The Tennessee Valley Authority (TVA) has decided to shutter eight coal-burning generating stations at three locations in Alabama and Kentucky, yet another blow to the beleaguered coal industry. Only four decades ago, TVA got 80 percent of its power from coal. Today it is 38 percent and dropping fast.
TVA is emblematic of a national trend away from King Coal, our most abundant energy resource, driven by environmental concerns and increasing competition from lower cost natural gas. The trend is abetted by the Obama administration which is enforcing tougher emissions standards on coal fired generation plants and cracking down on public financing for coal plants overseas. Not so long ago coal was king; today it is a pawn in the great global campaign to combat global warming.
Without question, reducing our dependence on coal is helping us reduce our carbon footprint. U.S. energy-related carbon-dioxide emissions declined 3.8 percent in 2012 to the lowest level since 1994, even though the economy grew 2.8 percent.
However, essentially none of this can be attributed to renewables, such as solar and wind power. The overall contribution of renewable sources to our energy mix is downward as gains in sun and wind power are offset by losses of hydraulic power associated with the demolition of dams. Even so, thanks to natural gas, we are making progress reducing greenhouse gases.
But while this welcome trend may help us feel more virtuous about our efforts to curb global warming, it doesn't amount to much in the overall scheme of things. Coal remains the fuel of choice for many nations around the world, most notably China where economic growth trumps environmental concerns. Many other nations, such as Poland, remain committed to coal for electrical generation. And in the third world where millions of people still live without electricity, coal is still seen as the cheapest path to modernization.
Thus, the overall picture remains muddled. Worldwide, carbon dioxide emissions from the burning of fossil fuels and production of cement rose 2.1 percent in 2012, compared with 2011, and are projected to rise by a similar amount in 2013. Since 2000, the growth of such emissions has averaged about 3 percent.
We still derive 39 percent of our electricity from coal; 27 percent from natural gas. What we really need is a cost-effective technology to burn coal cleanly. The best hope for that would appear to be Southern Company's new Kemper County plant in Mississippi that will begin operations next year. It is designed to meet Environmental Protection Agency standards with a new process that extracts pollutants and then sells them rather than burning or dumping them. Predictably, the plant is over budget but that is to be expected with new technologies. If it works and can be operated cost effectively, it might pave the way for revolutionary clean coal projects in the future.
Jerry Jasinowski, an economist and author, served as President of the National Association of Manufacturers for 14 years and later The Manufacturing Institute. Jerry is available for speaking engagements.