Natural gas to surpass coal in generation of electricity

WHEELING – Robert Murray said if the U.S. Energy Information Administration’s projection that natural gas will surpass coal as a fuel used for electricity generation by 2040 comes to pass, it will hurt “our families, our region and our country.”

However, R. Dennis Xander, past president and member of the Independent Oil and Gas Association of West Virginia, said the continued emergence of Marcellus and Utica shale natural gas does not need to work against the coal industry, as he said “co-firing” power plants with gas and coal could be an option for the future.

The new federal report predicts that by 2040, 35 percent of U.S. electricity generation will come from natural gas, while only 32 percent will come from coal. The remainder will come from nuclear power and renewable sources such as wind, solar and hydroelectric.

By comparison, federal statistics show 42 percent of U.S. electricity came from coal in 2011 with 25 percent being drawn from natural gas. In 1993, 53 percent came from coal with only 13 percent coming from natural gas. Currently, nearly all of West Virginia’s electricity comes from coal, as does most of Ohio’s.

“The Obama Administration has been encouraging natural gas use, while destroying coal mining and utilization, at every turn,” said Murray, founder and CEO of St. Clairsville-based Murray Energy Corp. Among the several coal mines the company operates are the Century Mine near Beallsville, the Powhatan No. 6 Mine, as well as the “Ohio County Mine” and the “Marshall County Mine,” formerly known as Shoemaker and McElroy, respectively. Murray recently acquired the latter two mines as part of a $3.5 billion deal with Consol Energy.

“There is no doubt that the decreased utilization of coal will increase electricity rates for everyone, including our citizens on fixed incomes and our manufacturers of products that compete in the global marketplace,” Murray added.

As more shale natural gas floods the marketplace, Xander believes prices should remain relatively low. He said adapting some coal-fired power plants to generate some of their wattage from natural gas could help the plants meet the more stringent federal emissions standards set to be imposed on them.

“Residential natural gas rates have dropped about 40 percent in the last three years. But if they take coal out of the supply mix for electricity, the cost per kilowatt hour will definitely climb. Seems silly,” Xander said. “Given our abundance of inexpensive coal that can be burned with acceptable levels of emissions, we are foolish to simply abandon coal.”

John Deskins, director of the Bureau of Business and Economic Research at West Virginia University, said any further decline in coal usage will harm the state’s economy.

“The two industries differ in terms of wages, in terms of how income is generated for those who own mineral rights, in terms of how much labor is used relative to equipment, machinery, and other capital, and along many other dimensions,” Deskins said of coal mining and gas drilling. “We have a potential movement in economic activity across regions of the state with this evolution.”