The Decline of Coal in the Southeastern United States

Moneybox
A blog about business and economics.
Dec. 6 2012 8:44 AM

The Decline of Coal in the Southeastern United States

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Here's a striking chart from the Energy Information Agency about the extent to which the boom in natural gas is hammering domestic coal use, even in the most coal-ed up region of the country.

Part of the context for understanding this chart is that there's a ton of path-dependency in electricity generation. Building a brand new power plant is very expensive compared to operating one, for almost any kind of power plant. So to take a place where there are already a whole bunch of coal-fired plants and see this short-term decline is striking. What's happened is that the increasing cheapness of natural gas has changed the dispatch order in the region. Traditionally, coal used to be your go-to fuel for 24/7 power generation and then gas would surge on or off according to demand. Cheap gas means more reliance on gas for baseload and much less coal consumption. In the longer term, this means people won't build new coal plants and we'll get substantially cleaner air.

Matthew Yglesias is the executive editor of Vox and author of The Rent Is Too Damn High.