November 2, 2013 | Comments Off
There are a lot of reasons why America’s Appalachian coal country is suffering. Some point to the rise of domestic shale gas that is displacing coal at power plants, in what’s called coal-to-gas switching. But coal-to-call switching is also hurting Appalachian coal country. It’s not just that power plants are switching away from coal completely, it’s that power plant operators have been sourcing their coal from Wyoming’s Powder River Basin instead of Appalachia for years.
Here are two charts that show this multi-decade transition:
We see the same story by looking at the rank of coal (Wyoming’s Powder River Basin is “sub-bituminous”:
The origins for this coal-to-coal switching lie in the sulfur content of eastern and western coal. Western coal has lower sulfur content, and with more stringent sulfur air emissions rules, burning western coal was the cheaper option.
Western coal is still competitive because of geology: most of the ‘easy’ coal has already been mined in Appalachia, leaving the harder to reach, more expensive coal seams. Put it all together and this is what it looks like when you map it out (via EIA). Darker areas represent lower costs for Wyoming coal, lighter areas Appalachian:
At the end of the day, for many power plants, sourcing western coal is cheaper than Appalachian coal.
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