LOBBY HEAD CALLS FOR CAUTION IN COAL-TO-GAS SHIFT

Tamar Hallerman
GHG Monitor
1/18/13

The head of one of D.C.’s most active coal industry lobbying groups this week urged power generators to tread cautiously when considering the switch from coal to natural gas capacity. In a Jan. 16 speech, National Mining Association President Hal Quinn argued that utilities should be weary of switching to gas given the commodity’s history of price volatility. “If recent history teaches us anything, it reminds us to be humble when making big bets on future outcomes,” he said. “It wasn’t too long ago [when companies were] pouring lots of money into new natural gas plants, only to regret that when prices spiked.”

Quinn instead urged decision-makers to consider replacing old, inefficient coal units with newer supercritical or ultra-super critical coal technology in order to maintain diversity in the power grid and protect against price shocks. “What I’m suggesting is that businesses and policymakers who are betting on stable and competitively-priced gas should consider investing in the ultimate hedge—policies that ensure we retain our stark advantage through a balanced, diverse energy mix including coal, which has a proven record of being a reliable, stable backbone for electricity generation,” Quinn said.

Quinn Bashes EPA’s GHG Performance Standards

In recent years, utilities in the U.S. have flocked away from coal due to historically low natural gas prices and federal environmental regulations. While recent energy outlooks have estimated that coal will remain the backbone of the world’s electricity system for decades, reports from the U.S. have told a different story, due mostly to the impact of unconventional oil and gas. A recent study estimated that as much as 39 percent of the U.S. coal fleet could face retirement by 2016, while the federal Energy Information Administration projected that number would be closer to 8.5 percent. Regardless, after decades of being the most widely-used fuel source in the U.S., EIA said last summer that coal generation has declined in recent years and is now largely even with gas in terms of total electric generating capacity nationwide.

In his remarks, Quinn bashed the Environmental Protection Agency’s proposed greenhouse gas emissions performance standards for new fossil plants. He said the proposed rulemaking, which is expected to be finalized this year, is an attempt to move the needle even more in the direction of natural gas, a move he called “bad policy.” “This is a textbook example of someone making predictions and ensuring its outcome by policy,” Quinn said. He added: “If we continue to deliberately adopt policies that halt building new coal-fired power plants here in the United States, we’re only slowing development and deployment of the cleaner coal technologies that could be used around the world tomorrow. To me, at least, this represents a failure in ambition and a failure in public policy.”