Decisions, decisions …

Jason Hayes, ACC Communications Director and Editor, American Coal magazine

The ACC opened 2011, focusing much of its conference and publication program on the theme of “decision making in difficult times.” Our 2011 Spring Coal Forum featured speakers and presentations describing what to expect in our rapidly changing policy and regulatory environments. In a February presentation to the Grand Junction, CO Energy Forum & Expo, I followed this theme as well, by discussing energy generation options that exist for western states. This edition of American Coal has focused on the same theme by providing information on some of the opportunities available to energy industry participants and the changing nature of energy generation.

Throughout these discussions, one thing has remained consistently clear; regardless of the challenges, considerations, and concerns, coal must remain a key energy choice in the here and now and well into our future. We need to keep it as a key energy choice because our other viable energy options simply can’t carry the weight of demand that coal shoulders on a daily basis.

Despite this fact, our industry faces a growing list of challenges, from increasingly strict environmental regulation, to strident anti-development protests and NIMBYism, to restricted (or at least drastically changed) funding mechanisms, and profound political and social misunderstanding about how we produce the energy on which our society is based.

For years, we have listened to stories of coal’s imminent demise and have heard all about the number of cancelled coal projects. (Make no mistake, those canceled projects were real and many of them have been shelved for good.) But, as we reported in previous issues of American Coal, the Coalblog, Coal Q&A webinars, and presentations in our conferences, the loss of those projects has not improved our energy realities. The loss of those projects has actually limited energy choices, increased energy costs, and slimmed generating margins down to dangerous levels. There’s no evading the fact that 2008 and 2009 were difficult years and the impacts of poor energy policy choices will linger on for many years to come.

On a more positive note, last year managed to stand some of those losses on their heads for the coal industry. Generation statistics for 2010 indicate a substantial turnaround in the availability of new funding and the expectations for sustaining tax policies for renewable development. According to wind industry numbers, 2010 installations were down by 50 percent from 2009 and third quarter installations dipped to 2007 levels. Without favorable tax policy and legislation encouraging “interest,” renewables waned. Coal, as it always has been, was there to beef up the generation portfolio with low cost, abundant, and clean electricity.

On the international scene, the coldest December experienced in Great Britain since 1910 left citizens shivering in their homes while British wind resources sat essentially idle. One Telegraph article repeated our consistent refrain for us as it noted, “The failure of wind farms to function at full tilt during December forced energy suppliers to rely on coal-fired power stations to keep the lights on.”

But we didn’t just go back to existing generation stock last year. Energy Information Administration (EIA) numbers indicated that new coal-fueled generation made up 39 percent of U.S.-based generation expansion in 2010. Eleven new coal-fueled plants, totaling just under 7,000 MW were brought online in 2010. This represented a level of coal-fueled build out that has not been seen in the U.S. since 1985.