March 5, 2017

...AND CHEAPER:

Trump Can't Save Coal (Adam Millsap, 3/05/17, Mercatus Center)

[C]oal must also be able to compete with alternative sources of energy, and lately natural gas has provided more value for consumers. The figure below shows that the real price of natural gas is at its lowest level since 1997.

Another analysis from Bloomberg shows that the price of producing power from natural gas relative to coal fell dramatically after 2009 and has remained low since. Additionally, this relative price decline is largely due to the price of natural gas falling, not the price of coal rising. This price decline also matches up with the decline in coal mining employment shown earlier--evidence that competition from natural gas is at least partly responsible.

The increased use of natural gas doesn't appear to be waning, either. According to the U.S. Energy Information Administration, electricity generation from natural gas (33%) caught up to electricity generation from coal (33%) in 2015. As recently as 2000 natural gas was responsible for only about 15% of the nation's energy while coal was responsible for approximately 50%.  The current parity between the two is the result of a trend that began in the late 1990s, before the most recent regulations.


Posted by at March 5, 2017 2:59 PM

  

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