CASPER, Wyo. — Western coal production is expected to fall by more than 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 to 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. 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 of 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.”