Coal is still king in 18 US states. But for how long?

CNN Finance 2 months ago

Coal has been knocked down. But it's not out by a long shot.

Even though black gold has been in steep decline, it's still the most-used electricity generation source in 18 US states, according to government statistics published this week.

Not even natural gas, a rapidly growing and cleaner burning fuel, leads in that many states. The numbers underscore how large pockets of America continue to rely heavily on coal for power and jobs.

"It's hard to unseat a former champion. It doesn't change overnight," said Matt Hoza, manager of energy analysis at consulting firm BTU Analytics.

Coal is still the most prevalent fuel for electricity in parts of Appalachia, including Ohio, Kentucky, West Virginia and Kentucky. It's also the leader in other major coal-producing states such as Colorado, Wyoming and Montana.

But coal's role in the electric grid is shrinking because of the abundance of natural gas and the plunging prices of renewable energy. Utilities have pulled the plug on countless coal-fired power plants in response to environmental regulations and demands from customers for cleaner fuel.

'Rapid shift'

A decade ago, before the shale gas boom really took hold, coal was the leading source of power in 28 states. Since then, former coal states such as Tennessee, Georgia, North Carolina and Virginia shifted to natural gas and nuclear power.

In 2016, natural gas overtook coal for the first time as the nation's leading source of power generation. Coal's market share tumbled to an all-time low of 30% last year, down from nearly 60% three decades ago, according to the US Energy Information Administration.

"We've seen a relatively rapid shift from coal to natural gas," said Hoza.

Although coal continues to play a major role, it's popular mostly in states like Utah that have smaller populations. Natural gas is the leading source of power in the nation's four most populous states: California, Texas, Florida and New York. Pennsylvania, the No. 5 state by population has moved away from coal in favor of nuclear.

Wind on the rise

Coal also faces competition from renewable energy, where costs have plunged in recent years. Hydroelectricity is the most-used electricity generation source in six states, including Washington and Oregon.

Wind isn't the top source of power in any US states -- but the EIA said "that may soon change." That's because Kansas and Iowa -- two coal states -- have ramped up their use of wind turbines.

Analysts don't expect that President Donald Trump's moves to slash environmental regulations will meaningfully revive the coal industry.

"Coal will continue to retire -- at different rates in different locations, based on the cost of supply," said Hoza.

Fossil fuels to peak by 2027?

Coal has also come under pressure in some fast-growing emerging markets that are attempting to clean up pollution.

For instance, China has halted construction of 100 gigawatts of coal power over the past year, according to Carbon Tracker, a London-based think tank. In India, the cost of solar power has plunged below that of a new coal-fired power plant.

Renewables are poised to be cheaper than fossil fuels in every major region of the world by 2020, according to the International Renewable Energy Agency.

Carbon Tracker predicted in a report released on Tuesday that global demand for fossil fuels will top out between 2020 and 2027.

"The 2020s will be the decade of fossil fuel demand peaks," Kingsmill Bond, the author of the report wrote, "as one bastion after another is stormed and overwhelmed by the rising renewable tide."

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