Coal

Today I watched a former executive from the coal industry say that Obama’s new regulations will cause the loss of many jobs and prices of electricity to rise. He doesn’t understand what is happening any more than Obama. What the government is proposing will happen without them and sooner. Since the onset of fracking the supply of natural gas has increased and the price has decreased. The Environmental Protection Agency on Monday proposed a rule designed to cut carbon dioxide emissions from existing coal plants by as much as 30 percent by 2030, compared with 2005 levels. This regulation was passed so the government can jump on the bandwagon but this train has already left the station. The share of U.S. electricity that comes from coal is forecast to fall below 40% for the year, its lowest level since World War II. Four years ago, it was 50%. By the end of this decade, it is likely to be near 30%. What this means is that by the time the government set deadline of 2030 comes around there will be no coal fired power plants. What is happening as far as jobs is a temporary loss but soon the exports of coal to Africa will increase and these miners will be back to work. In the longer term these miners will be out of work as oil replaces coal in our exports to Africa and other countries. This is the downside to getting rid of coal. The long term process is coal to oil to natural gas and then one day to hydrogen. Coal will go the way of the buggy whip.