The role of coal in the US energy economy: Interfuel competition, environmental concerns, and the impact of utility restructuring

This paper briefly examines the role coal plays in the US energy economy and its competition with nuclear power, and then in greater detail the impact of environmental regulation, changes in utility regulation, and inter fuel competition on the future of coal. The US as the world's number two coal producer, shares many of the same problems and concerns as China, the world's number one coal producer. The use of coal in electric generation has been and will continue to be the only growth sector for the coal industry. The steel industry remains in permanent long-term decline. Forecasts vary, but there are indications that even in conservative forecasts, there is more down side risk than upside potential. Poor performance in the nuclear power sector can be expected to favorably impact coal consumption in the long term. Continued escalation of operating costs could erode any cost advantage that nuclear plants currently enjoy. However, environmental concerns could also escalate operating costs for coal fired plants. Also, concern over the greenhouse effect may lead policy makers to reexamine the nuclear option of inherently safe reactors. The greatest challenge to expanded use of coal comes from environmental concerns. Acid rain is a complex political, economic, and scientific issue. Clean coal technologies are seen by many as the answer to the threat posed by various forms of clean air legislation and regulation. Significant changes in the regulatory environment for electric and gas utilities and technological developments are likely in the 1990's to alter the nature of the electric generation industry