All eyes on EPA court case

THE US Energy Information Administration envisages a world for coal where the country’s industry grows by 0.7% a year to 2030. The projection, however, does not include President Barack Obama’s proposed Clean Power Plan.

Anthony Barich

All eyes will be on the US Court of Appeals for the DC Circuit today as it hears argument in three cases involving challenges to the Environmental Protection Agency’s Clean Power Plan, which will establish the country’s first limits on carbon pollution from existing fossil fuel-fired power plants.

The EPA is still considering more than four million public comments received between June and December 2014 on its proposed standards, and is not expected to issue a final rule until this North American summer.

The Environmental Defence Fund fears that the petitioners’ attempt to “short-circuit this careful, deliberative rule-making process” would open the door to endless litigation over agency proposals.

In its Annual energy outlook 2015 with projections to 2040 issued yesterday, the EIA notes that US coal production fell by 187 million short tonnes – 16% – between 2008 and 2013, as declining natural gas prices fuelled by the country’s shale boom made coal less competitive.

The EIA report expects US coal production to increase at an average rate of 0.7% a year from 2013 to 2030, from 985 million short tonnes (19.9 quadrillion British thermal units) to 22.4 quadrillion Btu.

Over the same period, rising natural gas prices, particularly after 2017, contribute to increases in electricity generation from coal-fired power plants as coal prices increase more slowly.

The EIA forecasts that after 2030, coal consumption for electricity generation levels off through to 2040.

However, the scenarios presented in EIA’s report do not include EPA’s proposed Clean Power Plan, which the EIA said would have a “material impact” on projected levels of coal-fired generation.

While a separate EIA analysis of the Clean Power Plan is forthcoming, for now it projects that compliance with the Mercury and Air Toxics Standards, coupled with low natural gas prices and completion from renewables, will lead to the projected retirement of 31 gigawatts of coal-fired generating capacity and the conversion of 4GW of coal-fired generating capacity to natural gas between 2014 and 2016.

The EIA sees US coal exports declining from 118M short tonnes in 2013 to 97M short tonnes in 2014 and to 82M short tonnes this year, then sees a gradual increase back up again to 141M short tonnes in 2040.

Much of the growth in exports after 2015 is attributable to increased exports of steam coal from mines in the interior and western regions.

The EIA forecasts that between 2015 and 2040, US steam coal exports will increase by 42M short tonnes, and coking coal exports increase by 17M short tonnes