Ben R. Williams for the Martinsville (Va.) Bulletin:
The reason that the coal industry is in trouble isn’t solely because of government regulations; it’s largely because the free market is turning away from coal.
The Pittsburgh Post-Gazette recently ran an interesting op-ed from David Schlissel of the Institute for Energy Economics and Financial Analysis. The piece was titled “Coal will not recover: Falling prices for other fuels, not regulation, is what’s killing coal.”
As recently as 10 years ago, Schlissel writes, coal-fired power plants provided half of America’s power needs. Today, the number is closer to 30 percent, and it’s falling rapidly.
Sure, there are federal regulations that require coal-fired power plants to undergo costly upgrades. But one would think that if coal has a bright future, as the industry so often claims, the owners of these plants would be willing to pay for these upgrades.
But instead, many plant owners are unwilling to upgrade because it just doesn’t make financial sense for the future. Even in states like Texas, one of our nation’s biggest electricity markets, coal plants are on the verge of closure because they can no longer compete with alternative fuel sources, such as natural gas, wind and solar.
Regarding wind and solar, the conventional wisdom has long been that they are nice ideas, but they’re too expensive to be workable. However, that’s changing rapidly. According to Schlissel, since 2009, wind prices have fallen from more than $60 per megawatt-hour to less than $30. That puts pressure on market prices, and it makes coal-fired electricity seem less and less financially viable, particularly when one considers that coal must be laboriously mined from the earth while the sun and wind come to us free of charge.
Obviously, coal isn’t going to disappear tomorrow. But Schlissel argues that the end is inevitable, not avoidable, and it’s hard to argue with the evidence he presents in the full piece.
I understand why this is upsetting news. I’ve been to West Virginia. I have seen the ruined towns left in the wake of closed mines, towns that look like they were transplanted from a third world country. I understand that there are families that have worked in the industry for generations, and it is deeply unfair that their largest local employers are shrinking and shutting down.
But at the risk of sounding glib, when the American free market turned away from whale oil, did politicians blame the government’s overly strict whaling regulations?(In fairness, politicians in the late 19th century probably did just that, but it didn’t save the whaling industry.)
If we view the coal industry as a sinking ship, then we are left with two options: We can continue bailing it out, or we can work to put the crew on a new ship. We can train coal miners for other occupations, even energy-related occupations, such as natural gas, wind and solar.
Our focus should be on making sure that people have jobs and that the U.S. has the energy it needs, rather than getting hung up on where that energy is coming from. Whether the power is generated by coal, hydro, solar, wind, or a hamster on a wheel, the result is the same when you flip on the light switch.
Full column: We should be providing jobs, not saving industries