Where Facts And Controversy In The News Come Together In Truth

Thursday, January 24, 2013

Demise Of The Coal Industry Is Just Natural Progression

Natural Gas Will Soon Be The Number One Producer Of Electricity by Jack Swint

A longtime history and way of life in West Virginia is quickly beginning to fade away and there is nothing anyone can do about it. The cold-hearted fact is, coal mining in this state and the rest of the Appalachia region will come to an end within the next ten years. Don’t blame it on Obama, the EPA or any other entity, it’s just the natural progression of life after we welcomed natural gas as a source for electricity. Anyone who can honestly say they did not see this coming has been living under a rock.

This is the same scenario that allowed foreign countries and their industries to come to America and buy us out. We welcomed them with open arms because we were in need. When it was over, we blamed everyone but ourselves for letting it happen.

Natural Gas is the future and everyone from the gas companies to the lawmakers who paved the way through legislation right up to the landowner who leased out his mineral rights to drill natural gas is enjoying the windfall. And there is plenty of it to go around. I can also assure you our politicians are right behind it all hoping for it to succeed.

If there has been one key factor that has foretold the coal industries demise it was the recent media stories proclaiming how… 'For the first time in U.S. history, natural gas generated as much electricity as coal.' And within the next 7 to 10 year’s natural gas exploration and production will leave the coal industry in its own dust.

You Do The Math

Up until recently, coal supplied 50% of the nations electricity. In 2012, reports show coal and natural gas are equal in their use to produce power. Experts predict that the need for coal will drop to 40% by the end of this year and 30% by the end of the decade. Coal generation decreased 29 billion-kilowatt hours from March 2011 to March 2012, while natural gas generation increased 27 billion-kilowatt hours during the same time period.

Natural gas prices were near 10-year lows this winter, causing some states such as Ohio and Pennsylvania to increase their dispatch of natural gas-fired plants. Newer vintage natural gas-fired units operate at higher efficiency than older, fossil-fired units, which increases the competitiveness of natural gas relative to coal. While natural gas production is on the increase and states are building more and more natural gas fired power plants, coal mines are laying off workers and shutting down coal mines as utilities increasingly switch from coal to natural gas.

According to statistics, gas exploration and production is cheaper, safer and less destructive to the land, (such as strip mining-mountain top removal) it is also more environmentally friendly. According to the Government Accountability Office, power plants that burn coal produce more than 90 times as much sulfur dioxide, five times as much nitrogen oxide and twice as much carbon dioxide as those that run on natural gas do. Sulfur dioxide causes acid rain; nitrogen oxides cause smog; and carbon dioxide is a so-called greenhouse gas that traps heat in the atmosphere.

Massive Lay-Offs In The Coal Industry

Thousands of coal miners have been laid off just in the Appalachia region this year. Mines have shut down and thousands of more workers depending on the industry, have also lost their incomes. Just 2 months ago, one of the largest coal companies in the world (Arch Coal) laid off 750 workers in Kentucky and WV and closed 4 of its mines altogether. They announced cutbacks in production at 3 other mines.

According to Arch President and CEO John W. Eaves. "Current market pressures and a challenging regulatory environment have pushed coal consumption in the United States to a 20-year low." These job losses come as utilities increasingly switch from coal to natural gas, which has become cheaper as supplies grow.

What We Do Know

The current ongoing push for natural gas production is in the Marcellus Shale areas in WV, PA, NY, OH and parts of VA. Production there is anticipated to soar over the next 3 to 5 years. In early 2008, Terry Englander, a geoscience professor at Pennsylvania State University, and Gary Lash, a geology professor at the State University of New York at Fredonia, surprised everyone with estimates that the Marcellus is estimated to contain more than 500 trillion cubic feet of natural gas.

How much natural gas is anticipated just from the Marcellus Shale basin? Approximately 10% of that gas (50 trillion cubic feet) is projected to be recoverable. That volume of natural gas alone would be enough to supply the entire United States for about two years and have a wellhead value of about one trillion dollars! Early production rates from some of the new wells has been over one million cubic feet of natural gas per day. The technology is so new that long term production data is not available.

The mere presence of an enormous volume of potentially recoverable gas in the eastern United States has a great economic significance. This will be some of the closest natural gas to the high population areas of New Jersey, New York and New England. This transportation advantage will give Marcellus gas a distinct advantage in the marketplace.

As with most gas wells, production rates will decline over time, however, a second hydraulic fracturing treatment could re-stimulate production. And, after that, there is another untapped resource right below Marcellus that has not received a lot of publicity to date.

Whats Under The Marcellus Shale?

Although the Marcellus Shale is the current drilling target, there is yet another rock unit with enormous potential and it is only a few thousand feet below the Marcellus. The ‘Utica Shale’ is thicker than the Marcellus, more geographically extensive and has already shown that it can be of commercial value. When the yield of Marcellus Shale wells start to decline, new wells might be drilled down to the Utica to continue a stream of natural gas production.

Drilling for the Utica will be more expensive because of the greater depth, however, the infrastructure of drill pads, right-of-ways, pipelines, permit data and other investments will reduce development costs for Utica Shale wells.

Other Gas Shales in the United States 

Natural gas exploration is nothing new to the United States. Neither is the methods used to produce these trillions of feet of gas. Besides the Marcellus and Barnett Shale of Texas. There is the Fayetteville Shale of north central Arkansas, the Haynesville Shale of northwestern Louisiana. These are just a few of several unconventional gas plays now happening in the United States and Canada. Exploration in other states are ongoing.

Similar organic shale deposits in other parts of the world might also produce gas as use of the new technologies spread.

Facing The Inevitable 

There have been times before when coal's demise has been prematurely predicted, most notably in the 1980s. This time, people like renowned University of California’s fossil fuel expert, David Victor says it is different. “Coal is on the way out because of the EPA, new regulations and natural gas. We could see coal down at 15 or 20 percent of electric supply over the next decade, that would be a huge change in an industry that historically has relied on coal for 50 percent or more of the electric supply."

Remembering back to the warnings in the 1980’s, People were talking about the death of the coal industry, but coal was half of the electric power supply. "Now," according to Victor, "we're talking about terminal illness for coal in the advanced industrialized countries, and it is actually happening."

There Really Is No One Person To Blame

Even with Obama, the EPA and other lawmakers openly targeting the coal industry, it all comes down to the fact that natural gas is becoming the new industry to produce our electricity. Yes, there will still be a need for coal, most likely in other countries, but that to will play out as those countries search out different and more efficient sources than coal.

Robert Ukeiley, an environmental lawyer in Berea, Ky., said it's ridiculous to blame environmental regulations for the coal industry's struggles. He said those rules are completely reasonable, have been decades in the making and are a moral no-brainer.

He said it is just a simple fact that "cheap coal in central Appalachia has been mined out. There is no politician who can change that or scapegoat anybody." Remaining coal supplies tend to be more expensive to extract and aren't as profitable, he said. "Central Appalachia would be experiencing almost as much decline in coal mining even if we had the most anti-environmental president of our history in place," Ukeiley said.

In Closing….

As hard as it is to accept, coal mining as a leading industry in this region is coming to an end. We might as well face it now and work on a solution to possibly provide miners the opportunity to cross-train in the natural gas industry for the near future. This author has many relatives (past and present) that either work directly or indirectly in the coal industry.

I can’t honestly imagine what these men and women are enduring that depend on coal for their way of life. A way of life that has been handed down from generation to generation. West Virginia’s leading coal producing county (Boone County) has seen its unemployment rate go from 4% to 12% and that directly reflects the lay offs and closures in the coal industry.

Don’t think for a second that our top leaders in the statehouse and in Washington don’t know whats coming for the coal industry. They know it and are doing their best not to have to own up to that fact, at least not until after the upcoming November election.

End Of Story

Jack Swint-Publisher
West Virginia News
E-Mail:  WestVirginiaNews@gmail.com
Website: http://WVNewsOnline.com
Blog: http://WestVirginiaNews.blogspot.com
Twitter:  @WVNewsOnline
LinkedIn: Jack Swint

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