Can Coal and Natural Gas Coexist?

Wheeling Intelligencer
25 February 2014
By Casey Junkins, Staff Writer

WHEELING - Within the next few decades, natural gas could surpass coal as the nation's preferred choice for electricity generation, according to estimates from the U.S. Energy Information Administration.

Currently, coal accounts for about 40 percent of all electricity generation, with natural gas at about 25 percent. By 2040, the U.S. EIA estimates natural gas will have 35 percent of the electricity generation market, with coal at 32 percent.

Murray Energy Corp. CEO Robert Murray believes the transition from coal to natural gas will hurt "our families, our region and our country."

As the Marcellus and Utica shale natural gas drilling boom proceeds across the Upper Ohio Valley, many wonder how this will impact the road the local and regional coal industry is traveling. As an example of how the shale chase is changing the area, Consol Energy recently sold the former Shoemaker and McElroy coal mines to Murray Energy as part of a $3.5 billion deal. Consol officials are using the proceeds from the sale to bore their way deeper into the shale game by drilling wells throughout Pennsylvania, Ohio and West Virginia.

Questions linger, not only about how the two fuels will compete with one another, but how they will impact one another in terms of labor and environmental effects.

Fact Box

In 2011, coal accounted for 42 percent of all electricity generation with natural gas at 25 percent, according to the U.S. Energy Information Administration
By 2040, the U.S. EIA estimates that 35 percent of all U.S. electricity generation will come from natural gas, with only 32 percent from coal
So-called "co-fired" power plants, in which both coal and natural gas are used, could be an option in the future that would benefit both industries and still provide power that is cheaper and more reliable than renewables such as wind and solar

"The two industries differ in terms of wages, in terms of how income is generated for those who own mineral rights, in terms of how much labor is used relative to equipment, machinery, and other capital, and along many other dimensions," said John Deskins, director of the Bureau of Business and Economic Research at West Virginia University.

Electricity Generation

The new EIA report predicts that by 2040, 35 percent of U.S. electricity generation will come from natural gas, while only 32 percent will come from coal. The remainder will come from nuclear power and renewable sources such as wind, solar and hydroelectric.

By comparison, federal statistics show 42 percent of U.S. electricity came from coal in 2011 with 25 percent being drawn from natural gas. In 1993, 53 percent came from coal with only 13 percent coming from natural gas.

Currently, nearly all of West Virginia's electricity comes from coal, as does most of Ohio's.

"The Obama Administration has been encouraging natural gas use, while destroying coal mining and utilization, at every turn," Murray said. "There is no doubt that the decreased utilization of coal will increase electricity rates for everyone, including our citizens on fixed incomes and our manufacturers of products that compete in the global marketplace."

As more natural gas floods the marketplace, Xander believes prices should remain relatively low. He said adapting some coal-fired power plants to generate some of their wattage from natural gas could help the plants meet the more stringent federal emissions standards set to be imposed on them.

"Residential natural gas rates have dropped about 40 percent in the last three years. But if they take coal out of the supply mix for electricity, the cost per kilowatt hour will definitely climb. It seems silly," Xander said. "Given our abundance of inexpensive coal that can be burned with acceptable levels of emissions, we are foolish to simply abandon coal."

Because of more stringent U.S. Environmental Protection Agency air emissions standards, American Electric Power is set to close the coal-fired Kammer Plant in Marshall County this year. AEP now operates natural gas-fired plants in Dresden, Ohio, Waterford, Ohio and Lawrenceburg, Ind.

Environmental/Legal Effects

Though many believe a shift to natural gas from coal will improve environmental quality, Wheeling-Ohio County Health Department Administrator Howard Gamble confirms there are high levels of carcinogenic benzene emitted from some local natural gas well sites.

Another problem can arise when drillers are working in the same vicinity as miners. In 2012, Murray had a dispute with Oxford Oil Co. after that driller initially got permission from the Ohio Department of Natural Resources to drill wells through coal seams at the Century Mine. The ODNR eventually did not allow these wells to proceed after Murray objected for safety reasons.

Alliance Resource Partners continues mining coal at the Tunnel Ridge Mine in Ohio County. As natural gas rigs populate the Ohio County surface, coal mined from the underground Tunnel Ridge facility feeds into three silos that tower above W.Va. 2 about 2 miles north of the Warwood section of Wheeling.

The Sierra Club, a powerful environmental lobbying group with 2.1 million members maintaining offices in San Francisco and Washington, D.C., claims that burning coal leads to "as many as 13,000 premature deaths every year and more than $100 billion in annual health costs." The group also has objected to the Obama administration's push for more natural gas use, claiming that industry, as well, can be harmful to the environment.