Will the recession kill King Coal?

The most voracious consumers of coal-fired electricity have been hit hardest by the economic downturn


Andrew Leonard
August 28, 2009 12:39AM (UTC)

Here's a candidate for the department of mixed blessings. Reuters is out with an interesting piece of analysis by Bruce Nichols and Eileen O'Grady suggesting the recession will contribute to the long-term decline of the coal industry.

This pleases Gaia, I'm sure. Coal is a nasty, nasty source of energy. But the implications for the long-term economic health of the United States is less clear. Nichols and O'Grady report that heavy industry -- the biggest consumer of coal-fired power plant electricity -- is taking the brunt of the recession, and even after the recession ends, is unlikely to require as much power as it did before -- because it's not coming back.

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Reuters:

Power companies are reducing use of coal plants because of declining demand from heavy industry, the economic sector hardest hit by the recession. The loss of industrial "baseload" looks long term, analysts and executives say.

Natural gas-fired plants, easier to stop and start, have remained busy serving commercial and household power demand, which varies hour by hour and has been less affected by the recession.

The collapse of natural gas prices in the face of abundant supply, and astonishing projections for the amount of fuel that can be recovered in the future from shale formations, has been a big story this year. Climate activists are overcome with glee, because compared to coal, natural gas is a spick-and-span clean, low-carbon source of energy that can be counted on as a reliable backup to volatile wind and solar.

But what about the projections that industrial electricity demand growth will lag way behind residential and light industry for at least a decade to come? Can an economic superpower survive on services and light industry alone? We may be about to find out.


Andrew Leonard

Andrew Leonard is a staff writer at Salon. On Twitter, @koxinga21.

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