Who Killed Coal?

by Stuart Shapiro

The coal industry is in dire trouble.  And Republicans like to blame President Obama and environmentalists for it.  While the President and requirements for reductions in emissions associated with coal fired plants deserve some of the blame/credit, the chief reason for coal’s demise is the market.

Nine years later, two of Salem Harbor power plant’s generating units are still operating and the other two, including an oil-fired unit, closed last December.

Now, however, the prospect of long-lasting cheap natural gas supplies has sealed the fate of the plant. In August, Footprint Power, run by a group of former utility executives, bought the 60-year-old plant from Dominion Resources and announced they would tear it down in 2014 and replace it with a cleaner, more economical natural-gas-fired unit.

The explosion of the natural gas industry over the past decade is one of the most important and under-appreciated changes in energy and environmental policy.  It is good from a climate change standpoint and it will reduce our dependence on foreign oil.  Of course it comes with its own baggage (see fracking).  And it is helping to kill the coal industry.

By: Stuart Shapiro

Stuart is a professor and the Director of the Public Policy
program at the Bloustein School of Planning and Public Policy at Rutgers
University. He teaches economics and cost-benefit analysis and studies
regulation in the United States at both the federal and state levels.
Prior to coming to Rutgers, Stuart worked for five years at the Office
of Management and Budget in Washington under Presidents Clinton and
George W. Bush.