Natural gas has always had a yin-yang relationship with coal. When coal’s fortunes were on the rise, as they were only a few years ago, the long-term role of gas as a U.S. power plant fuel was being questioned—there simply wasn’t enough gas in the ground, some said. Now, with the shale revolution and a push to slash greenhouse gas emissions, coal is frequently portrayed in a death spiral, with gas the clear victor. But it is not that simple. Today, we examine the ongoing interplay between the electric industry’s two favorite fossil fuels, and whether coal is heading out or hanging on—and what it means for natural gas producers.
Coal-fired power plants in the U.S. have generated more megawatt-hours (MWh) of electricity than their natural gas-fired counterparts since the electric industry was founded more than 130 years ago—except for one recent month (April 2015) when gas for the first (and so far only) time edged out coal as the power sector’s fossil fuel of choice. Coal’s long-time, stubborn dominance shouldn’t be forgotten as the U.S. begins implementation of the newly final Clean Power Plan (CPP), which calls for the power sector to reduce its emissions of carbon dioxide (CO2) by 32% (from 2005 levels) by 2030. Coal plants emit near twice as much CO2 as gas plants (206 pounds/MMBtu, compared with 117 for gas), so they’ve been viewed as the CPP’s primary target.
A closer look, however, suggests that the talk about coal’s demise (to paraphrase Mark Twain) may be exaggerated. Natural gas-fired power plants certainly have taken on an increasingly important role: through the early 2000’s, coal units as a whole were typically generating two or three times as much power each month than gas units, but in recent years gas has been catching up, and now nipping at coal’s heels according to data from the Energy Information Administration (EIA - see Figure 1). There are two primary reasons for this: tightening environmental rules and the increasing availability (and lower price) of gas. This world is quite different than what was envisaged just 10 years ago when the consensus was that U.S. natural gas production had peaked, and that we should make plans to import vast amounts of liquefied natural gas (LNG) and to build scores of new coal plants to keep the lights on.
Join Backstage Pass to Read Full Article
About the song
“Torn Between Two Lovers” was written by Peter Yarrow (of Peter, Paul & Mary fame) and Phillip Jarrell. It appears as the fifth song on side two of the 1976 debut album of the same name by Mary MacGregor. The song about a love triangle was recorded at Muscle Shoals Studio in Alabama and released as a single in November 1976. It went to #1 on the Billboard Hot 100 Singles chart and has been certified Gold by the Recording Industry Association of America. Personnel on the record were: Mary MacGregor (lead vocals), Berry Beckett, Tim Henson (keyboards), David Hood (bass), Roger Hawkins (drums), Ken Bell (acoustic guitar), David Campbell (string arrangements, conducting), and Ginger Holladay, Lisa Silver, Sheri Kramer (backing vocals).
The album Torn Between Two Lovers was recorded in 1976 at Muscle Shoals Studio in Sheffield, AL, and produced by Peter Yarrow and Barry Beckett. Released in November 1976, it went to #3 on the Billboard Country Albums chart and #17 on the Billboard 200 Albums chart. Three singles were released from the LP.
Mary MacGregor is an American pop singer. She started her professional career in 1975 as a backing vocalist for Peter Yarrow on tour and appeared on Yarrow’s Love Songs LP. Yarrow helped to secure a record deal on Ariola Records for the singer and a production deal for Yarrow and Muscle Shoals musician Barry Beckett to produce her debut album. She released four studio albums and 10 singles. In 1980, she won Best Song at the World Popular Song Festival in Tokyo. MacGregor retired from the music business in 2000 and lives with her husband and children on a ranch in central California.
Comments
Although the author writes that nat gas's "piece of the pie" will remain roughly stable @ a bit over 30%, he doesn't say (unless I missed it) if the overall size of the pie will be growing, stable, or shrinking. For instance, will increased efficiency reduce demand or will that be offset by more plug-in cars? And do we know what percentage of solar will be distributed vs. utility scale? Does the 30% estimate for gas account for this? Thanks.
In reply to How much will overall electrical generation increase by 2030? by Mark Spiegel
In its Clean Power Plan supporting documents, EPA estimates that electricity usage in the U.S. will remain almost flat, at about 4.1 million gigawatt-hours (GWh) today, in 2020, 2025 and 2030. So the "power pie" will be no bigger in 15 years than it is now. There's no mention of future consumption by electric vehicles (presumably, that and any other growing energy use would be offset by improved energy efficiency), and no mention of how much solar capacity in 2030 will be utility-scale vs. smaller projects (there's sure to be a lot of each type).
In reply to Reply to questions by Housley Carr
"For the most part, natural gas producers don’t give a hoot whether their product is being burned at an existing gas plant or a new one. They just need to know that there’s going to be a growing demand for their product through the 2020’s and into the 2030’s..."
...and I guess it then seems there WON'T be "growing demand" (except for a tiny increase in market share)-- just "stable demand." Again, thanks.
IMO, and after looking at age of most of the retired or soon to be retired coal fired plants is that they are old. Many are past life expectancy.
On July 6, 2014 the Guardian published an article "Solar has won. Even if coal were free to burn, power stations couldn't compete". Home solar installations are creating a market where the marginal price from late mornign to early afternoon is negative in addition to the negative pricing at night. CAISO expects the same phenomena on their grid by 2020. See the Duck Curve at CAISO's web site. Cost wise to the Australian customer the solar installation that covers 1/3 to 1/2 of annual electric usage is the most profitable. this guts the peak earning hours for coal plants. Coal is much slower to dispatch than naturla gas so when load drops coal is stuck selling at a loss mid day and midnight.
As non-nuclear submarine technology (which has made submarine batteries obsolete) begins to move into the electric utility space the way nuclear went from the USNS Nautilus to power plants, coal will face further erosion of market. These are submarines like the German/Italian U212A class and the French SMX Ocean class that can operate for weeks without recharging the electric power supply using Air Independent Propulsion. This removes the negative price market from wind and solar by allowing storge of excess renewable power not for hours, as limited by batteries, but months. AIP has been operational at sea for 10 years, the storage technoplogy for hdyrogen/oxygen at a GWH scale has been available for over 30 years with operators like Phillips 66. AIP also responds to fluctuations in electric demand in the matter fo a few 1/10ths of a second instead of a few hours.
Coal also faces a huge write down in reserves this year just as the banks will force the oil operators to write down reserves. In 2008 the USGS revised the rescoverable reserves for the Powder River Basin downward after receiving core data from the coal bed methane gas wells drilled in the basin. In areas adjactent to current mining, increased overburden as seams trended down dip more rapidily than thought and thicker ground water reservoirs lay above the seams that had not been previously recognized brought downward revisions. Base on $18 /ton 30 billion tons were recoverable. In 2010 this was revised to 5 billion tons based on $9/ton. Today's cash price is $6.50/ton and the reserves are being mined at 400 million tons per year a 10% in annual decline. For those of us who can remember the late 1960's and early 1970's in the Texas and Louisiana gas markets, no one was doing reserve studies and every one assumed that 20 cent /mmbtu natual gas would go on for ever. As we learned in the 1970's and early 1980's higher prices bring demand destruction. Demand is not elastic.
Operational considerations for system dispatchers make coal the least desireable fuel as it is very slow to respond to changing load. Add to that the coal units use twice as much water for cooling (and evaporation) as combined cycle Ntural Gas plants and single cycle gas turbines use almost none. Todays single cyle gas turbines ar enow 20% more efficient on a btu basis than a Rankine coal unit. Combined cycle plants are 80% more efficient. At todays $2.61 per mmbtu Powder River coal deliverd to the plant would have to price at $29/ton. Freight rates are $25/ton. Deliverd prices abvoe $30/ton sends coal to the bottom of the dispatchers order of merit.
Coal is in the same position as whale oil for lamps after Drake discoverd oil at Titusville. Regulations will simply hasten coal's demise.
Coal is a 19th Century technology trying to compete in the 21st Century