Coal: Hope in the Face of Pressure?

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The coal industry has experienced substantial economic turmoil over the recent past, including bankruptcies – most recently by Peabody Energy Corporation – but also by Arch Coal, Inc., Walter Energy, Inc., and Patriot Coal Corp. Generally, the industry and associated users of coal, have attributed these problems to the designated “War on Coal,” the fashionable pejorative characterization of policies of the Obama Administration. Popular as it is among these groups to blame all the industry’s woes on the Administration, this may well distract from the real cause. Business and investment analysts commenting following the recent Peabody bankruptcy filing lay the blame primarily at cheap natural gas prices. (EE News) It seems reasonable to conclude that cheap natural gas prices have served to speed up the conversion of many power plants from coal to natural gas while the prospect of clean power regulations have served as a catalyst since emissions from natural gas are markedly lower than from coal burning. This current dynamic between coal and natural gas in the effort to provide energy for the nation’s immediate needs is playing out against a backdrop of interest and efforts to develop renewable energy sources sufficient to meet those needs at some point in the future.

That said, there is continuing research into the use of coal and particularly into methods which might allow coal to be used while markedly reducing emissions. A recent article describing a non-thermal plasma system makes the case that “clean” coal is not necessarily an illusion. (Environmental Leader).

While sufficient renewable sources of energy able to meet demand appear to be a hope, rather than a certainty, consumption of fossil fuels will remain significant and important to sustaining our economy. Natural gas seems poised to meet an increasing part of that demand, but the prospect of emerging technology may also provide a continued role for coal in the energy mix.

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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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