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Page added on February 23, 2017

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Coal Is Just Too Damn Expensive


President Trump is ready to start signing executive orders that roll back Obama-era regulations on climate and water pollution:

While both directives will take time to implement, they will send an unmistakable signal that the new administration is determined to promote fossil-fuel production….One executive order — which the Trump administration will couch as reducing U.S. dependence on other countries for energy — will instruct the Environmental Protection Agency to begin rewriting the 2015 regulation that limits greenhouse-gas emissions from existing electric utilities. It also instructs the Interior Department’s Bureau of Land Management (BLM) to lift a moratorium on federal coal leasing.

….Trump, who signed legislation last week that nullified a recent regulation prohibiting surface-mining operations from dumping waste in nearby waterways, said he was eager to support coal miners who had backed his presidential bid. “The miners are a big deal,” he said Thursday. “I’ve had support from some of these folks right from the very beginning, and I won’t forget it.”

Will this put miners back to work? Not really, for a simple reason: bituminous coal is only barely competitive anymore with natural gas:1

Bituminous coal is the stuff that’s mined in Appalachia and the Eastern US. It’s what you think of when you think of coal miners. However, it’s faced price pressure for decades from surface-mined subbituminous coal produced with minimal labor in Wyoming and the rest of the West,2 and now it’s facing price pressure from natural gas too. Natural gas prices spiked in the aughts, partly due to Hurricanes Katrina and Rita, and just as those spikes began to subside naturally, hydraulic fracturing opened up vast new quantities of natural gas, forcing the price to plummet. Right now, natural gas is only a hair’s width away from being cheaper than coal.

Can Trump do anything about this? No. He can repeal all the rules he wants, but returning to, say, the 2014 price of coal just won’t make much difference. The price of natural gas is still going be competitive with, or lower than, bituminous coal—and a lot cleaner too. Besides, Trump also plans to ease rules on fracking, which will push the price of natural gas down too. Coal miners are unlikely to benefit from all this by any appreciable amount.

So who will? As usual, the answer is coal mine operators. The repeal of environmental rules won’t affect prices enough to make much difference in coal employment, but it will provide a nice chunk of pocket change for the folks who own the mines.

UPDATE: The EIA conversion factor I used for the amount of natural gas to produce 1 kWh is based on the average efficiency of steam and combustion turbine plants. However, combined cycle plants account for about half the gas fleet, so the average efficiency of natural gas plants is a bit higher than the EIA numbers suggest. I’ve modified the chart to account for this.

1Historical price of bituminous coal here. Recent price history here. Natural gas prices here. Conversion factors to kilowatt-hours here, reduced by about 12 percent to account for the fact that efficient combined-cycle plants make up about half the gas fleet. I’ve done a bit of massaging here and there in the recent data to make the entire series comparable. Nonetheless, these figures are still slightly approximate, especially for coal, which varies in price fairly widely depending on region and type.

2Wyoming produces 40 percent of all US coal but employs only about 7,000 workers.

Mother Jones

22 Comments on "Coal Is Just Too Damn Expensive"

  1. Antius on Thu, 23rd Feb 2017 2:32 pm 

    Air pollution from coal kills 50,000 Americans per year. That ain’t cheap. In risk management, we usually assume anywhere between $2-10 million should be spent avoiding a fatality. So coal is costing America $100-500 billion per year in human costs. Doesn’t sound so cheap does it?

  2. Apneaman on Thu, 23rd Feb 2017 2:34 pm 

    Give big coal massive subsidies, legislate a surcharge on NatGas, blow off every mountain top in West Virginia & Kentucky, strip mine the entirety of Wyoming and make Mitch McConnell Cancer Czar for life (give him a paper bag to put over that face-don’t want to traumatize the children).

    It won’t be long until everyone’s A/C is/needs to be running 10-12 months of the year. Oklahoma already had 100 & 99 degree days and wildfires in early February.

    Brazil Races Against Time to Save Drought-hit City, Dying Crops

    Brazil’s Poorest Region Suffers Worst Drought In A Century

  3. peakyeast on Thu, 23rd Feb 2017 2:42 pm 

    @Antius: The real big driver of costs is not death, but chronically ill people.

    The pollution brings all sorts of diseases with it. But they are difficult to measure.

    We had a commenters once: KaiserSomething – he liked to point this fact out.

  4. HARM on Thu, 23rd Feb 2017 3:03 pm 

    “Coal miners are unlikely to benefit from all this by any appreciable amount…
    So who will? As usual, the answer is coal mine operators. The repeal of environmental rules won’t affect prices enough to make much difference in coal employment, but it will provide a nice chunk of pocket change for the folks who own the mines.”

    The supreme irony here, is of course that coal miners and other blue collar white guys overwhelmingly voted for Trump. It will primarily be *their* waterways and mountain communities that get destroyed/polluted for generations. Their families and descendants will ultimately pay the price in the form of shorter lifespans and a degraded environment. And it will still not result in one additional mining job, much less “bring back” the 1950s economy.

    Those who are willing to trade their precious clean air and water for a little job security deserve neither.

  5. Plantagenet on Thu, 23rd Feb 2017 3:22 pm 

    It will be very difficult for Trump to increase FF production more then Obama did. US oil production rose by almost 5 million bbls/day under Obama, leading to a worldwide oil glut. The chances of Trump matching that are about zero.


  6. Jerome Purtzer on Thu, 23rd Feb 2017 5:00 pm 

    But but..The Donald is a Genius-just ask him. Or better yet, just wait 5 minutes and he will tell you again and again just how smart he is.

  7. Mark on Thu, 23rd Feb 2017 5:23 pm 

    The Donald is going to re-work the laws of thermodynamics, economics and restructure the geology under the US. It’s going to be TERRIFIC! guaranteed!

  8. Apneaman on Thu, 23rd Feb 2017 5:41 pm 

    Boston just set a new high temperature record

    “Boston set a new high temperature record of 66 degrees today as unseasonal February warmth spread across the region.”

  9. Apneaman on Thu, 23rd Feb 2017 5:46 pm 

    The real cost of coal is the mounting $$costs$$ of the mounting AGW consequences.

    Thousands Still Forced From Homes by Flooding in California Tech Hub

    San Jose drowns: 50,000 people are told to leave their homes as entire neighborhoods sink under water after worst floods for 100 years
    50,000 people were told to leave their homes in San Jose after Coyote Creek burst its banks on Tuesday

    14,000 residents are subject to a mandatory order while the rest have been given an advisory to leave

    Fire fighters woke residents in the middle of the night by banging on their doors to tell them to leave

    Some were rescued from their drowning homes in dinghies to be taken out of the danger zone

    Coyote Creek runs through Silicon Valley from the San Francisco Bay and rose to 13.6ft on Tuesday

    The floods are the latest in a string of emergency situations triggered by severe winter weather in California

  10. rockman on Thu, 23rd Feb 2017 6:39 pm 

    P – It will be very difficult for Trump to increase FF production more then Obama did. – “It will be very difficult for Trump to increase FF production more then Obama did.” Very difficult??? Are you f*cking nuts? LOL. You know damn well the fossil fuel industry has zero chance of doing anything close to as well as we did under President Obama.

    Crazy talk!!! Folks with such expectations during the Trump administration are going to feel rather silly in a few years. When President Obama took office oil was about $10/bbl LESS the when President Trump took office. And just 3 years after President Obama took office oil increased by $60/bbl. Anyone who thinks oil will be selling for $105/bbl in 3 years raise your foolish hand. LOL.

  11. Apneaman on Thu, 23rd Feb 2017 7:49 pm 

    What exactly did Obama do to increase US cancer extraction? Spend his weekends chipping in as a roughneck? Apply his lawyer skills to come up with never thought of efficiency gains? I really wish someone could tell me just what Obama did in his 8 years that caused more black liquid cancer to be extracted from the earth. I bet if Obama wanted to, he could have increased California’s Almond harvest or made Florida oranges more juicy. I’m not sure how they do it, but the POTUS seems to have magical powers to make industries increase their production. It’s a national secret I guess.

  12. Anonymous on Thu, 23rd Feb 2017 8:12 pm 

    Rockerman is like an inverted version of plantard ap. OCD Plantard likes to blame the ‘obama administration’ for everything(literally), including halitosis and the black plague in Europe during the 14th century. Plantard is probably also convinced that obama is (will) be responsible for our sun burning out and swallowing the earth, in ~ 5 billion years time.

    Rockerman, otoh, likes to invert plants retarded rants, by attributing every fraked well, and barrel of tar-sands goop extracted for the previous 8 years, also, to ‘obama’, …personally.

    What would have happened if that senile fool, whatshisname? Mccain super-fries had won? Probably the same thing? Yea, thats exactly what would have happened. Myself, I watched obama makes lots of pretty speeches, golf, predict who would win the stupid-bowl, make long faces at memorials to latest gun-massacres, stuff like that. Don’t recall see him spending much time forcibly injecting mystery-mix into poor peoples groundwater in pennsylvania or anything like that.

  13. Apneaman on Thu, 23rd Feb 2017 8:36 pm 

    Oil and gas wastewater spills alter microbes in West Virginia waters

  14. rockman on Fri, 24th Feb 2017 10:15 am 

    Apneaman – “I’m not sure how they do it, but the POTUS seems to have magical powers to make industries increase their production.” It must be true: look how many folks are predicting President Trump will bring the boom back to the oil patch. You’re implying they don’t know what the f*ck they’re talking about.

    Shame on you. LOL.

  15. rockman on Fri, 24th Feb 2017 10:17 am 

    Anonymous – Are you understanding the Rockman’s posts better now? LOL.

  16. Anonymous on Fri, 24th Feb 2017 1:32 pm 

    No, sorry, but you have missed the ‘point’ entirely, likely intentionally, but thats your problem. Its another quirk of the dysfunctional amerikan mind, to attribute so much, to one individual they call the ‘president’. So your continued insistence on crediting something call ‘obama’ for every litre of tar sludge goop and paint-thinner you guys processed into an oil-like commodity, is as senseless as plantards OCD drivel.

    You do remember who actually owns uS presidents, right?

    Silly question, of course you don’t remember inconvenient(and obvious) truths.

  17. rockman on Fri, 24th Feb 2017 3:30 pm 

    Anon – “…but you have missed the ‘point’ entirely, likely intentionally, but thats your problem.” I don’t mean to be rude but sometimes you seem to be a clueless boob. LOL. Maybe it’s just your knee jerk prejudice because I’m in the oil patch that you can’t see the sarcasm in my posts that’s obvious to so many here. Some folks use “sarc” so the dense don’t miss the point. I don’t since I figure if a person can’t see the reality then that’s on them. LOL.

    I even gave you a hint: “Are you understanding the Rockman’s posts better now?” and you still don’t get the joke. And “that’s on you.” Not sure about Apneaman but I think he’s starting to catch on. For instance I suspect he understands the Rockman doesn’t believe in abiotic oil despite the numerous times I professed absolute belief in it.

  18. Anonymous on Fri, 24th Feb 2017 7:07 pm 

    You repeatedly offer up the opinion that something called ‘obama’ was the prime-mover in ALL uS oil extraction over the last years, and you always follow it up, with, any other president sitting in the ceremonial WH would hard pressed to match ‘obama’s performance in this regard.

    Its one of your bread and butter claims. There has never been, or will be, any hint of ‘parody’ or ‘sarcasm’ in that little observation of yours, nor have you once(except now maybe, indicated it ever was). And the reason for that is, your are not trying to ‘funny’, you clearly believe that obama is singularly unique in this regard. You are, however, in all fairness, not unique in attributing actions which the figurehead-in-chief could not possibly influence or impact except perhaps in the most remote way. It seems to be a feature of amerikans, not a bug, to assign almost every event, as somehow leading (ultimately) back to the ‘president’. It hardly seems to matter if such connections are tenuous at best, or simply non-existent. You cant help yourselves. I think its a holdover from that homily, “the buck stops here” one of your past figureheads liked to use. Amerikans, have embraced that little homily as if its revered wisdom from on high.

    Nor do I ever recall you cracking jokes about your fellow texass creationists belief in abiotic oil either. Maybe you have here or there?, But you sure like talk about obamas role in cranking out record amounts of the tar-goop like he was injecting the fraking juice himself.

    There is good reason for you, or anyone not blabbering on about ‘abiotic oil’. Talking about that clearly moves anyone doing it, into wingnut territory. I think the only ones that believe that shit are the class A retards here, like boat and plant. No milage to be made pretending anyone ‘thinks’ abiotic oil is the real deal.

  19. DerHundistlos on Fri, 24th Feb 2017 11:09 pm 

    @ Anonymous

    Thus the name, “Planter’s Wart”.

  20. DerHundistlos on Fri, 24th Feb 2017 11:15 pm 

    @ Like a Rock

    Please keep in mind that it may be difficult for non-native English speakers to follow your sardonic subtleties. Please appreciate I’m not being critical….

  21. Anonymous on Sat, 25th Feb 2017 5:23 pm 

    Rockerman isn’t being ‘sardonic’ when it comes to his obama is the king of all oil extractors schickt, man grow up.

    Yea its hard to follow something that never existed in the first place, language has nothing to do with it. Maybe your problem isn’t a language barrier, but something deeper…

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