Coal was hit with a potentially bigger environmental blow in March when the EPA issued guidelines that could limit greenhouse gas emissions from new power plants as early as 2013. Once the guidelines go into effect, no coal plants will be built unless utilities can develop a cost-effective way to capture carbon dioxide, analysts say. That technology has been slow to develop and is very expensive.
"Even without the EPA rules, coal is not really competitive," Wang says.
Coal executives are hardly giving up. Nick DeIuliis, President of Consol Energy, a coal and natural gas producer based in Canonsburg, Pa., doubts the EPA's restrictions on greenhouse gases will survive long term because of the economic harm he says they will inflict.
Consol and other U.S. coal companies hope to be able to keep mines active by exporting more of the country's huge reserves. Last year U.S. coal exports hit a record 107 million short tons. High grade coal that is used to make steel is in particular demand in developing countries such as China, India and Brazil.
DeIuliis says the price of natural gas will rebound over time and that coal will once again account for half the nation's electricity. "This is a cycle," he says.
The futures price of natural gas hit a 10-year low of $1.91 per thousand cubic feet in April. It closed Tuesday at $2.23 but would have to more than double from there to convince utilities that have a choice of fuels to return to coal whenever possible.
Utilities are forecast to burn 808 million tons of coal this year, a 13 percent decline from last year and the fewest tons since 1992, according to Energy Department data.
Demand for coal has fallen even faster than the environmentalists who have been lobbying against coal had anticipated.
Bruce Nilles, director of the Sierra Club's Beyond Coal campaign, says the shift was accelerated by the low price of natural gas. That, along with tougher environmental rules and alternatives such as wind and solar will keep the pressure on coal. "We won't go backwards," he says.
Jonathan Fahey can be reached at http://twitter.com/JonathanFahey .
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