CHICAGO — Predictions of coal’s demise in the United States may be greatly exaggerated.
Natural gas prices at a four-year high have utilities shifting to coal to generate 4.519 million megawatt-hours a day, the most since 2011, government data show. Within three years, coal’s share of power production could climb to 40.3 percent from about 39 percent last year, while gas’s share will probably drop to 27 percent from 27.5, the U.S. Energy Information Administration said.
An arctic blast has helped put the U.S. on pace for the coldest winter in more than 30 years through January, prompting utilities to burn more of the less expensive coal. The U.S. is poised to emit the most carbon dioxide in three years, undermining President Barack Obama’s efforts to reduce pollution and steer utilities away from the fossil fuel.
“The idea of coal disappearing is not an effective climate change policy,” said John Thompson, an analyst at the Boston-based Clean Air Task Force. “Coal use is growing.”
He said implementing technology that allows utilities to capture carbon is better than trying to eliminate coal because other countries are increasing use of the fuel.
Coal on the New York Mercantile Exchange has risen 13 percent to $57.40 a ton as of Feb. 12, from its 12-month low of $50.84 on Sept. 4. Gas has surged 56 percent to $5.168 per million British thermal units. Prices reached $5.557 on Jan. 29, the highest since January 2010.
Point, counterpoint
Temperatures during the heating season, which runs from November to March, have been below the 20th century average, with December coming in the coldest since 2009, according to the National Climatic Data Center.
U.S. electricity output in the week ended Feb. 8 was 11 percent higher than the same week a year earlier, data from the Edison Electric Institute, a Washington-based group that represents power companies, show.
That’s helped to push gas prices up more than 50 percent from a year ago while coal prices have slipped 1.9 percent during the same period. An average U.S. natural gas plant can make a profit of $3.04 a megawatt-hour, based on March prices, compared with a profit of $31.58 for the typical coal-fired generator, data compiled by Bloomberg show.
The counterargument for coal’s rebound is that a return of mild winters combined with record gas production could knock back gas prices, making coal less competitive to burn, said Lucas Pipes, an analyst at Brean Capital in New York.
Coal commanded 50 percent of total U.S. electricity. generation as recently as 2005. It sank to a record low of 37 percent in 2012 as gas prices tumbled to a 10-year low of $1.902 in April of that year.
Burning coal emits 205.7 pounds of carbon dioxide per million British thermal units compared with 117 for natural gas.
