National

U.S. coal mines are on the decline: The Energy Information Administration is reporting that the number of active coal mines has fallen to 671 nationwide, from 1,435 in 2008.  

The big picture: It's increasingly clear that the market has chosen natural gas over coal as a more affordable, more efficient power source. During the past decade, the primary factor driving the closure of 764 U.S. coal mines — most of them underground — was simply a steady decline in demand.

Details: Coal consumption, 82% of which stems from electricity generation in coal-fired power plants, has fallen to its lowest point in four decades. Spurring on the decline is a nationwide retreat by power providers from coal-fired electricity generation, which fell by a near-record 14.3 gigawatts last year.

While the coal industry has claimed that regulation is a major driver of coal’s decline, official projections show that U.S. coal production is now expected to fall at a greater rate than it would have under the Obama administration’s Clean Power Plan.

Be smart: The Trump administration's failed attempt to block the closure of the remaining coal-fired unit in the Tennessee Valley Authority’s (TVA) Paradise Fossil Plant made little economic sense. After shutting down two other coal-fired units in the Paradise location in 2017 and replacing them with more efficient gas power generators, the TVA officially voted to close the third on Thursday. This is a trend grounded in the need for efficiency and lower operations and maintenance costs associated with coal units.

What to watch: Now at just 691 million tons, U.S. coal consumption is expected to continue declining, down from 29% to 2% of total electricity production by 2035. This generating capacity will be replaced mostly by less expensive natural gas power plants, whose share is expected to rise from 30% to 37% over the same time period.

The bottom line: With electricity power providers seeking cleaner, more cost-competitive options and the shale revolution unlocking new natural gas reserves, the market — if left alone — will continue to replace coal with natural gas as the dominant fuel source for U.S. electricity.

Richard D. Kauzlarich is a former U.S. ambassador and the co-director of the Center for Energy Science and Policy at George Mason University.

With natural gas on the rise, U.S. market is moving against coal

Since 2008, the number of active coal mines has fallen from 1,435 to 671.

The stacks from the Gavin coal burning power plant tower over the landscape on February 4, 2012 in Cheshire, Ohio. 

The stacks from the Gavin coal power plant in Cheshire, Ohio. Photo: Benjamin Lowy via Getty Images

Energy

Coal

Expert Voices

U.S. coal mines are on the decline: The Energy Information Administration is <a class="gtmContentClick" data-vars-link-text="reporting" data-vars-click-url="https://www.eia.gov/todayinenergy/detail.php?id=38172" data-vars-content-id="51eca37f-6434-410e-89c2-f37908ac66f4" data-vars-headline="With natural gas on the rise, U.S. market is moving against coal" data-vars-event-category="story" data-vars-sub-category="story" data-vars-item="in_content_link" href="https://www.eia.gov/todayinenergy/detail.php?id=38172" target="_blank">reporting</a> that the number of active coal mines has fallen to 671 nationwide, from 1,435 in 2008. The big picture: It&#x27;s increasingly clear that the market has chosen natural gas over coal as a more affordable, more efficient power source. During the past decade, the primary factor driving the closure of 764 U.S. coal mines — most of them underground — was simply a steady decline in <a class="gtmContentClick" data-vars-link-text="demand" data-vars-click-url="https://www.eia.gov/todayinenergy/detail.php?id=37817" data-vars-content-id="51eca37f-6434-410e-89c2-f37908ac66f4" data-vars-headline="With natural gas on the rise, U.S. market is moving against coal" data-vars-event-category="story" data-vars-sub-category="story" data-vars-item="in_content_link" href="https://www.eia.gov/todayinenergy/detail.php?id=37817" target="_blank">demand</a>.

Ominous forecasts about the impact of climate change serve as the backdrop for the world — led by U.S. lawmakers and companies — to debate big action on the problem, which could upend energy systems and our way of life.

Energy & Environment

In the wake of failed talks between U.S. and Chinese trade officials in Beijing 2 weeks ago, the U.S.–China trade relationship continues to founder on uncertainty.  The present impasse, which led to the cancellation of this week's preparatory talks in Washington, seems to be over forced technology transfer and structural reform in the Chinese economy.

Why it matters: Absent a way forward in these two areas, a successful outcome is unlikely to result from the meetings still planned for later this month. With time running out before the March 1 expiration date for the tariff ceasefire, the Chinese economy hovers on the verge of full contraction, and U.S. businesses endure increased costs of stalled negotiations, stoking fears of a U.S. recession. 

The importance of establishing a long-term bilateral agreement between China and the U.S. is difficult to overstate under such circumstances.

U.S.–Chinese trade in goods accounted for more than $635 billion (of $3.9 trillion) in overall U.S. goods trade in 2017.

China was the third-largest export market for American goods and also the U.S.' largest import market.

The risks for energy trade are particularly great. As trade conflict with China increased, Chinese energy imports from the U.S. fell to nearly zero at the end of 2018, which affected the U.S. tanker shipping industry and oil producers. Even if the trade war threat diminishes, it will be difficult to recoup lost market share in the face of competition from Russia and elsewhere.

By escalating the tit-for-tat trade war, President Trump has worked against America’s energy interests, leaving domestic energy firms to struggle with a glut of oil and gas at home. 

What to watch: A high-level meeting between Chinese Vice Premier Liu He, U.S. Trade Representative Robert Lighthizer, and Treasury Secretary Steven Mnuchin has been scheduled for Jan. 30–31. These talks are critical to avoiding the imposition of additional U.S. tariffs on March 1.

The bottom line: As the Trump administration looks ahead to the high-level negotiations, its team will need to focus on advancing a new bilateral agreement. Settling this bilateral trade dispute would also enhance the Trump administration's policy of energy dominance and benefit U.S. oil and gas producers that need the Chinese market to absorb excess domestic energy production.

Time is running out for the U.S. and China to resolve the trade war

The March 1 tariff ceasefire deadline is stoking fears of a U.S. recession.

Liu He, Deputy Prime Minister of the People's Republic of China, speaks at the conference 'The Hamburg Summit 

Liu He, vice premier of China. Photo: Christian Charisius/picture alliance via Getty Images

World

U.S. China trade war

Business

Trade war

In the wake of <a class="gtmContentClick" data-vars-link-text="failed talks between U.S. and Chinese trade officials" data-vars-click-url="https://www.scmp.com/news/china/article/2181261/us-china-trade-talks-beijing-continue-third-day-confirms-us-trade" data-vars-content-id="83d6041d-d08b-4eab-88fd-3992a8cd1c0d" data-vars-headline="Time is running out for the U.S. and China to resolve the trade war" data-vars-event-category="story" data-vars-sub-category="story" data-vars-item="in_content_link" href="https://www.scmp.com/news/china/article/2181261/us-china-trade-talks-beijing-continue-third-day-confirms-us-trade" target="_blank">failed talks between U.S. and Chinese trade officials</a> in Beijing 2 weeks ago, the U.S.–China trade relationship continues to founder on uncertainty. The present impasse, which led to the cancellation of this week&#x27;s preparatory talks in Washington, seems to be over <a class="gtmContentClick" data-vars-link-text="forced technology transfer and structural reform" data-vars-click-url="https://www.ft.com/content/466cc9e2-1e4c-11e9-b126-46fc3ad87c65?emailId=5c478216b8863d0004cb797a&amp;segmentId=60a126e8-df3c-b524-c979-f90bde8a67cd" data-vars-content-id="83d6041d-d08b-4eab-88fd-3992a8cd1c0d" data-vars-headline="Time is running out for the U.S. and China to resolve the trade war" data-vars-event-category="story" data-vars-sub-category="story" data-vars-item="in_content_link" href="https://www.ft.com/content/466cc9e2-1e4c-11e9-b126-46fc3ad87c65?emailId=5c478216b8863d0004cb797a&amp;segmentId=60a126e8-df3c-b524-c979-f90bde8a67cd" target="_blank">forced technology transfer and structural reform</a> in the Chinese economy.Why it matters: Absent a way forward in these two areas, a successful outcome is unlikely to result from the meetings still planned for later this month. With time running out before the <a class="gtmContentClick" data-vars-link-text="March 1 expiration date for the tariff ceasefire" data-vars-click-url="http://fortune.com/2018/12/31/trump-trade-agenda-2019/" data-vars-content-id="83d6041d-d08b-4eab-88fd-3992a8cd1c0d" data-vars-headline="Time is running out for the U.S. and China to resolve the trade war" data-vars-event-category="story" data-vars-sub-category="story" data-vars-item="in_content_link" href="http://fortune.com/2018/12/31/trump-trade-agenda-2019/" target="_blank">March 1 expiration date for the tariff ceasefire</a>, the Chinese economy hovers on the verge of <a class="gtmContentClick" data-vars-link-text="full contraction" data-vars-click-url="https://www.forbes.com/sites/kenrapoza/2018/12/18/trade-war-update-can-stimulus-save-china-from-trumps-tariffs/#20a1d14a31d3" data-vars-content-id="83d6041d-d08b-4eab-88fd-3992a8cd1c0d" data-vars-headline="Time is running out for the U.S. and China to resolve the trade war" data-vars-event-category="story" data-vars-sub-category="story" data-vars-item="in_content_link" href="https://www.forbes.com/sites/kenrapoza/2018/12/18/trade-war-update-can-stimulus-save-china-from-trumps-tariffs/#20a1d14a31d3" target="_blank">full contraction</a>, and U.S. businesses endure increased costs of stalled negotiations, stoking <a class="gtmContentClick" data-vars-link-text="fears of a U.S. recession" data-vars-click-url="https://www.axios.com/the-world-buckles-geopolitical-forecast-baf650ff-70da-4b4b-9947-50a14e21d74a.html" data-vars-content-id="83d6041d-d08b-4eab-88fd-3992a8cd1c0d" data-vars-headline="Time is running out for the U.S. and China to resolve the trade war" data-vars-event-category="story" data-vars-sub-category="story" data-vars-item="in_content_link" href="https://www.axios.com/the-world-buckles-geopolitical-forecast-baf650ff-70da-4b4b-9947-50a14e21d74a.html" target="_self">fears of a U.S. recession</a>.

After a record economic expansion, the coronavirus pandemic sent the U.S. economy into a recession as unemployment soared to staggering heights. The country now faces urgent questions about how much stimulus is needed for reeling consumers and businesses, and what a recovery might look like.

Economy & Business

America’s pipelines and electric grids are vulnerable to major disruptions from “an adversarial attack or natural disaster,” according to a recent Department of Energy (DOE) plan. But DOE’s proposed near-term solution — ordering electrical grip operators to buy electricity from coal and nuclear power producers — misses the point. “Fuel security and diversity” are not the most critical measures for enhancing grid resiliency — robust cybersecurity is.

The big picture: Technological improvements to the production and transmission of electricity promise plentiful and cheap power. But technology has introduced cybersecurity vulnerabilities that are independent of how the energy is produced. These weaknesses are the real threat to grid resilience, and subsidies for failing coal and nuclear plants will not address them. 

Federal policies favoring increasingly uncompetitive fuel sources deflect from the real  threats to U.S. energy infrastructure. Natural gas, for example, has become a significant primary fuel source for electrical power and plays a key role in reducing carbon dioxide emissions from electricity generation. Ensuring the cybersecurity of our electric grid will therefore entail securing a million miles of natural gas pipelines.

The private sector — the owners and operators of the U.S. energy system, and the owners of the technology — understands this. For example, pipeline operators already share cyberthreat intelligence with industry and government clearinghouses. And electric grid operators recognize that protecting the grid is more complicated than the “gates, guns and guards” required for physical infrastructure.

The bottom line: Vulnerabilities to cyberattacks that technology and microgrids introduce must be addressed. But because coal and nuclear plants are just as susceptible to hackers as gas and renewable-fueled power systems, coal and nuclear subsidies will not do so, even in the near term. Rather, government and energy producers must work together to develop comprehensive cybersecurity measures. 

Cybersecurity is the real threat to grid resilience

Focusing on coal and nuclear power distracts from grid infrastructure threats.

A Chevron oil field along Highway 58 is a hub of activity and appears to be pumping oil and natural gas at near full production on March 28, 2017, near McKittrick, California. 

A Chevron oil field near McKittrick, California. Photo: George Rose via Getty Images

Cybersecurity

Technology

Politics

America’s pipelines and electric grids are vulnerable to major disruptions from “an adversarial attack or natural disaster,” according to a recent Department of Energy (DOE) <a class="gtmContentClick" data-vars-link-text="plan" data-vars-click-url="http://thehill.com/policy/energy-environment/390201-trump-administration-to-use-emergency-authority-to-boost-coal" data-vars-content-id="e3f904cb-f8da-4d57-aae7-2e240171e9b9" data-vars-headline="Cybersecurity is the real threat to grid resilience" data-vars-event-category="story" data-vars-sub-category="story" data-vars-item="in_content_link" href="http://thehill.com/policy/energy-environment/390201-trump-administration-to-use-emergency-authority-to-boost-coal" target="_blank">plan</a>. But DOE’s proposed near-term solution — ordering electrical grip operators to buy electricity from coal and nuclear power producers — misses the point. “Fuel security and diversity” are not the most critical measures for enhancing grid resiliency — robust cybersecurity is.The big picture: Technological improvements to the production and transmission of electricity promise plentiful and cheap power. But technology has introduced <a class="gtmContentClick" data-vars-link-text="cybersecurity vulnerabilities" data-vars-click-url="https://www.energy.gov/sites/prod/files/2017/01/f34/Cyber%20Threat%20and%20Vulnerability%20Analysis%20of%20the%20U.S.%20Electric%20Sector.pdf" data-vars-content-id="e3f904cb-f8da-4d57-aae7-2e240171e9b9" data-vars-headline="Cybersecurity is the real threat to grid resilience" data-vars-event-category="story" data-vars-sub-category="story" data-vars-item="in_content_link" href="https://www.energy.gov/sites/prod/files/2017/01/f34/Cyber%20Threat%20and%20Vulnerability%20Analysis%20of%20the%20U.S.%20Electric%20Sector.pdf" target="_blank">cybersecurity vulnerabilities</a> that are independent of how the energy is produced. These weaknesses are the real threat to grid resilience, and subsidies for failing coal and nuclear plants will not address them.

The No Oil Producing and Exporting Cartels Act (NOPEC) — previously introduced during both the Bush and Obama administrations — remains relatively under the radar, but could rattle global oil markets. 

The big picture: The bill aims to weaken the Organization of the Petroleum Exporting Countries (OPEC) by removing sovereign immunity from states that cooperate to influence oil production, thereby allowing for antitrust action. If enacted and enforced, it could trigger oil price fluctuations, market instability and new risks to U.S. foreign relations.

The impact: Although the Trump administration wants to curb OPEC’s power, the organization's presence in recent years has brought price and trade stability to one of the world’s most valuable and strategic commodities.

Targeting OPEC with U.S. legal action could cause OPEC and non–OPEC oil-producing states (such as Russia and Azerbaijan) to retaliate. With OPEC accounting for over 40% of world oil output and with G-20 powers as key international oil consumers, the U.S. could face backlash from other consumer allies in Europe and Asia if NOPEC is seen as destabilizing oil markets and commodities prices.

Price volatility could be especially detrimental to U.S. oil producers, now the number one source of global oil supply and a driving force behind American economic growth.

Where it stands: OPEC has announced that it won’t meet in April and will observe how market reacts to U.S. sanctions on Iran and the crisis in Venezuela. This implies OPEC might consider increasing oil output to maintain price stability.

If NOPEC were to become law during that period, any cooperation with the U.S. to maintain stable oil prices would be unlikely and could limit collaboration in the foreign policy realm as well.

What to watch: The U.S. could influence OPEC by increasing oil and natural gas exports, as noted by Brookings Institution researchers, who argue that market solutions are available to stabilize prices.

The bottom line: NOPEC threatens to undermine economic growth, undercut U.S. commitments to international law and alienate trade partners. Increasing American oil infrastructure and exploration capacity would offer a sounder path toward energy dominance.

NOPEC bill risks volatile oil prices and blowback from U.S. allies

If enacted, it could ultimately hurt U.S. oil producers.

Rep. Steve Chabot (R–Ohio), sponsor of the House NOPEC bill. Photo: Bill Clark/CQ Roll Call

OPEC

The <a class="gtmContentClick" data-vars-link-text="No Oil Producing and Exporting Cartels Act" data-vars-click-url="https://secure-web.cisco.com/11rKx3RAz5x5B1vWMrKlm0usuxqKFIvrrPOQzkkuuNLGEZxve2wFvUword_YORrZ12uJOQn93uBsUwZXGR5O1oRzwR5Fu9dEmO0Dz3C0dYQGMS-0Iw7Brv7VewpW7MX0liQNtOFHyDCGb10WI1udflUm--gmvSgm2qGtLU2E2eFTRSHMUTJ9uJCgFRktmr8ko6JShJfes8aQWSNJ95AEBCHax_seywVz8SK2WUzX6SNpZMtu4FrpKLMxbmD-DoIPogz07ftyh1eJj936ZT4CYLPwaSOSKD8eMF6uPD69uUdzvCtiXennFidHBrTRAIidLuuWh3CaBigB3qcmU9bVMDJW3jf7qXEFRmcYVweThTN9ADarX3SE3J6f29jC1Cll0fsbwVBJ9GP_0NYleyHS23Z6xhqtuKSypRBbODL7qcHcGM2F-kYQ_WiMCgVabplXQ/https%3A%2F%2Fwww.congress.gov%2Fbill%2F116th-congress%2Fsenate-bill%2F370%2Ftext" data-vars-content-id="ed46f53c-e695-4a34-a73f-21915e65f247" data-vars-headline="NOPEC bill risks volatile oil prices and blowback from U.S. allies" data-vars-event-category="story" data-vars-sub-category="story" data-vars-item="in_content_link" href="https://secure-web.cisco.com/11rKx3RAz5x5B1vWMrKlm0usuxqKFIvrrPOQzkkuuNLGEZxve2wFvUword_YORrZ12uJOQn93uBsUwZXGR5O1oRzwR5Fu9dEmO0Dz3C0dYQGMS-0Iw7Brv7VewpW7MX0liQNtOFHyDCGb10WI1udflUm--gmvSgm2qGtLU2E2eFTRSHMUTJ9uJCgFRktmr8ko6JShJfes8aQWSNJ95AEBCHax_seywVz8SK2WUzX6SNpZMtu4FrpKLMxbmD-DoIPogz07ftyh1eJj936ZT4CYLPwaSOSKD8eMF6uPD69uUdzvCtiXennFidHBrTRAIidLuuWh3CaBigB3qcmU9bVMDJW3jf7qXEFRmcYVweThTN9ADarX3SE3J6f29jC1Cll0fsbwVBJ9GP_0NYleyHS23Z6xhqtuKSypRBbODL7qcHcGM2F-kYQ_WiMCgVabplXQ/https%3A%2F%2Fwww.congress.gov%2Fbill%2F116th-congress%2Fsenate-bill%2F370%2Ftext" target="_blank">No Oil Producing and Exporting Cartels Act</a> (NOPEC) — previously introduced during both the Bush and Obama administrations — remains relatively under the radar, but could rattle global oil markets. The big picture: The bill aims to weaken the Organization of the Petroleum Exporting Countries (OPEC) by removing sovereign immunity from states that cooperate to influence oil production, thereby allowing for antitrust action. If enacted and enforced, it could trigger oil price fluctuations, market instability and new risks to U.S. foreign relations.

Richard Kauzlarich

Stories

NOPEC bill risks volatile oil prices and blowback from U.S. allies

With natural gas on the rise, U.S. market is moving against coal

Time is running out for the U.S. and China to resolve the trade war

Cybersecurity is the real threat to grid resilience