Western coal production is expected to fall by over 30 percent in 2020 due to new federal pollution standards proposed for power plants, according to U.S. Environmental Protection Agency projections. 

The decline is anticipated to be offset in part by a rise in natural gas fired generation, which the EPA estimates may increase as much as 18 to 19 percent by 2030. 

The countervailing numbers highlight the dilemma facing Wyoming. The new pollution standards would cut carbon dioxide emissions at power plants 30 percent from 2005 levels by 2030. They are largely aimed at coal-fired plants, which account for about a third of the country's greenhouse gas emissions. 

Wyoming is the country's top coal-producing state, supplying more coal than Texas, West Virginia, Kentucky, Pennsylvania, Illinois and Montana combined. 

But the Cowboy State is also one of the top natural gas-producing states in the country. In 2012, the state ranked fifth nationally in natural gas production. 

The plan outlined by EPA would allow states to reduce their emissions levels in part by using low emissions power sources like natural gas and renewable and nuclear power. 

"I like all those energy sources, and I think it's great to be developing those," said Gov. Matt Mead, adding that he was positive about the state's extensive natural gas, wind and uranium resources.  "But at the same time I think we need to recognize what the coal miners in Wyoming provide us is very valuable not only to Wyoming but to the entire country." 

EPA's analysis projects western coal production would stand at 446 million tons in 2020 without implementing the rule. Western production would fall between 31 and 34 percent of that number, depending on whether states implement regional or state-by-state carbon reduction strategies. Nationally, the decline is projected to stand between 25 and 27 percent. 

The agency said the expected reduction is a product of three factors: improved efficiency rates at existing coal plants, reduced demand due to customers' energy savings and a shift away from coal.

The nation's coal fired power plants are estimated to produce 25 percent to 27 percent less power in 2030. EPA projected 30 to 49 gigawatts, or about 12 percent to 19 percent of the nation's coal-fired capacity, will be retired by 2020 as a result of the rule.

Cloud Peak Energy and Peabody Energy, two of the larger producers in the Powder River Basin, declined comment for the story. 

Coal's share of the country's overall power production will largely remain the same, however, EPA Administrator Gina McCarthy said in an interview with PBS. The agency's analysis shows that coal will account for roughly 30 percent of the country's electricity production. It is about 40 percent today.

"It’s complicated, but we did the best job that we could to recognize that coal is in the mix today, and it is going to be in the mix almost at the same levels in 2030," McCarthy said. "But what you’re going to see in 2030 is more efficient plants. And you are going to see a lot more fuel diversity, with renewables and energy efficiency investments being made. This on the whole is great for the economy and it’s great for jobs."

Renewables are expected to increase as a result of the rule, though only slightly. EPA said it estimates sources like wind and solar will add 12 gigawatts of power by 2020 and another 9 gigawatts of power by 2030. The agency's projections show renewables would make about 9 percent of the country's generating capacity. 

But the biggest projected growth was in natural gas. The sector is expected to grow 18 to 19 percent by 2030, with much of the increase coming by 2020. New natural gas-fired facilities are projected to increase from 85 thousand gigawatt hours without the rule to as high as 248 thousand gigawatt hours in one scenario EPA considered, an increase of 192 percent.

Natural gas producers welcomed the projection, if not the rule itself.

Frank Macchiarola, executive vice president of government affairs at American Natural Gas Alliance, said the power generation market was already moving toward natural gas regardless of the regulation. And, he noted, that much of the projections will ultimately depend on the strategies states use to limit emissions. 

It will be important for EPA to consider the abundance and affordability of natural gas as it accepts public comment on the rule, Macchiarola said. 

"Our view is, and it is the view of the EPA frankly, that this rule is going to amount to greater use to natural gas," he said. "We think the administration, based on everything they've said, based on the president's commitment to natural gas, we’re hopeful they will take into account natural gas’s importance in the regulatory environment."

Reach energy reporter Benjamin Storrow at 307-335-5344 or benjamin.storrow@trib.com. Follow him on Twitter @bstorrow

(13) comments

VOR
VOR

In our great capitalist system there are winners and losers. After moaning, whining and crying I would think Wyoming conservatives would accept the decline of coal and get on with life in the 21st century.

I guess they have to go through the five stages of grief: denial, anger, bargaining, depression, acceptance.

Hill Town Trader

The grieving "they" includes the taxpayers, who will not have mineral royalites to lean on anymore.

irdrmr

How do we get to "lean on it" when the good ole boys stash it in the bank??

irdrmr

If we are "leaning on" the royalties, why was there a ten cent gas tax added? Why do we have to pay over one hundred dollars in fees on a vehicle over ten years old??

Dewd

Here is the nature elephant marching towards the consumer . We can be assured that natural gas prices will skyrocket, regardless of where that gas is produced and who it gets sold to or burns the stuff. Doesn't matter if that gas came out of a well five miles away, or five hundred miles, we will pay the NyMex or Comex brokered price for the stuff, and that brokered futures speculation will be based in part ( too large a part ) on the price of gas in Asia and Europe. The market is rigged against the consumer. No news there.

Look at how the crude oil price is set. The price of crude oil has little to do with the cost of finding the stuff , drilling, producing crude, and shipping it. Saudi Arabian oil can be delivered to a US refinery for an actual cost of less than $ 15 a barrel. But a tanker arriving today offloads it for $ 103.00 because that is the agreed commodity brokered price for it. A perversion of supply and demand by pit traders in silk ties who live in New York and London.

The same thing will happen with natural gas. Natural gas prices in Western Europe are three times higher than the US. That same gas in Asia is 5 times higher. So the Wyoming consumer will pay w-a-a-a-a-a-y more for its own domestic Wyoming gas, just because the corporations can leverage the selling price without respect to production and distribution costs. It's voodoo economics. No news there.

Only when a vaccine is developed that cures greed will this change. Please don't blame the Obama administration for increases in energy prices, with or without the new EPA regs on coal plants . Energy prices are determined far more as a result of market forces than government policy , and those markets are rigged. When the petroleum industry or the oily oligarchs says otherwise, they are being disengenuous to the point of extortion. It's the difference between a benign tumor and a malignant cancer. The entirety of the Hydrocarbon Hegemony is more malignant with each passing day, globally and locally.

TBA
TBA

It is voodoo economics indeed,and we will all pay higher prices for natural gas just as the fuel gods jacked up gas and diesel prices so only the rich can afford it anymore.

Hill Town Trader

Hydro carbons are traded on the Chicago and London markets are only for SPOT contracts. Most utilities and industrial uses pay priced based on long term contracts, at much lower prices based on production/transport costs. These long-term contracts take up a vast majority of production, so all fluctuations are pushed into the tiny part of the total trade that is the spot trade, making it more volatile.

Those trader you mention are only trading a tiny part of the supply; utilities and industrial users buy through long-term much lower cost contracts.

irdrmr

Your wrong, look it up

Pioneerpete

Making a comparison of two different products in different markets is not exactly the best way to make your point. The shift to low-sulphur coal did drive up the price of Wyoming coal, but it did not necessarily kill the market for West Virginia coal. Natural gas which is being produced in the areas where coal-fired electrical plants are being phased out. That is currently having more effect upon coal prices than the prospect of EPA regulations "destroying the coal industry." Those plants will continue to use coal, that is unless they get themselves in a bind with disposal of coal ash. It would be enlightening to read the EPA regulations, since they are designed to minimize disruptions in energy costs and involve the states in dealing with specific situations They are more onerous than the cap and trade proposal made by Republican businessmen years ago, but that was before we matured politically.

a

thehousemouse

fake carbon credits is like selling air to breath.

Pioneerpete

Like producing "low price electricity" and then charging the neighbors in the form of higher medical expenditures and the cleanup of coal ash fowling the watersheds? Just because it is not included in your bill does not mean that you won't pay for it.

thehousemouse

yes its called "work your nuts off and it pays...." wait for another to do it then you don't deserve it. enough of distribution of MY weath. do it or die, work it or share it/ ot stave. Im sick of paying for bike trails, that ask me to feel sorry for pencil pushing ( perfect dads while me comes off as a slouch while mine comes off as a idiot for providing then with their HIGHER THEM ME attitude. keep killing my economy some flunky who never had a problem then will mom write me a check to cover my loses? wE ARE IN DEEP DO-DOOO. these boys still think you are stupid and don't pay attention to their deeps?

Put your Faith in Science

"work your nuts off and it pays...." wait for another to do it then you don't deserve it. enough of distribution of MY weath. do it or die, work it or share it/ ot stave. Im sick of paying for bike trails, that ask me to feel sorry for pencil pushing ( perfect dads while me comes off as a slouch while mine comes off as a idiot for providing then with their HIGHER THEM ME attitude".-

Actually, in my experience, it is people like you who seem to have an egomaniacal superior attitude when compared to everyone else. It isn't just about working hard, it is also about treating people with kindness and respect, because that encourages people to work hard. Someone who was picked on in school and who had no friends, is probably going to struggle to find work and make something of themselves later in life. Your attitude is too simplistic and doesn't take into account a lot of the social and emotional factors that can play a part in determining why someone can turn out poor and impoverished later in life. Poor people should be helped, and they should be shown that people care and will do what they can to help them find work at whatever cost. Our society, and our economy will slowly grow stronger as a result. I have worked with people who had been working since they were 10, and they were very mechanically inclined and knew how to do a whole lot. There is nothing wrong with that, except when they use their experience and accomplishments to look down on and treat people who don't know as much as idiots. I didn't get along him, because they had the personality type of someone who thinks that they are superior to everyone else, and he treated me as if I were an incompetent idiot who wasn't capable of learning anything. No matter what the job, I could have done any job he could have done if he (or anyone) had simply taken the time to show me how to do it. Living in a conservative state means that you have to put up with a lot of strict, hard-headed attitudes as far as what it means to be a hard worker, and you also have to deal with a lot of arrogant and self-centered people.

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