Nations, States, Utilities Find It Hard to Stop Using Coal

Written by John Egan for Industrial Info Resources (Sugar Land, Texas)--There was a reason why coal became the dominant fuel for electricity generation during the 20th century: it was plentiful, inexpensive, and full of British thermal units that could be used to generate electricity. As the world warms, nations, states and utilities are all too aware of the need to decarbonize, but they are finding it hard to kick the coal habit, for exactly those same reasons that made it the fuel of choice for electric generation in the prior century.

In the Paris Agreement of 2015, the leaders of nearly 200 nations committed their countries to substantially reduce global greenhouse gas emissions in order to limit the global temperature increase in this century to 2 degrees Celsius while pursuing efforts to limit the increase even further to 1.5 degrees.

Scientists say the world has warmed about 1 degree Celsius since pre-industrial times, perilously close to the 1.5 to 2 degree C rise that is said could trigger irreversible changes in the planet that would make large swaths of it uninhabitable.

Since the Paris Agreement, innumerable conferences, federal and state laws, and corporate earnings calls have featured leaders reiterating their commitment to decarbonization, but with various end dates: Net-Zero by 2030, 2035, 2040 or 2050. Some industries are easier to decarbonize than others, but in general, the agreed-upon narrative has effectively become "carbon dioxide (CO2) emissions are Public Enemy #1 and we are committed to lessening them until we can eliminate them completely."

But the grand aspirational words of presidents, prime ministers, members of Congress, governors, public utility commissioners and CEOs have been undermined by one of the stubborn political and economic realities of decarbonization: coal use continues to rise, even as pledges to reduce it grow ever louder.

Coal will be used to generate about 17% of U.S. electricity this year and 16% next year, according to the June Short-Term Energy Outlook (STEO) prepared by the U.S. Energy Information Administration (EIA) (Washington, D.C.).

Click on the image at right to see an EIA graph of which fuels are used to generate electricity in the U.S.

Here are some specific examples of why it is hard to stop using coal:

• In the 2021 U.N. climate summit in Scotland, a draft communique was prepared committing countries to eliminate the use of coal by a specified date. But the final statement was watered down to allow countries to "accelerating efforts toward the phase-down of unabated coal power."
• In last month's G-7 meeting in Hiroshima, Japan, there was considerable wrangling among the leaders about "loosening commitments to phase out the use of carbon-emitting fuels such as gas and coal in time to avert the worst effects of global warming," according to a report in The New York Times. But in the end, the leaders of the seven of the world's largest economies--Canada, France, Germany, Italy, Japan, the United Kingdom, and the United States--"included language sought by Japan that blesses the continued investment of certain types of coal-fired power that the Japanese government is financing," the Times added.
• On May 10, Montana Governor Greg Gianforte (R) signed into law House Bill 971, which bars the state from considering climate impacts in any analysis of large projects such as coal mines and power plants. The new law builds on a decade-old law barring the state from including "actual or potential impacts that are regional, national, or global in nature" in its environmental reviews. Montana derives a significant portion of state revenue from extractive industries like coal mining and oil and gas production. The closure, or threatened closure, of coal-fired power plants in and around the state shaped drafting of HB 971.
• In passing the Inflation Reduction Act of 2022, which authorized $369 billion of federal investments in renewable energy, Congress inserted numerous sentences identifying CO2 as a pollutant that can be regulated under the Clean Air Act. For more on that, see August 24, 2022, article - U.S. Congress Defines CO2 as Pollutant. That specific designation was meant to overcome an objection by the U.S. Supreme Court weeks before that doubted whether an executive branch administrative agency, the Environmental Protection Agency (EPA) (Washington, D.C.), had the authority to regulate CO2 emissions in the absence of a specific congressional delegation of authority. For more on the Supreme Court ruling, see July 1, 2022, article - Supreme Court Kicks Clean Air Case Back to EPA.
• The EPA recently released a new draft regulation reducing climate-warming emissions from power plants. It has been extremely controversial to enact a regulation limiting power plant emissions that contribute to global climate change. This newest draft, like its predecessors under then-Presidents Barack Obama and Donald Trump, likely will be litigated by coal-state and Republican interests For more on that, see May 12, 2023, article - EPA Issues Draft Rule Regulating Power Plant Emissions.
• Legacy coal states Kentucky and Utah this year passed laws making it harder to close coal-fired generation. West Virginia this year enacted a law requiring the state to approve a utility's plan to retire power plants burning either gas or coal. And Wyoming has enacted mandates in recent years to push utilities to explore selling coal plants or installing carbon capture technology before shutting them.
• Reports from the International Energy Agency (IEA) (Paris, France) have documented the world's continued increase in coal, specifically in the developing world. Global coal use was expected to reach a record 8 billion tonnes in 2022, and the IEA fretted that continued growth was on the horizon. For more on that, see December 21, 2022, article - IEA: Global Coal Use Projected to Set a Record in 2022.
• Earlier this year, the EIA reported that U.S. coal shipments increased 2% in 2022 as power plants replenished stockpiles. Coal shipments to electric power providers have fallen over 50% since them.

Click on the image at right to see an image of U.S. coal shipments to power plant operators between 2010 and 2022.

"Predicting the death of coal and natural gas is one thing, but it's clear so far that fulfilling that prediction is something else," said Britt Burt, Industrial Info's vice president of research for the Global Power Industry. "We have tracked the closure of over 100 gigawatts of coal-fired generating capacity in the U.S. since 2010 or so, and we expect that number will continue growing in the coming years, especially if the draft EPA Clean Air Regulation issued earlier this year is sustained by the courts."

"But even that regulation doesn't outlaw coal--it could live on with carbon capture, use and sequestration (CCUS) technology," Burt said. "And even if the U.S. continues to reduce its use of coal to generate electricity, coal plants still are being built in great numbers in the developing world, mainly Asia, because demand for power is rising and coal is local, cheap and abundant."

Industrial Info Resources (IIR) is the leading provider of industrial market intelligence. Since 1983, IIR has provided comprehensive research, news and analysis on the industrial process, manufacturing and energy related industries. IIR's Global Market Intelligence (GMI) platform helps companies identify and pursue trends across multiple markets with access to real, qualified and validated plant and project opportunities. Across the world, IIR is tracking more than 200,000 current and future projects worth $17.8 trillion (USD).