You won’t hear Trump say what this utility executive said about coal’s future

Coal use has declined in Kentucky and other states and isn’t coming back “no matter who is elected in November,” a power industry executive told a gathering of energy officials last month.

In a presentation to the Kentucky Governor’s Conference on Energy and the Environment in Lexington in late September, Greg Pauley, president and operating chief of Kentucky Power, said coal use fell 16 percent from 2007 to 2015 in Kentucky, and 29 percent nationwide.

Conventional coal capacity is no longer-cost effective to build, he said, adding that natural gas and wind are “the price winners.”

Pauley’s comments run counter to the preferred narrative of elected officials who support the coal industry, one that chiefly blames government regulations and the environmental policies of President Barack Obama for coal’s decline.

Republican presidential candidate Donald Trump has assailed the Obama administration’s policies and those of his Democratic rival, Hillary Clinton.

Trump has campaigned on a promise to bring the lost coal jobs back by rolling back regulations and pulling the plug on Obama’s plan to curb carbon dioxide emissions.

But Trump also supports the development of natural gas through hydraulic fracturing, or fracking. Natural gas, Pauley said, is the primary reason why coal is on the ropes.

Natural gas costs $73 per megawatt hour to generate electricity, according to the U.S. Energy Information Administration, versus $95 for conventional coal. Wind power costs $73 per megawatt hour, though it is subsidized through tax credits, Pauley noted.

Natural gas is expected to overtake coal this year as the country’s No. 1 source of power.

Pauley said that natural gas could continue to underprice coal for the next 20 to 50 years.

“For those in the energy industry,” he said in his remarks, “that’s astounding.”

That calculation helps explain a decision by Kentucky Power, a subsidiary of American Electric Power, to convert the coal-fired Big Sandy power plant in eastern Kentucky to natural gas.

Pauley also cited stagnant or lower demand for residential power, increasing energy efficiency and the declining cost of renewable energy as factors pressuring coal.

Coal represents 51 percent of American Electric Power’s generating capacity, down from 74 percent in 2005. Natural gas’s share, meanwhile, has risen from 17 percent to 28 percent. Renewable sources now account for 11 percent, up from 3 percent in 2005.

Pauley said that the industry expects to have carbon regulation in some form, even if it isn’t Obama’s much-debated Clean Power Plan.

The U.S. Supreme Court put the plan on hold in February, and the U.S. Court of Appeals for the District of Columbia Circuit heard arguments last week from 27 states suing to overturn it, as well as 18 states that support it.

Many of the potential impacts of the plan have already become a reality, Pauley said.

“What we know for certain is that even if the Clean Power Plan is overturned,” he said, “the plants are closed, much of the equipment is gone, and the employees have moved on.”

This story was originally published October 4, 2016 at 4:10 PM with the headline "You won’t hear Trump say what this utility executive said about coal’s future."