Log Out

Coal remains 'key,' but decline will continue, GAO says

CHARLESTON, W.Va. -- Coal will remain a "key fuel source," but the industry's share of power generation will continue to decline and Appalachian producers could be especially hard hit, according to a new report from the U.S. Government Accountability Office.GAO officials confirmed what the industry and coalfield residents have already seen:Utilities are closing older, less efficient and higher polluting power plants where upgrading emissions control equipment is not economical.And a collection of other market forces -- including cheap and increasingly abundant gas and competition from other coal basins -- will drive Appalachia's share of the U.S. coal market further downward.In 2010, Appalachia accounted for 31 percent of the nation's coal. By 2035, the region's share of production will drop to 24 percent, the GAO said, citing U.S. Energy Information Administration forecasts."This expected shift in coal production from the Eastern United States to the West represents an industry trend ongoing since the early 1990s that is influenced by each region's unique set of complex geological, mining and transportation characteristics," the GAO report said."For example, some stakeholders told us that demand for Western coal has increased primarily because it is low in sulfur content, and the region's coal reserves can be mined relatively inexpensively compared with Appalachian and Interior coal reserves, which are often more deeply underground and costlier to access," the report said. "Available information suggests that these benefits have made Western coal economically competitive with coal from the Appalachian and Interior regions, despite Western coal's lower heating value and higher cost to transport to some coal-fueled generating units."Sen. Jay Rockefeller, D-W.Va., requested the GAO report and his office was provided a copy on Oct. 29. GAO officials released the document Tuesday.In a statement issued Tuesday, Rockefeller said, "GAO did a thorough examination into what coal's future looks like, and the report reaffirms that coal will clearly continue to have an enormous role in our energy future, but it faces some serious near term challenges.
"We must do more with our efforts to invest in technology and make coal much cleaner if we are going to secure a strong future for our coal miners and their livelihoods, families and communities," Rockefeller said.The GAO said that the nation's coal-fired energy sector could become "less polluting" in the future, as power companies install controls on many remaining units."Regarding new coal-fueled units, these are likely to be less polluting as they must incorporate advanced technologies to reduce emissions of regulated pollutants," the GAO said. "Coal-fired capacity may decline in the future as less capacity is expected to be built than is expected to retire."At the request of the U.S. Environmental Protection Agency, the GAO moved sections of the report discussing coal's market challenges to the "highlights" section of the report."EPA stated that market changes, which we discuss in the report, would have significant impacts even in the absence of EPA's regulations," the GAO said. "We do not agree that the report was misleading, but given that the Highlights page may be read without the benefit of the fuller discussion found in the report, we moved language from the body of the report to the Highlights page about other factors affecting the use of coal."The GAO also said there are significant questions about the Appalachian coal industry's hope that increased coal exports can help make up for the decline in coal's share of the U.S. electricity market.
"Available information suggests that the future level of U.S. coal exports will also depend on how competitive U.S. coal prices are internationally and the extent to which the quality of coal available from the United States is in demand," the GAO said. "For example, metallurgical coal -- coal used for such activities as steel production -- has historically constituted a significant share of U.S. coal exports."Factors affecting the ability of other coal-exporting countries to economically and reliably supply coal to international customers include local freight rates, limits on the amount of exports, and extreme weather events -- all of which can influence the relative price of U.S. coal and, thus, the amount of U.S. coal exported," the GAO said.Reach Ken Ward Jr. at or 304-348-1702.
Show All Comments Hide All Comments

User Comments

More News