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InsightJim A. Roth

Roth: Global decline of coal

By June 13th, 2022No Comments

By Jim Roth, Director and Chair of the Firm’s Clean Energy Practice Group. This column was originally published in The Journal Record on June 19, 2017.

Jim Roth is a Director and Chair of the firm’s Clean Energy Practice.

Global decline of coal

The global consumption numbers are in for 2016 and coal production and consumption hit a 35-year low in the United States and had an even deeper slide around the world.

After peaking in the U.S. in 2007, consumption of this traditional fossil fuel has slid by nearly one-third since. And the decline seems to be picking up speed. The first quarter of 2016 saw the lowest quarterly production since 1981, with the steepest quarter-over-quarter drop in nearly 30 years.

Many of America’s utilities have been moving away from coal in power generation. In 2008, about one-half of our electricity was coal-powered. Today’s its about 30 percent due in large part to cheaper, abundant, clean natural gas and the greater deployment of cheap and clean renewable energy sources.

The U.S. Department of Energy recently estimated an annual coal export decline of 12 percent in 2017, as the decline now appears global as well. Worldwide consumption dropped for the second consecutive year, by 1.6 percent last year, to its 2004 levels, as electricity remained flat and coal continued to be displaced by cleaner fuels. Even China, the largest coal consumer in the world, finished 2016 with a drop in its coal use for the third year in row. And since China has the distinction of being the world’s largest polluter today, compared with our country as the largest polluter over history, China is aggressively moving away from coal to other technologies like wind and solar.

And America is helping to lead that trend too. Just this past week Bloomberg’s New Energy Finance Outlook estimated that solar technologies will rival the cost of new coal plants in America and Germany by 2021. It also estimated that solar will soon be cost-competitive in quick-growing markets like India and China. This scenario is called “China’s tipping point” and suggests that once that happens, coal’s days will only further dwindle. And the reality is that once China has forever lessened its coal appetite, the demand curve for coal will likely never recover here or abroad.

Let’s hope we too have migrated toward cleaner energy options that are abundant in Oklahoma and America like natural gas, wind and soon solar.

Jim Roth, a former Oklahoma corporation commissioner, is an attorney with Phillips Murrah P.C. in Oklahoma City, where his practice focuses on clean, green energy for Oklahoma.