The Register-Herald, Beckley, West Virginia

December 29, 2013

TOP FIVE STORIES OF 2013 — Coal’s got a war on; natural gas production rises

By Pamela Pritt
Register-Herald Reporter

— Extractive industries have been West Virginia’s economic mainstay for 150 years. First timber, then coal and now natural gas have bolstered state tax coffers for as long as the state has been in existence.

While domestic markets for coal have dwindled, foreign markets seem to be on the uptick. Japan and Germany have abandoned their nuclear energy plants in favor of coal, and emerging markets in China and India have helped the state’s coal mines stay in production, albeit at a 25 percent lower rate than just five years ago.

Several factors contribute to coal’s domestic decline, but none get so much media play as the Environmental Protection Agency’s “War on Coal.”

The EPA finalized standards for the reduction of mercury and other toxic air pollutants from coal- and oil-fired power plants in 2011. About 40 percent of current electricity generating units do not have advanced pollution control equipment to reduce mercury emissions. High levels of mercury can cause damage to the nervous and immune systems in humans, particularly in developing fetuses and young children. The most common occurrence of mercury exposure is through the consumption of fish that have been exposed to the chemical.

Domestic coal-fired power plants have been closing, utility companies choosing to give up the fight rather than make the switch to equipment that will safeguard mercury emissions. About a quarter of the 32 plants closed, or planned for closure so far, were scheduled to close in the next decade because of age.

The EPA’s regulations say that only newly constructed power plants will fall under the new guidelines, and do not change final emission limits or other requirements for existing plants.

New federal regulations have pushed for carbon capture, but state industry leaders said two weeks ago that the technology for carbon capture and storage was not “readily deployable or easily scalable.”

But perhaps the Obama administration has conceded some of the battlefield in the War on Coal.

The administration announced recently that it wants all new coal-fired power plants to capture carbon dioxide — with the purpose of selling the waste to oil companies to use for pumping into oil fields, forcing more crude oil to the surface, The Associated Press reported.

The confederation of the coal and oil industries “silences the critics who say the administration is killing coal and discouraging oil production. It appeases environmentalists who want Obama to get tougher on coal, the largest source of carbon dioxide,” the AP report said.

Still, coal faces a formidable economic opponent in natural gas.

Natural gas production has risen in the state nearly exponentially since 2007, mostly in north central West Virginia. The use of hydraulic fracturing and horizontal drilling has allowed access to gas in the Marcellus shale, formerly thought to be too deep to drill.

The increase in production and an essentially flat market have spawned lower prices for the cleaner-burning fuel, with average prices about $3.70 per million BTUs. The low cost has made the fuel an attractive buy for power plants, with several making the conversion.

West Virginia has moved into the Top 10 of natural gas producing states, coming in at No. 10.

For the state’s overall economy, the news is seemingly good; however, the new eruption of natural gas production makes up only part of what the state’s economy is losing from decreased coal production.

— E-mail: ppritt@register-herald.com