The Real Cause of Coal's Collapse
Natural gas has surpassed the once-dominant fuel source – and it's here to stay.
By Mark Perry | Contributor
March 9, 2017
Despite President Donald Trump's pledge to revive the struggling U.S. coal industry, coal plants continue to close. And there's really nothing he can or should do about it.
Recently, the Najavo Generating Station in Arizona, the largest coal plant west of the Mississippi River, announced that it will close in 2019, a decade earlier than originally planned. The plant is just the latest coal facility facing premature retirement as part of a shift away from coal that now seems irreversible.
Even as legacies of the Obama administration's environmental policy – most notably the Clean Power Plan and the Stream Protection Rule, both thorns in the side of the coal industry – are rolled back, coal's future still looks bleak. Although coal accounted for 30 percent of U.S. electricity production last year and is the preferred fuel of some heavy industries, the number of coal plants is shrinking and coal's contribution to generating electric power has been in steady decline for years. Utilities are shuttering older coal plants, and there are no plans to build new units.
To grasp just how much has changed, consider this historic energy milestone: Just a decade ago, coal provided roughly 50 percent of the fuel used to generate the nation's electric power while natural gas accounted for less than 20 percent -- and those shares had been pretty stable since the early 1970s (see nearby chart). But thanks to the shale revolution and a bonanza of cheap natural gas, the share of electricity generated from natural gas rose above 20 percent in 2007 and has climbed steadily since then. It reached an all-time high of nearly 34 percent last year and surpassed coal's share (30.4 percent) for the first time ever.
In fact, even as cheap natural gas is powering our economy, carbon emissions from electricity production are at their lowest level since the early 1990s. Simply put, the carbon intensity of the electricity sector has dropped dramatically.
As U.S. natural gas output surged ...
What's remarkable is that, despite growing demand for natural gas – from the power sector, from manufacturers and now from exports – natural gas prices are falling. Natural gas delivered to generators averaged...