When people talk about “big government,” they may be referring to the reams of paper the government uses each month to print reports. Take the Energy Information Agency, for example. It has just issued its monthly report on energy production for June, 2019. The report is 272 pages long. Who in their right mind is going to read all that verbiage?
The answer is, the folks at Utility Dive, that’s who. They have read every word, studied every chart, and report that the numbers show the amount of electricity generated in the US by coal fell by more than 13% in the first half of this year. During that same time, electricity from solar power grew by more than 10%. Natural gas also saw an increase of 6%.
The EIA says it expects coal to generate less than one quarter of the nation’s energy this year compared with about half only a decade ago. Clearly, coal power is in decline and sinking fast.
“It’s no mystery why coal is on the way out,” says Grant Smith, a senior energy policy advisor at the Environmental Working Group. “Old plants get increasingly expensive to run as they age and can readily be replaced by cheaper, cleaner and safer renewable energy sources. The industry’s hope that carbon capture technology will save coal is a pipe dream,” he adds. “Coal will never again be able to compete with solar and wind energy. There is simply no rationale for continued support of coal.”
The investment community is starting to agree. According to Utility Dive, Moody’s Investors Service downgraded its advice on the coal sector from stable to negative last week due primarily to an expected 3% decline in earnings in the second half of 2019 and a slide in profitability over the next year to 18 months.
“A confluence of economic, environmental and social factors also increase our concerns about the industry’s longer-term demand prospects, as pressure on the industry is mounting,” Moody’s said in a research note. It claims the downward trend will make “numerous coal mines uneconomic in a reduced demand environment, especially smaller, higher cost mines that are highly vulnerable to retirement of specific coal-fired power plants.”
Moody’s said its long-term outlook for US thermal coal “calls for a substantial volume reduction over the next decade driven by utilities switching to natural gas and renewable energy.” It goes on to say coal producers have a good supply of orders through the end of this year but “many have substantial open positions beyond that.” That’s code for “Nobody wants to buy your climate killing, death dealing coal any more.”
It’s all a result of the implacable force called capitalism, which ruthlessly seeks the lowest possible price in all situations. Once upon a time, coal held an economic advantage, but no more. Renewables such as wind and solar are cheaper than coal today. Soon they will be cheaper than natural gas and another fossil fuel will go the way of the dinosaurs. That can’t happen too soon if humanity hopes to avoid turning the Earth into a lifeless cinder.