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Oil Prices Subdued, But For How Long?

Oil Prices Subdued, But For How Long?

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James Burgess

James Burgess

James Burgess studied Business Management at the University of Nottingham. He has worked in property development, chartered surveying, marketing, law, and accounts. He has also…

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Coal Industry Cites Polar Vortex as Case for Keeping Old Plants

The icy cold winter in the eastern half of the United States demonstrates the need for stable baseload power, according to executives from the coal industry. The snowstorms and record low temperatures pushed the grid to the brink, leading to price spikes and the occasional blackout. With such high price volatility, coal companies want old power plants that were destined for retirement to have their lives extended.

Environmental regulations have led to the shuttering of dozens of old coal-fired power plants, with many more closing down in the next two years. That has led to an increased reliance on natural gas. The winter of 2014, however, led to extraordinarily high prices for electricity, especially in the New England area. That was due to a dearth of pipeline capacity to carry natural gas from gas-rich areas like the Marcellus, to markets in major East Coast cities. The situation showcased the advantages of coal, according to its supporters, which provides low-cost and stable electricity.

Related Article: What Would U.S. Energy Exports do to Prices at Home?

Not only that, but the trend towards using more natural gas has left regional electricity grids over reliant on one source of energy. Maintaining coal-fired power plants would give the grid diversity.

“I’ve been advocating fuel diversity so you don’t get overly dependent on any one particular fuel source,” said Thomas Kuhn, President of the Edison Electric Institute, during a Feb. 11 interview at Bloomberg News.

And it’s not just coal, but nuclear power as well. Former EPA administrator Christine Todd Whitman cited the fact that all but three of the nation’s 100 nuclear power plants operated at 90% efficiency during the Polar Vortex.

The industry is calling for both delaying or scrapping EPA greenhouse gas regulations, as well as incentives to keep baseload sources of power online.

By James Burgess of Oilprice.com


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