King Coal's uncertain future: natural gas and environmental regulations threaten once-dominant electricity source.

• Author: Buchsbaum, Lee
• Position: ENERGY

Bucking a nationwide trend, 2012 marked the second straight growth year for Colorado's coal miners. Only two states among the top 10 coal producers--Colorado and Illinois--increased production last year. But trapped between a glut of natural gas and falling demand for its premium quality coal, producers are getting hammered in 2013. However, as King Coal staggers here at home and nationwide, are we setting ourselves up for a Future of reliance on much more expensive and potentially environmentally worse natural gas dependency?

Historically, Colorado coal production peaked in 2004 when almost 40 million tons were extracted, main I% from Western Slope counties. With its high heat and relatively low sulfur content, Colorado's "super compliance" coal has long been shipped to electricity generators nationwide, particularly eastern power producers like the quasi-government owned Tennessee Valley Authority. But over the last decade, many coal-fired power plants have installed sulfur emissions scrubbers and other pollution controls that allow them to burn cheaper local supplies.

Simultaneously, competition from cheap natural gas and a growing amount of renewables like solar and wind, have eaten into coal's market share--now down in only a third nationwide. The Great Recession and increased greenhouse gas regulations as well as uncertainty over future Environmental Protection Agency restrictions over carbon dioxide have led to widespread coal plant shutdowns, fuel switching and the curtailment of plaits to develop cleaner coal technologies.

According to the 2013 Colorado Business Economic Outlook Study published last December, beginning in 2011 production from Colorado's 11 coal mines increased 10 percent, to 27 million tons and then to last year's high of 28.5 million tons. Almost hall the coal burned to make electricity instate comes from Colorado mines, with the remainder railed in from Wyoming. The state's 12 coal-fired power plants consumed 18.4 million tons of coal in 2011, supplying about 68 percent of the state's total electricity, but that figure has been declining and will fall sharply as new legislation like House Bill 1365--dubbed the Clean Air Clean jobs Act--kicks in. Chris Carroll, one of the authors of the coal section of the Business Economic study and a former Coal Geologist for the Colorado Geological Survey he's now with the State of Wyoming) is not hopeful. Looking at the most current Figures, not only does he believe the last...