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EIA: Coal production would fall to 1980s levels under Clean Power Plan

Coal mined in the U.S. would fall 25 percent by 2024 if rules aimed at slashing carbon emissions go into effect, according to a recent analysis from the federal government’s energy numbers cruncher.

By 2040, the U.S. Energy Information Administration report says, the nation would mine 20 percent less coal than it would without rules to cut emissions that cause climate change. That would be 10 percent below 2014 production levels — levels last seen in the 1980s.

The analysis paints a grim outlook for coal producers already struggling with big losses due to cheap natural gas, other environmental rules and stagnant global demand for coal used in energy and steel production.

But the EIA thinks a sharp downturn during the early years of carbon limits would be made up, somewhat, in the 15 years after 2025. The forecast is based on an expectation of growing demand for electricity and higher prices for natural gas.

By 2024, Western coal production, much of it in Wyoming’s Powder River Basin, would fall 21 percent from last year’s levels. It would be 34 percent lower than 2024 forecasts that exclude the environmental rules. Gradual increases over the next 15 years would still leave mining in the region 19 percent below the EIA’s business-as-usual case.

In related news, Oil and gas turn their backs on coal as climate deal nears

St. Louis-based Peabody Energy, which announced job cuts this week, and Creve Coeur-based Arch Coal are both heavily invested in Powder River Basin coal, the largest U.S. source for the fuel and a top choice for power plant operators because of its low sulfur content.

Interior basin coal, concentrated in Southern Illinois, would still grow 14 percent above 2014 levels by 2040. However, production would fall initially as power plants cut coal use over the next decade, and they would be 30 percent lower than EIA projections absent the rule.

St. Louis-based Foresight Energy is one of the top Illinois coal producers, and Peabody and Arch both have mines there. The state’s production was expected to grow over the next quarter-century because more power plants now have pollution controls that can burn the higher-polluting coal.

The Obama administration’s new environmental rules, known as the Clean Power Plan, are expected to be finalized by August. However, the final rules could look far different from the initial proposal that the EIA used in its analysis.

Regardless, any limits on carbon dioxide are expected to result in a shuttering of many coal-fired power plants, the electricity industry’s largest emitters of greenhouse gasses.

Overall, the EIA estimated the plan would increase electricity prices 3 to 7 percent between 2020 and 2025 compared to baseline predictions, but the impact lessens over the next decade. By 2040, efficiency measures under the carbon rules are expected to actually reduce electricity spending despite a slight increase in the price per kilowatt hour, the EIA says.

Jacob Barker — 314-340-8291

@jacobbarker on Twitter

jbarker@post-dispatch.com

This article was written by Jacob Barker from St. Louis Post-Dispatch and was legally licensed through the NewsCred publisher network.

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