Though It Was Once King, Coal Has Been Dethroned

Some bad news for anyone still hoping for a revival of the coal industry: The Energy Information Administration (EIA) is forecasting a steep drop in the consumption and production of coal in the United States. Meanwhile, new energy technologies are increasing in both use and production. This is costing jobs in coal mining towns – and creating far more in other parts of the country.

U.S. coal production will drop 2.4 percent this year, driven by a 4 percent decline in domestic coal consumption, the EIA has forecast. Production is expected to decline even further next year, down another 1.7 percent. The market is speaking clearly. Fewer Americans than ever are using coal. The EIA expects coal to generate 28 percent of power this year and 27 percent in 2019. That’s about half of the proportion it provided in the year 2000. The shift continues: By 2020, electric utilities plan to retire plants with 12 gigawatts worth of coal-fired capacity.

Maybe coal used to be king, but it has now been clearly dethroned.

More and more people are turning to cheaper alternative energy sources. The country’s energy needs are increasingly being met by natural gas, renewables and hydropower. Gas is generating 35 percent of electricity; renewables, excluding hydropower, more than 10 percent, with the sharpest increase coming from solar power; and hydropower 7 percent.

This continues a trend toward more efficient energy sources. The biggest challenge the coal industry has been facing is from natural gas, largely because of the shale gas revolution. Just three years ago, for the first time ever, natural gas topped coal as the primary source of electric power generation – a dramatic change from five years earlier, when coal accounted for twice as much of the mix as natural gas. The key difference has been price. Declining natural gas prices have led to “55 percent growth in natural gas-fired electric generation since 2006,” the Bloomberg Intelligence report found in 2016.

But solar is coming on strong, driven by improved technologies, which is driving down price and increasing access to consumers. As the price of panels and cells has declined over the past few years – about 60 percent since 2012 according to some estimates – the amount of solar generation in the United States has gone up. Between 2014 and 2016, generation from small-scale solar projects nearly doubled. It increased 72 percent from utility-scale installations between 2010 and 2016.

This has been great news for cities with growing solar companies. The sector now employs more than a quarter-million Americans, up sharply from just a few years ago, according to the Solar Energy Industries Association.

However, it is obviously bad news for coal towns. But it should not take anyone by surprise. The shift from coal has been clear for decades. Even when coal was in a stronger competitive position, the industry was providing fewer and fewer jobs, driven by new technologies and improved production methods – such as surface mining techniques, which require far fewer employees per ton of coal produced. From more than 140,000 coal industry employees in 1989, the workforce dropped to only 85,000 within 10 years, despite 10 years of competitive growth.

If coal town residents want to turn that picture around for themselves, they can do so – but only by finding a new way of making a living, where they live now or elsewhere. There is no point in hoping for coal to come back. The way we earn our money reflects the way we spend our money, and more and more people are spending their money on new energy sources.