A Networked Society Requires Coal

0003Server farms supporting our networked society have the electric power demand of small cities.  An iPhone demands as much electricity over a year as a refrigerator, recent studies show. People assume that even though we use more electronic gear we are not increasing power demand. The opposite is true.

For more than a century coal has been a source of reliable and abundant energy at a very competitive price. As recently as 2008, coal-fired power plants accounted for more than 50 percent of our nation’s electricity supply. Coal and other hydrocarbons such as oil and natural gas have supported our standard of living and provided us with a substantial and sustained competitive advantage in the world economy.

The war on hydrocarbons is fought on many fronts, but they tend to converge at the most basic of our critical energy infrastructure, the electric power plant.  The ability to meet the mandated automobile fuel-efficiency standard requires that electric cars become a major component of our national fleet.  All of this and a rebounding economy require more, not less, power generation.

In spite of the obvious need to grow our economical and reliable sources of power, two elements of public policy weigh against our ability to do so.

The first element is the federal [EPA] effort to close as many existing coal-fired power plants as possible, as soon as possible, and to prevent the construction of new ones, stripping our nation’s generating fleet of its most reliable and consistently economical capacity.  Current public policy  also ignores the fact that technological advances enable coal-fired generation to produce more power with significantly lower emissions.  But, unfortunately, the economic incentives that drove the sort of research that enabled those steady technological advances to occur are chilled by the anti-coal policies we see today.  And, as sure as night follows day, a similar all-out attack on natural gas production and power generation will follow.

The second element includes the state and federal dispatching mandates that force wind and solar power into the base load dispatch cycle and increasingly push coal to be the fuel for variable peak demand periods.  This ignores the fact that wind and solar are the least-predictable and most expensive sources of electricity whereas coal is both low cost and reliable, and the plants that burn coal are designed to be baseload plants.

Neither coal nor renewables are well suited to play the role they are being asked to play. Nor is the bulk of the current natural gas generating fleet well suited to provide baseload power.  Much of that was designed to meet peak demand requirements and more recently to provide a rapid response as a backup to the inherent unreliability of wind and solar power.

What will arrest the nation’s rapid move away from coal? The answer is uncertain.  It may take rolling blackouts or brownouts in large parts of the country as peak demands cannot be met because we have stripped so much coal-fired generation from the supply base.  Much of our power-generating fleet today is being operated in a manner it was not designed for, which increases the risk of failure. And failure of even small facilities can cascade through a regional grid causing widespread outages.

Or there may be a public outcry caused by the steady increase in the cost of power driven by the public policies just described.   The Bureau of Labor Statistics recently announced that the price of electricity hit a record for the month of October,  making it the eleventh straight month when the average price hit or matched the record level for that month, driving up the cost of everything we buy, including food.

By far the best answer — the one that is needed sooner rather than later if we are to prevent these types of problems — is for both the general public and our elected officials to realize that if we continue down this path, we risk a stagnant economy by rejecting the continued use of coal and natural gas for power generation. If, however, these abundant domestic energy sources are fully utilized, it will give us the ability not only to retain our status as the world’s major economic power, but also to build on it.

If federal regulators do a true cost-benefit analysis of the regulations limiting the use of hydrocarbon fuels, we hope they will factor in the risk of failing to utilize our national advantage. We could quickly see our country move from being the world’s leading industrial economy to third-world status.

As history has demonstrated, that does not need to happen.  Our leaders need to look beyond the current election cycle and have the courage and wisdom to develop reasonable and balanced regulation, as their predecessors did. When combined with the free market’s ability to innovate, this could produce results that achieve our collective environmental objectives while maintaining our competitive advantage.

Coal and other hydrocarbon fuels can, and should, remain a key component of our energy supply for the next century just as they did for the last.

Source:   EnergyBiz Magazine November/December 2013


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