The marketplace is turning from coal
By Editorial Board,
“I LIKE COAL,” Mitt Romney declared during last Wednesday’s presidential debate.
Both candidates have catered to coal-state voters, but Mr. Romney has been particularly full-throated in his pandering. Not only did he back the “clean coal” myth last Wednesday; in August he promised Ohio coal miners that he would save their jobs. “We have 250 years of coal,” Mr. Romney said then. “Why in the heck wouldn’t we use it?” His explanation for trouble in coal country is that President Obama has a wayward obsession with regulating the economy, resulting in an unnecessary “war on coal,” a term that popped up again last month in one of his campaign advertisements.
Mr. Romney is wrong on almost every point. The coal industry cannot and should not continue operating as it has, and Mr. Obama is not the reason. Cheap natural gas has gutted the economic case for burning coal. Climate change and coal-related pollution explain why that’s a good thing.
Natural gas is coal’s primary competitor, and with the increasing use of hydraulic fracturing to extract gas trapped in subterranean shale formations, its price has plummeted. Power companies used to dispatch gas-fired electricity last because it was the most expensive. Now the chief executive of Duke Energy, the country’s largest electric power holding company, says his firm uses coal as a last resort.
A study from the Brattle Group finds that coal use is more sensitive to the price of gas than to new government regulations. It projects that 59,000 to 77,000 megawatts of coal-fired power will come offline over the next five years, more than its 2010 estimate, despite the fact that, under Obama, the Environmental Protection Agency’s coal-plant regulations turned out to be more lenient than the researchers had expected. The power plants’ reason: low electricity demand and low natural gas prices. Brattle also calculates that a $1 drop in the price of gas would double the magnitude of coal-plant closings over the next five years.
Even if the price of natural gas rises somewhat, it will still be a major component of any rational, medium-term climate-change policy, since the transition from coal to gas is technologically easy and coal is particularly dirty. Part of the reason the EPA has written so many rules affecting coal is that burning it produces many types of pollution — not only carbon dioxide emissions that contribute to warming but also a noxious mixture of fine particles and gases, encouraging heart attacks, asthma and other ailments, which tax the economy in hospital costs, sick days and early death.
When the economics of energy help to redress environmental and public-health problems, the country’s leaders should cheer. They also should help those who depend on the industry prepare for transition, not tell them fairy tales.