Must read: Ernest Dumas explains why coal is dead, no matter how much Donald Trump, Leslie Rutledge, Arkansas congressmen and the State Chamber of Commerce and others talk about overturning clean power rules. The future is gas, wind and solar.
By Ernest Dumas
Needing solace days after the Trump election in November, an old friend who has spent his long career in industry and government working for cheaper, cleaner energy and healthier air and water telephoned his mentor, Amory B. Lovins, the great physicist and environmental scientist who originated the “soft path” for achieving energy independence and a healthier world. More than anyone, Lovins is the father of the clean, renewable energy movement that is the chief hope for staving off global devastation.
Only seven years earlier Donald Trump had signed a full-page ad in The New York Times demanding that President Obama adopt an audacious plan to halt global warming and protect Americans’ health from atmospheric poisons, but as with so many other issues, like abortion, war and health care, his last campaign promises went dramatically in the opposite direction. Is all lost?, my friend asked Lovins.
“Work hard, make money and love, travel and be happy,” the old oracle replied cheerily. The free market’s natural search for cheaper and more efficient energy has taken over and even President Trump and a governing party heavily in denial about climate change cannot stop it, he said. My friend passed the balm on to me.
Lovins may have been in a little denial about how much harm Trump’s energy and environmental policies, such as he is able to implement, will bring to the planet and our little corner of it between the Mississippi and Red Rivers, but he was mostly right. Despite Trump’s promise to applauding unemployed coal miners and a largely sympathetic public that he would “bring back coal” and their jobs by scuttling President Obama’s clean-power plan, it won’t happen. The president of the largest privately held coal company said the next day, “He can’t bring them back.” Obama was not coal’s problem; it was the market.
I was reminded of Lovins and his uplifting message for my friend the other day when I was perusing the testimony in a little rate case at the Arkansas Public Service Commission. If you are an electricity customer of Entergy Arkansas, the state’s biggest power supplier, you will detect a little jump in your monthly bill in a few weeks as the company recovers from you some $2.6 million it lost dealing with the coal companies that supply fuel for its Independence and White Bluff power plants. The loss actually was $7.1 million but Entergy’s partners will have to recover the rest. There could be more of that later, especially if the president can sway things, but the Public Service Commission, which was complicit in perhaps the cause of Entergy’s coal-buying fiasco in 2015, will see to it that it doesn’t happen again in Arkansas.
This is probably too complicated to explain here, but it’s important to understand how power generation and distribution work. Entergy has a bunch of generating plants powered by coal, nuclear, gas and water and shortly by solar and wind, but which plants in which companies actually generate the power on any given day is determined by a regional independent operator (now MidContinent), based partly on the generating costs at each plant. Coal used to be dirt cheap, but with the surge of hydraulic fracturing natural gas has become a competitor, and solar and wind have become competitive with the availability of federal tax credits. Usage of the coal plants sank from 75 percent to 45 percent from 2014 to 2016.
Entergy had signed long-term contracts for the mandatory delivery of coal from the Powder River Basin in Wyoming, but when gas replaced coal as the cheap fuel and Independence and White Bluff were idled Entergy found itself with vast stockpiles it could not use and more coal coming. It found buyers for 1.25 million tons of its stockpiles but at $7.1 million less than it paid for it. Ratepayers of Entergy and other power companies will make it up.
But that was not an aberration, as most everyone but Trump should know. Gas is now so overabundant and cheaply accessible that exploration companies are pulling up rigs. Coal is not coming back, either for power generation, for coking or other uses. Coal accounted for half of the nation’s electricity in 2000. Now it’s 16 percent and it will continue to decline, though perhaps more slowly, even with Obama’s Clean Power Plan neutered. Arkansas, which was one of the states most under the gun owing to its continuing to build coal capacity after the rest of the country stopped, was moving rapidly toward meeting its goal for reducing atmospheric carbon. Entergy bought a giant gas plant near El Dorado and is venturing into solar and wind power.
But Arkansas’s entire congressional delegation, the state attorney general and the state chamber of commerce wanted the Clean Power Plan crushed, the Environmental Protection Agency neutered and coal’s dominance celebrated, even though no one in Arkansas, even if they own coal shares, would benefit, as they assuredly will from the expansion of natural gas, solar and wind generation.