U.S. Coal Industry Reeling

by Nick Cunningham

Coal has been the backbone of the U.S. energy portfolio for decades, but in recent years, the industry has taken a turn for the worse.

According to monthly data from the EIA, last year natural gas pulled even with coal in terms of electricity generation, for the first time ever (see chart). The dramatic decline in coal generation can be attributed to a few things - increasing environmental restrictions, low natural gas prices, energy efficiency, and several mild winters in the mid-Atlantic.

While the surge in natural gas production is controversial, the significant hit to the coal industry is an unqualified good thing for both the country and the global climate. 

Burning coal is a nasty thing. When coal is burned, it emits sulfur dioxide (SOx), nitrogen dioxide (NOx), carbon monoxide, soot and other harmful particulates. When heavily concentrated in a geographic area, combustion of coal leads to smog. A extreme example of this can be seen in the horrific images of smog coming out of Beijing over the past two months, which were visible from space (see image). 

View of Beijing from space. Source: NASA

However, not only is burning coal a dirty practice, but the production of coal can also be an environmental disaster. One of the worst ways of extracting coal is through mountain top removal. This is where a coal producer basically dynamites a mountain, removing it - yes, destroying the mountain top and removing the dirt - to gain access to the coal seams beneath. 

There are several hideous consequences of this practice. The excess dirt and chemicals after blowing up the mountains are then plowed into rivers and streams. This ruins fish habitats, poisons drinking water in neighboring communities, and fouls the landscape. Removing the mountain tops, which provide valuable tree coverage, also leads to violent flooding when heavy rains come, because there are no longer trees to soak up the rain and prevent runoff.

I am currently reading Coal River by Michael Shnayerson, which describes some of the corruption, in West Virginia in particular, of the coal industry. In such a poor state, coal is king, and politicians bend to the wishes of the industry, often to the detriment of the residents whom the politicians are supposed to represent. 

I stumbled upon this blog from Earthjustice attorney Neil Gormley, who earlier this year did a fly over of several mountain top removal sites in West Virginia. The aerial images of the mountain top removal sites are ghastly, resembling a moonscape. The mountain tops are completely denuded, exposing vast expanses of lifeless terrain.

The New York Times published an article in 2009 detailing some of the sickening effects of coal production on surrounding communities, including common occurrences of "gall bladder diseases, fertility problems, miscarriages and kidney and thyroid issues." One family suffered rashes when they showered and cavities from drinking the water. They have been forced to turn to bottled water for their needs. 

Gormley expands upon a fascinating question about the connection between poverty and mountain top removal. There tends to be a high correlation between the location of the mountain top removal sites and poor communities - high rates of poverty, high rates of unemployment etc. He argues that these communities do not have the resources to stand up for themselves and protect their communities. When a mining company blasts away a mountain below which many of these people live, they do not have the political influence to put a stop to it. Mining companies can steam roll any obstinate residents, buying off local politicians when necessary.

However, he also flips the logic, and poses the question: is it not also the other way around? Yes, coal companies operate in poor communities because it's easy, but is causation the other way? Are these communities poor because of coal mining? 

Many in West Virginia believe that coal, although an industry easy to loath, is the main economic salvation in an otherwise poor state. However, there is evidence that the coal industry "actually costs West Virginia taxpayers more than it provides." The coal industry requires direct expenditures - constant maintenance of roads as well as paying regulators for oversight and enforcement. It also costs the state indirectly through the various tax benefits it receives (equivalent to a direct government expenditure). These costs may actually outweigh the millions in revenues provided by extracting coal. This also does not take into account the extensive damage to public health, ecosystem services, and affected businesses (lost tourism for example).

Fortunately, it seems the coal industry is reeling. With EPA regulations limiting greenhouse gases on new power plants under the Clean Air Act, it is unlikely that new coal plants will be built in the United States. And there are rumors that the Obama administration may extend these regulations to existing power plants, forcing coal plants to either clean up or shut down. 

Moreover, the practice of mountain top removal may be on the way out. Patriot Coal, a major coal producer, announced a settlement in December 2012 to phase out mountain top removal. Patriot Coal went bankrupt (another harbinger of King Coal's decline), and with declining influence it stated, "Patriot Coal recognizes that our mining operations impact the communities in which we operate in significant ways," a shocking admission.

Mountain top removal is a disgrace and needs to be ended. Thankfully, the coal industry is wounded and the days of it flouting environmental and public health standards may be numbered.