Published on August 10th, 2019 |
by Tina Casey
Rumble In PA: Coal-Killing Natural Gas Has A Field Day In Top US Coal State
August 10th, 2019 by Tina Casey
The carnage in the US coal industry continued last week as yet another energy company in yet another leading coal producing state took steps to shut down yet another large coal power plant. Adding to the hurt, the plant will shut down many years before its operating license expires. Cannibals! Quick, call the Commander-in-Chief! Didn’t he promise to save “all your coal jobs?” If he doesn’t pick up the phone, go check your local golf club, chances are you’ll find him out there.
What’s Killing Coal In Pennsylvania
The latest news involves Pennsylvania, which isn’t typically the first Appalachian state that comes to mind when the topic of coal comes up (West Virginia and Kentucky usually do the honors). However, the state has been an epicenter for US coal production since the early days and still ranks #3 behind Wyoming and West Virginia.
Unfortunately for coal stakeholders, the Keystone State is also a hotbed for low cost shale gas. The latest closure involves the last remaining unit at FirstEnergy Solution’s Bruce Mansfield coal power plant in Beaver County, Pennsylvania.
In a press release yesterday, FirstEnergy Solutions placed the blame squarely in the lap of “a lack of economic viability” and they are not letting the grass grow under their feet. Under a previously accelerated schedule the plant was not supposed to close for another two years. Now the plan is to ditch it by November 7 of this year.
Bloomberg teased out the natural gas angle last week (break added):
Bruce Mansfield was the state’s biggest coal-fired power plant but struggled to compete against cheap natural gas flowing out of nearby shale formations.
One of its biggest supporters was Robert E. Murray, chief executive officer of Murray Energy Corp. and a major supplier for the complex. He lobbied the Trump administration for policies that would help the facility…
You can expect a tweetstorm of outrage any minute now from the President* over this slap at Murray Energy. After all, the President has relied on Murray himself to formulate key items in his energy policy.
In fact, just last month the President himself spoke at a high dollar private fundraiser for the Republican National Committee reportedly hosted by Bob Murray himself.
Signs of a fissure have been ominous, though. As one indicator that failure is an orphan, the President touted oil and gas during his 2019 State of the Union address, but hung coal out to dry.
More recently, last month the President took stock of his administration’s environmental achievements in a public speech. He made plenty of room for natural gas but ghosted coal, even though the Energy Department’s “clean” coal and carbon capture initiatives are still active.
Maybe don’t hold your breath for that tweetstorm of outrage.
What’s Killing Coal Way Ahead Of Schedule In Pennsylvania
Reporter Anya Litvak of the Pittsburgh Post-Gazette has more (much more) of the scoop on the latest carnage in the US coal industry. Follow the link to support local journalism:
The owner of the Bruce Mansfield coal-fired power plant in Beaver County, the largest in the state, said the facility will shutter in November, nearly two years ahead of an already truncated schedule.
Bankrupt FirstEnergy Solutions Corp. blamed a “lack of economic viability in current market conditions” for the decision to close the remaining unit still operating at the plant.
Ouch! For a deep dive into the bankruptcy proceedings swirling around the closure, follow that Post-Gazette link. Be warned: it ain’t pretty.
Meanwhile, Litvak reports that Bruce Mansfield’s operating license was not due to expire for “decades.” A fire knocked out two of its units a while ago and it looks like natural gas took care of the rest.
A dip in demand may have also contributed to unfavorable economic conditions for the power plant, and then there’s that thing about an expired license for dumping wastewater and stormwater into nearby rivers, but now that’s all water under the bridge, so to speak.
Natural Gas Riding High, For Now
If you’re looking for a role in renewable energy in all this, keep looking. Pennsylvania is one of those slower-to-adopt wind and solar states. Signs of an uptick in activity are in the air, but the state’s wind ranking is currently a mediocre #18 and its solar ranking is #22.
So far the story is all about natural gas, and natural gas stakeholders in Pennsylvania are not taking any chances.
They are probably looking at competitive costs for wind and solar in other states where local energy policy makers are beginning to favor renewables-plus-storage over building new natural gas peaker plants.
Another gas-killing trend is the building electrification movement, which is rapidly gathering steam. Green chemistry — including renewable hydrogen, for example, — is another factor eating into the natural gas market.
One natural gas market that seems to be holding steady is plastics, and that brings us right back around to Beaver County.
In one of life’s little ironies, Shell Chemicals is nearing completion of a major new ethane cracker right there in Beaver County (ethane is a component of natural gas, widely used in plastics, resins, and other petrochemical products).
The President was slated to visit the Shell facility last Tuesday but cancelled, reportedly in light of last weekend’s domestic terror incidents in El Paso and Dayton. As of this writing the trip has not been rescheduled. It’s a good guess that would happen sometime after the sting of the Bruce Mansfield announcement wears off.
Where were we? Oh right, the new ethane cracker will breathe more life into natural gas production in the region, and apparently the state is already laying the groundwork for attracting four additional ethane crackers.
As for where that leaves coal, CleanTechnica is reaching out the US Department of Energy for some insights into alternative markets that (wish us luck!).
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Image (screenshot, cropped): via US Department of Energy.