuclear power plants are retired.

The Energy Information Administration, which tracks energy production and use, said in a report issued Dec. 4 that it expects total U.S. coal consumption this year to be about 691 million short tons, which would be 4 percent less than last year and the lowest level since 1979. The EIA forecasts that 2018 coal consumption will be 44 percent lower than its peak in 2007.

The Obama-era rule requiring carbon capture virtually prevents new coal-fired plants from being built. The idea is to remove as much carbon dioxide as possible from smokestack emissions. With existing technology, carbon capture is expensive and requires a significant part of a power plant’s output to accomplish. American Electric Power experimented with a carbon capture system at its Mountaineer plant in Mason County several years ago, but it could not afford to continue it without a large increase in the rates it charges consumers. Under current market conditions, removing the carbon capture rule will not accomplish much. Maybe if the price of natural gas soars or if the availability of renewable sources crashes, coal might — might — benefit. Even so, by then, much of the coal-burning fleet we relied on a dozen years ago will have been retired because of age, and new coal-burning plants would be years away.

Utilities built most of the existing coal-burning fleet. In the past couple of decades, changes in federal laws have allowed independent companies to access the power grid. Most of those companies built newer, smaller plants that use natural gas or renewables. One exception is Longview Power, which built a modern coal-fired plant near Morgantown.

Utilities aren’t interested in building coal-fired plants anymore, and neither are the vast majority of independent companies that cannot rely on state utility commissions to guarantee them a return on their investment.

One result of this is that 2018 will be the second-largest year in a decade for the retirement of coal-burning power plants, the EIA says. The largest year was 2015, when a set of regulations kicked in and hastened the retirement of older plants that were already scheduled for retirement at the end of this decade.

No new coal-burning plants are on the horizon in this area. Two recent attempts in Meigs County, Ohio, failed. Government can do only so much to keep uneconomical plants running.

The EPA does not expect any new coalfired capacity to come on line from now through 2035.

To mix metaphors, coal has an uphill battle if it wants to keep its head above water.