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Coal Not Going Away, GAO Reports

But Reduction of Demand as Energy Source is Likely


Coal Miner

Coal Miner

Ralph Orlowski/Getty Images
Updated January 02, 2013
While its use may continue to decline, coal - even with all of its inherent environmental concerns -- is likely remain a key fuel source for generating electricity in the foreseeable future, according to an analysis by the Government Accountability Office (GAO).

Coal Good

Aside from being a key fuel source produced totally within the United States, coal remains a major contributor to the nation's economy. According to the Energy Information Administration (EIA), the U.S. coal industry employed more than 86,200 workers in 2011. Despite the dangers involved, those coal workers produced more than 1 billion tons of coal, and more than 90 percent of this coal was used to generate electricity. In addition, the United States exported 107.26 million tons of coal to foreign nations at a price of 148.86 per ton in 2011.

In 2011, 1,387 coal-fueled electricity generating power plants generated about 42% of the nation's total power demand.

Finally, the U.S. has plenty of coal left to meet future demand, as the EIA reports the U.S. has the largest recoverable coal reserves in the world.

Coal Bad

According to the GAO report, Electricity: Coal is Likely to Remain a Key Fuel Source, production of coal in the U.S. has been falling after peaking in 2008, mainly due to declines in the use of coal to generate electricity. As you can imagine, this trend has caused concern among communities, and economies that rely on coal mining and generation of coal-fueled electricity.

No small portion of the decline in then demand for coal within the U.S. can be attributed to coal's well-publicized environmental dark side.

According to the Environmental Protection Agency (EPA), the emissions of sulfur dioxide and the greenhouse gas carbon dioxide coming from coal-fired power plants have been linked to a plethora of respiratory illnesses, not to mention global warming and climate change.

Environmental Impact on Coal Production

One result of coal's bad environmental wrap has been a steady increase in federal regulations forcing coal-fired power plants to significantly reduce their sulfur dioxide and the greenhouse gas emissions.

In response, several power companies have announced plans to completely retire some of their coal-fired power plants and convert others to natural gas. In addition, those power companies planning to retain their coal-fired power plants say the EPA-required pollution control measures will reduce the amount of electricity they will be able to produce from coal.

In addition, GAO reports that 30 states already have laws or regulations requiring power companies to increasingly rely on renewable sources for electricity and proposals for similar laws have been introduced at the federal level.

GAO's analysis suggests that power companies may retire up to 24% of their coal-fired generating capacity by 2035.
Also See: EPA Approves WV Mountaintop Coal Mining Project
While power companies will continue to build new, less-polluting coal-fired power plants, GAO projects that the number of these new plants will be far exceeded by the number of coal-fired plants retired.

EIA estimates cited by the GAO show that while the amount of electricity generated using coal is expected to remain relatively constant through 2035, total U.S. coal-fueled electrical generation will fall from 42% in 2011 to 38% by 2035.

The Worst Case Scenarios for Coal

In final analysis, GAO suggests the future of coal in the United States depends on the price of natural gas - the electrical industry's alternative to coal - and the stringency of coming environmental regulations.

For example, GAO projects that if natural gas prices rise and remain high, coal's share of U.S. electricity generation will fall to 40% by 2035. If natural gas prices fall even further, only 30% of U.S. electricity generation would be fueled by coal in 2035.

But the EPA could paint even bleaker pictures for coal. If future EPA regulations were to require coal-fired power generators to reduce their plants' that reduce carbon dioxide emissions by 46%, GAO estimates coal's share of U.S. electricity generation would fall to 16% by 2035.

Should the EPA require a 76% reduction in carbon dioxide emissions, coal's share of U.S. electricity generation could fall to a negligible 4% by 2035, says the GAO.

All of the EIA and GAO forecasts for coal demand in the GAO report account for probable increases in the nation's future requirements for electricity.

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