Low natural gas prices have been the biggest driver of power-plant retirements that sapped demand for coal, according to a federal report released late Wednesday.
It’s not the first study to reach that conclusion, but it’s an important addition to research on the issue because it is from the U.S. Department of Energy.
The coal industry and many politicians in Kentucky and elsewhere have charged for years that onerous federal environmental rules — a regulatory war on coal — were the main cause of a sharp downturn in coal production and jobs that hurt Eastern Kentucky and other coal regions.
President Donald Trump also argued his predecessor’s rules had hurt coal, and has moved to roll back environmental rules.
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But the report from Trump’s Department of Energy does not back the argument that rules aimed at protecting air and water quality were chiefly to blame for the slump in coal.
The report cites a number of factors that have resulted in coal and nuclear power plants being closed in recent years: low natural gas prices, flat electricity demand, cost increases driven by regulations, and the growth of renewable energy sources such as solar power.
Of those, the biggest contributor to coal and nuclear plants being shuttered has been the “advantaged economics” of natural-gas power plants, the report said.
Those plants have that advantage because of an abundant supply of low-cost natural gas made possible by development of hydraulic fracturing, or fracking, and horizontal drilling techniques that unlocked vast sources of gas.
“Natural gas generation has proven to be a strong competitor with coal and nuclear power because natural gas prices have fallen over the past decade,” the report said.
Natural gas was the largest source of electricity generation in the country in 2016 for the first time since the government began tracking that data, the report said.
The report said it’s clear that environmental rules did affect decisions to close coal plants, however.
There was a significant loss of coal-fired generation between 2012 and 2016 when plans for tougher environmental rules would have influenced decisions by utilities on whether to make expensive upgrades to meet the new standards, the report said.
Though most of the rules got tied up in court, utilities decided to close many coal plants before it was clear the rules would be delayed.
Those plant closures, along with other factors such as competition from other coal basins, have hurt Eastern Kentucky and nearby areas of Appalachia.
Between 2011 and September 2016, 36,000 coal jobs were wiped out nationally, but almost 90 percent of those losses were in Appalachia, the report said.
Energy Secretary Rick Perry ordered the study to evaluate the reliability of the nation’s electricity grid.
The report concluded that the electricity supply remains reliable, but recommended changes it said could help maintain that stability.
Those included making it quicker and cheaper to license coal, nuclear and other power plants; making it easier for coal-fired plants to install upgrades; and financial measures to keep coal and nuclear plants operating to support the electric grid.
Coal and nuclear groups lauded the report, but environmentalists and solar advocates blasted it, according to media reports.
The Energy Department was “twisting facts to reach a predetermined conclusion in favor of coal,” Jim Marston, with the Environmental Defense Fund, told The Associated Press.
But Paul Bailey, head of the American Coalition for Clean Coal Electricity, praised the findings, the news service reported.
“One of the biggest challenges is how to preserve the nation’s coal fleet so it can continue supporting a reliable and resilient electricity grid,” Bailey said.