Column: Coal still a necessary resource

Gary Wolfram

Recent severe weather events have brought attention to the need for a dependable supply of electricity. Lack of power for hospitals, homes, schools, and businesses creates major difficulties. Ask anyone who lives in Puerto Rico what it is like to be without power.

The United States is in the midst of a transition from primarily coal-generated electricity to natural gas, and eventually renewable energy. There are myriad reasons. The price of natural gas has fallen due to advances in horizontal drilling and fracking. The price of solar panels has also fallen substantially, and a record low price for wind power was recently set in Mexico. Over time we will be moving to a grid that is supported by a range of power supplies.

In the meantime, it is important to make sure there is a consistent source of electric power, and that coal remains part of that mix. Natural gas prices have the potential to be volatile and there is a need to expand the pipeline infrastructure for natural gas. Although battery technology is under development, there will be a need for power that is constantly available.

Coal remains the largest source of electric power in Michigan, generating 3.62 million mwh of power, as of August 2017 (latest data available). This was followed by nuclear power at 3.03 million mwh, which will be decreasing with the expected closure of the Palisades nuclear power plant within the next five years. Natural gas was the third largest supplier of electric power with 2.49 million mwh.

A major benefit of coal is that it is readily available. The U.S. Energy Information Administration's most recent estimate is that U.S. recoverable coal reserves would last about 280 years. This is surely enough time to transition to other energy sources. Electricity from coal is not subject to intermittency and thus can serve during the transition to renewable energy, provided a way is found to store renewable electricity when it's not being generated. It's expected that coal will continue to be needed as a source of power to deal with unforeseen disruptions in natural gas or renewable power supply.

The prior administration burdened coal-powered electricity plants with substantial regulations that threatened their existence. It was never substantiated that the benefits from such regulation came close to exceeding the costs to the economy. Current EPA Administrator Scott Pruitt intends to reduce some of the regulatory burden on the coal industry. This will make for a more reliable electric grid and reduce the national cost of electricity production. In turn, this will reduce the cost of production of goods in the U.S., resulting in lower prices and a more competitive position for U.S. manufacturing.

As we transition to new power forms, attempts to swiftly eliminate the use of coal are ill-advised and will reduce the reliability of our electric grid as well as increase the cost of power for Michiganians.

Gary Wolfram is the William Simon Professor of Economics and Public Policy at Hillsdale College.