Coal Makes a Comeback

No, coal energy is not making a comeback. Coal production has been increasing since 2012, and it's projected to continue to rise. But coal power plants are not being built at the same rate - instead, natural gas plants are taking their place.

What's happening right now is that coal producers have increased production and supply while demand has decreased somewhat due to competition from natural gas plants and renewables such as wind and solar power. This will eventually lead to higher coal prices so it makes sense for companies to invest in more production now before prices increase later on because of scarcity of raw materials like coal.

This is not a case of coal energy making a comeback. While production goes up, investment in new plants is not happening at the same pace. In fact,  this report  by the Energy Information Administration says that "plans for new coal capacity are about one-third of what they were five years ago."

The demand for American coal has been on the decline for decades now, and increased production from Asia makes it even less necessary in the U.S.   This Business Insider article  from last year points out that a lot of the American coal that gets exported to China will end up being burned by Chinese power plants instead of being used as fuel in U.S. power plants.

But it's not just China that is pushing for more coal power plants - India also wants to build more of them as this BBC article points out. In fact, coal is predicted to surpass oil as the number one fuel for generating electricity in India by 2030.

The increasing demand for coal overseas is not going to make a comeback in the U.S., but it will likely result in much higher prices at the mine and up through the supply chain until finally hitting consumers' utility bills. This is something many environmentalists have pointed out will happen, but no major news outlets are reporting on it because they don't want to admit that their narrative is a myth.

So, if that's not a comeback, what is it?

Sources: 1. http://www.carbonbrief.org/blog/2016/03/28/smoking-gun_coal-renewables-uldge-raises-dispute 2. http://www.epa.gov/energyshotcenter/report3 3. https://www.eia.gov 4. http://www.greenworldtoday.com 5. https://www.eia.gov 6 . http://www.usatoday.com/story/news/politics/2016/03/22/grid-lock-coal-nukes-vying-replace-rural-electr icity-plants/82016050/# 4:32 PM

Kevin said...

Maeve said...

Exactly. What they really mean to say is "Coal production is increasing." This was also mentioned in the article, but it was just buried in several layers of text. 8:15 PM

Anonymous said...

In my opinion coal has no place in a modern society that wishes to leave its children a livable planet. Coal is simply too dirty and too damaging to allow any further development of this fuel source. And of course the climate change deniers will not be happy until the entire planet is covered in coal so they can say, "I told you so." 9:16 PM

Marc said...

Y'all haven't been paying attention. The US has been increasing coal production since about 2012. But all the lies in the world won't make a lie, a fact. Coal is dirty and if you think it's going to be clean when being used as fuel for electric power plants get your head checked. 9:43 PM

dave said...

"The demand for American coal has been on the decline for decades now, and increased production from Asia makes it even less necessary in the U.S. This Business Insider article  from last year points out that a lot of the American coal that gets exported to China will end up being burned by Chinese power plants instead of being used as fuel in U.S. power plants." Good God! You really do have an Anti-American worldview. It's not natural gas, it's not renewables, it's the increased domestic production of coal because the market demands it. That demand has been increasing since 2012 and is forecast to continue increasing over time because: 1) Demand is growing 2) Production of coal-based fuels has been increasing 3) Economic growth will continue in the US 10:35 PM

Bob said...

Read the article three times, then you might spot it. A couple of caveats re: US coal production: "the demand for American coal has been on the decline for decades now...so that new production is mostly going to Asia" It's worth noting that Chinese demand is booming. So if there was enough unused capacity at U.S. coal plants, which is unlikely given their age (1930s-1960s), then domestic production could increase even more than it already has, leading to a continued decline in domestic use but increased exportable coal sales overseas. A similar dynamic occurs with Canadian oil sands exports because there's not enough spare capacity to accommodate rising oil demand from the US and Canada. So even though the US has a lot of oil production, it is not self sufficient and it relies on oil imports from Canada. If that wasn't the case, the US would be complaining about rising oil prices too instead of blaming OPEC and their cartel. And finally, "While production goes up, investment in new plants is not happening at the same pace. In fact,  this report  by the Energy Information Administration says that "plans for new coal capacity are about one-third of what they were five years ago."" Well yes because many of them have been cancelled after billions of dollars were already sunk into them. The economics don't work anymore because natural gas and renewables have undercut coal. It's a bit of hyperbole to call this "a sea change" because... you know... "sea change" is an exaggeration in any case. But the point is that it's not a coal comeback, whatever the author means by that. 10:46 PM

Jerry said...

Bob, You wrote: "I thought the article did a good job of showing how renewable energy sources are not only now dominating new installations but are providing significant new power output as well as displacing more traditional energy sources, most notably coal." I think it did a good job at showing how renewables aren't displacing coal and given their wind doesn't blow all the time and solar doesn't work at night and is really expensive.

Conclusion: It's still fossil fuel: "Even if renewables were taxed like coal, the message would not change, because renewables are not displacing coal and nor can they. The future will be made up of both increasing demand for energy and increasing production of electricity, but that is how it has always been done."

What I didn't understand was how he ended the article with this quote: "And while production goes up, investment in new plants is not happening at the same pace. In fact,  this report  by the Energy Information Administration says that "plans for new coal capacity are about one-third of what they were five years ago.""

If you only read that paragraph, you would think that U.S.