As we watch the international community stumble through the energy transition, we’re witnessing missteps at just about every turn. The war in Ukraine has allowed Putin to weaponize energy, upending energy markets and threatening fuel shortages across Europe. A growing list of affected countries are turning back to reliable coal by reopening plants or delaying plant retirements. Coal-fueled energy production is set to increase in countries like France, the Netherlands, Greece, Italy, Austria and Germany.
We know the benefits of keeping reliable, affordable coal in the energy mix. As other countries realize the importance of coal in stabilizing energy prices and insulating their citizens from the whims of dictators, the upcoming winter months will reveal if they adjusted their energy policies quickly enough to avoid disaster. What is entirely clear, however, is that it is essential for countries to keep a diverse energy portfolio that includes coal, and the U.S. is no different.
Domestic Resources for Energy Security
With so much attention on the war in Ukraine and the energy crisis in Europe, it’s easy to forget that those of us at home in the U.S. are also susceptible to serious energy issues.
The U.S. must ensure that we are using homegrown energy resources to support our economic and energy needs, this winter and beyond. America is home to the world’s largest coal reserves. And while I previously highlighted that U.S. coal exports can aid our European allies this winter, that doesn’t mean that our policymakers are immune to making the same mistakes here at home that forced our European friends to look abroad for support.
U.S. lawmakers must avoid a recurring too-little-too-late trend that is taking hold elsewhere in the world when it comes to keeping coal in the energy mix.
Reliable and Affordable Coal
With abundant coal resources at home, putting all of our energy eggs in the natural gas basket makes little sense. Yet, despite soaring natural gas prices that hit a 14-year high this summer, reliance on gas and an overstretched gas delivery system continues to grow. Further coal plant retirements – and a regulatory agenda that only aims to accelerate those retirements – means consumers are rapidly losing the balance provided by coal generation that had long been a shield against price volatility.
As we move into the winter months, the EIA warns that homeowners heating with natural gas and heating oil can expect a bill increase of a staggering 28% and 27%, respectively. Natural gas has also driven rising electricity prices. According to the Consumer Price Index, electricity prices are up 15.5% over the past year, the largest jump in four decades. Natural gas prices are up a staggering 33.1% in the same period. Americans need dispatchable fuel diversity to underpin affordability. If we continue to dismantle the coal fleet, expect higher prices and a less reliable supply of power.
Coal is Key to Fuel Diversity
Decommissioning, then reviving plants is not sound policy. It’s past time to recognize the importance of the current U.S. coal fleet that provides fuel diversity and unmatched security when we need it most.
Instead of working to ensure our country is maintaining a stable grid, legislators are doubling down on failed policies and relying too much on intermittent and volatile generation sources, despite clear warnings from Europe, the recent grid catastrophe in Texas and even the threat of blackouts in New England this winter. The time to ensure we are setting up our future energy grid for success is now.