The Environmental Protection Agency's new greenhouse gas rules could hasten the decline of America's top source of electricity.
Today, the Environmental Protection Agency proposed a set of landmark greenhouse gas regulations that will surely have every coal country politician, from the hills to Appalachia to the Powder River Basin of Wyoming, sputtering mad. The rule will require new power plants to emit about 43 percent less carbon dioxide than today's coal-fired generators. Natural gas plants already meet this requirement. But if a utility wants to burn coal for electricity, it will need to install carbon capture technology -- and that's really expensive.
"This standard effectively bans new coal plants," one petulant lobbyist told The Washington Post.
And indeed, it could. But while that might be devastating for mining companies, it won't mean a whole lot to consumers. Coal use, you see, is already in decline. Blame America's natural gas boom.
In December, coal generated less than 40 percent of America's electricity for the first time since March 1978, according to the Energy Information Administration. Even before the proposed greenhouse gas rules, Deutsch Bank predicted it would be producing as little as 20 percent by 2030. And Exxon Mobil forecasts that natural gas will replace coal as the U.S. top fuel for electricity by 2025.
Part of the reason coal is having trouble keeping up with natural gas is indeed regulation. As the Economist notes, the Obama administration has already issued new rules limiting pollutants such as mercury and sulfur dioxide, which would require utilities to eventually upgrade old plants or build entirely new ones. The companies choosing to start fresh are opting for gas, which has dropped to historically low prices, and produces power more efficiently than coal.
Upshot: Regulations are pushing us from a cheap, abundant, and incredibly dirty source of energy, to a cheap, abundant, relatively clean source of energy. Unless you own a coal mine, that shouldn't be a problem.