How will natural gas affect coal?

Share this article
An interesting trend is going on in Pennsylvania. Cassandra Sweet of the Wall Street Journal reports that the Marcellus Shale is providing so much natural gas, pipeline capacity can’t keep up with shipments. The effect is that regional natural gas prices have dropped significantly below benchmark U.S. prices this year, cutting electricity costs and driving some of the area’s coal-fired power plants out of business.

An interesting trend is going on in Pennsylvania. Cassandra Sweet of the Wall Street Journal reports that the Marcellus Shale is providing so much natural gas, pipeline capacity can’t keep up with shipments. The effect is that regional natural gas prices have dropped significantly below benchmark U.S. prices this year, cutting electricity costs and driving some of the area’s coal-fired power plants out of business. Says Sweet,

“Coal, which for decades accounted for more than half the electricity generated in the U.S., lost market share, declining to 37% last year. More than 100 coal-burning electric generators have been shut since 2011, both because of low power prices and because the federal government issued tighter pollution limits for power plants.”

While in other parts of the country prices are not as remarkably low as Marcellus, and coal has a somewhat larger share of the market, what effect might a continued boom in U.S. shale gas have on the call for cleaner coal standards? Will natural gas naturally move in to fill the gap without government intervention? And what light does this cast on the already high cost overruns of the Kemper clean coal plant if a cheaper source of electricity is available?

Sweet, Cassandra. “In Appalachia, Coal Struggles to Compete With Natural Gas.” The Wall Street Journal. 1 Dec. 2013.

, , , ,

No comments yet.

Leave a Reply

4 × 1 =