So now we know that when President Obama says he wants an “all of the above” strategy for energy, “the above” doesn’t include the energy source in which America has the biggest advantage over the rest of the world: coal.
Last week, the Environmental Protection Agency announced a new regulation that, if enacted, will effectively outlaw the building of new coal-fired electricity-generation plants. In its proposed rule — which, by the way, is 257 pages long – the agency says it is using a “common-sense approach to reducing CO2 and other [greenhouse-gas] emissions, which by causing climate change, pose a serious threat to public health and welfare.”
The EPA’s proposal defies common sense in several ways. I will focus on two of them: the essentiality of coal both here in the U.S. and around the world, and the negligible effect that this move will have on global carbon-dioxide emissions.
Coal has been an essential fuel for electricity production in America ever since Thomas Edison used it in the first central power plant on Pearl Street in lower Manhattan in 1882. Coal provides about 45 percent of domestic electricity, with natural gas providing about 24 percent and nuclear 20 percent. The balance comes from hydroelectric power and other renewables.
While it’s true that coal has been losing market share in the U.S. to natural gas over the last few years, regulators need to keep a diversified portfolio of fuels in the electricity-generation mix to help avoid unexpected price shocks from reductions in supply. And that’s where coal’s value becomes apparent: The U.S. has about 237 billion tons of coal reserves — about 28 percent of the world’s known deposits. That’s 241 years of supply at current rates of domestic consumption.
Since one ton of coal contains about as much energy as three barrels of oil, U.S. coal reserves total about 711 billion barrels of oil equivalent.
America isn’t the Saudi Arabia of coal; it’s the entire Middle East of coal. U.S. coal deposits contain about the same amount of energy as the oil reserves of Saudi Arabia, Iran, Iraq, Kuwait, and the United Arab Emirates combined.
And yet now, in the name of doing something — anything — about climate change, the Obama administration wants to keep much of that coal locked underground by outlawing new coal-fired power plants. That’s not going to work. Proof of that can be seen by looking at the latest coal-export data. Between 2005 and 2011, U.S. coal exports increased by more than 60 percent to nearly 80 million tons. And those exports are almost certain to continue rising. Peabody Energy, the giant St. Louis–based coal producer, is planning to export some of the coal it produces from its Wyoming mines to China. The company is already shipping some of its domestically produced coal to India.