Analysis: Coal is weakening without help from the EPA

Feb 19, 2013

American Association for the Advancement of Science
American Association for the Advancement of Science

Coal is weakening its dominion over the energy market, and according to a presentation at the American Association for the Advancement of Science, new EPA regulations are not to blame.

Wyoming lawmakers including Sen. John Barrasso and Rep. Cynthia Lummis have pointed to what they call President Obama’s war on coal as the reason for declining coal production.

But David Schlissel of the Institute for Energy Economics and Financial Analysis -- who led the presentation -- says other factors are responsible.

“The construction of new coal plants became very expensive,” Schlissel says. “Second reason is that the demand for electricity in the US was not growing as fast as was previously experienced. And the third is late in 2008, 2009 natural gas prices collapsed and as a result other alternatives were cheaper than building the coal plant.”

Schlissel says coal prices will continue to go rise over the long-term, which would further exacerbate the risk of investing in coal.

In Wyoming, coal production in 2012 was down 9-percent from the year before.

Schlissel says coal has been under severe financial risk since the middle of the last decade, if not earlier.