When coal was king, it fueled more than half of the nation’s electricity. It fired up American industry and powered an ever-growing variety of household appliances and electronics. And American presidential hopefuls paid homage to coal, courting mine owners and miners whose unionized ranks once numbered more than 400,000.
Barack Obama was no exception. As a state legislator in 2004 and again as a U.S. senator, he supported proposals for huge federal subsidies to turn coal into motor fuel and ease America’s reliance on oil imports. “With the right technological innovations, coal has the potential to be a cleaner-burning, domestic alternative to imported oil,” Obama said in June 2007.
All of that has changed. On Monday, the Obama administration takes on the coal industry with the final version of rules it has dubbed the Clean Power Plan, a complex scheme designed to reduce, on a state-by-state basis, the amount of greenhouse gases the nation’s electric power sector emits. The main target: coal.
Today, more people in the United States work jobs installing solar panels than work in the coal industry. Ideas for using liquefied coal for cars never materialized. Industrial users have become more efficient. And coal’s share of electricity generation is waning, with natural gas and renewable energy taking its place. Only a handful of coal power plants have been built in recent years, and the Sierra Club keeps a tally of canceled coal-fired power plants like trophies on the wall.
The reason for the focus on coal is that it remains the largest U.S. producer of greenhouse gases at a time when President Obama is striving for an agreement at the December climate summit in Paris. In March, the United States submitted its own goal to the United Nations, vowing to reduce by 2025 U.S. greenhouse-gas emissions by 26 percent to 28 percent below 2005 levels. Trimming coal emissions must be a part of that.
The president has been leaning on other world leaders one by one — from China, India, Brazil and more — to make commitments to slash emissions. China pledged to a peak year for emissions; India came up with daunting renewable-energy targets; and Brazil said it would protect rain forests that absorb vast amounts of carbon dioxide.
But while the president has made inroads abroad, he has had to fight a rear-guard action at home, where Republicans, led by Senate Majority Leader Mitch McConnell (R-Ky.), have accused him of waging a “war on coal” — and the jobs that go with it. Obama has said his energy policy is an “all of the above” strategy, and his energy secretary, Ernest Moniz, has encouraged Southern Co. in its effort to build a highly efficient coal plant that would inject carbon dioxide emissions into old oil fields to enhance recovery and store the carbon dioxide there permanently.
But carbon capture and storage is costly. Moreover, natural gas is suddenly cheap. And utilities have been turning to natural gas, especially since oil and gas companies using fracking techniques have figured out how to tap vast natural gas resources locked in shale rock.
Natural gas emits about half the greenhouse gases as coal does during combustion. Obama has talked about natural gas as a “bridge” to a renewable future, and increasingly, Obama’s “all of the above” strategy has looked like an all-but-one strategy.
The executive branch can impose its will on states and utilities because of the Clean Air Act. The legislation was intended to reduce emissions of sulfur dioxide, nitrogen oxides and mercury that cause soot, exacerbate asthma and damage brain cells. But on April 1, 2007, the Supreme Court ruled that carbon dioxide was also a pollutant and therefore subject to regulation by the Environmental Protection Agency.
As president, Obama initially supported a different way to restrict carbon dioxide emissions: a cap-and-trade system that would have tried to harness market forces within a set of administrative rules. But that did not pass in the Senate. Another approach, restricting carbon emissions by taxing them, has never garnered much support in a Congress opposed to any tax increases.
That has left the Obama administration with the regulatory option and put it on a collision course with McConnell. The Republican leader has urged states to rebel against the EPA plan, just as he encouraged states to withhold their cooperation with the Affordable Care Act. In the end, ironically, the states trying to assert their opposition will sacrifice the flexibility they have under the Clean Power Plan. The EPA is setting targets, but states can come up with their own strategies. If the states refuse, only then will federal regulators impose a plan of their own.
In the end, the Republican resistance to the EPA’s Clean Power Plan should find little basis in law. Whatever the quality of the EPA’s plan may be, it has a legal responsibility to press ahead.
In its 2007 ruling on whether the EPA could — indeed, must — regulate carbon dioxide, the Supreme Court said: “Agencies, like legislatures, do not generally resolve massive problems in one fell swoop, but instead whittle away over time, refining their approach as circumstances change and they develop a more nuanced understanding of how best to proceed.”
“Foes of the Clean Power Plan have admitted they hope to ‘gum up the works’ for the EPA with their barrage of litigation. But they are likely to lose,” David Doniger, director of the climate and clean air program at the Natural Resources Defense Council, said in a statement.
The business world understands this well, whatever the politicians might say. And many utilities have been changing their mix of fuels not only to meet earlier EPA regulations and renewable quotas adopted in more than half of U.S. states, but also for their own business reasons, cutting costs and boosting profits.
Duke Energy, for example, has retired 40 of its older coal units across the Carolinas and the Midwest since 2011 and replaced them with natural gas plants and “state-of-the-art” coal plants that are more efficient. In Florida, Duke has invested more than $3 billion in new generation, allowing for the retirement of half of the state’s coal-fired fleet by 2018, the company said. The company is also investing in some renewable projects.
All this talk about killing coal hasn’t helped coal mining companies. Over the past 15 months, Walter Energy Inc., Patriot Coal Corp. and James River Coal Co. have filed for bankruptcy, hit by particularly sharp drops in coal used in the manufacture of metallurgical coal needed for making steel. Alpha Natural, a major supplier to power plants, is teetering and is contemplating bankruptcy, too, according to Bloomberg News.
Still, coal isn’t done yet. The arithmetic of electricity is challenging. The EPA is trying to reduce electricity use while the country’s population and gross domestic product keep growing — no small feat. Although the Clean Power Plan leaves room for nuclear energy, high capital costs and long construction times have kept nuclear plants off most drawing boards. Only five are under construction; they will just barely offset a handful that closed recently.
But there’s no question that the outlook for coal has changed. Although the National Mining Association says coal plants generated 57 percent of U.S. electricity as recently as 1988, coal-fired power plants still provided a more modest 34 percent of electricity generation in the first five months of this year, according to the Energy Information Administration. (Wind accounted for 4.4 percent in 2014, the EIA says.)
Coal advocates liked to call the United States “the Saudi Arabia of coal.” Today, however, the vast U.S. reserves are more often described in accounting terms as “stranded assets,” meaning that a portion will never be tapped. Coal still provides much of the energy needs of the United States, but it has lost its throne.