North Dakota has a lot of lignite, a soft brown coal that is abundant in the state. It burns this to generate electricity and sells any excess to Canada and neighboring states.
The Clean Power Plan was created by former President Barack Obama in 2015. It was intended to reduce the use of coal-fired electricity. State officials considered it a serious threat.
Paul Seby, Special Assistant Attorney General, stated that the Clean Power Plan forced conversion from coal-based generation. It would have severely affected North Dakota.
North Dakota, along with over two dozen other states, sued to prevent the plan from going into effect in 2016.
However, coal power generation has declined over the years, reaching a low of 42 years in 2019, according to U.S Energy Information Administration.
The conservative majority of the U.S. Supreme Court ruled that the EPA could not issue a new regulation as broad as Clean Power Plan in West Virginia v. EPA. Analysts believe that this ruling will not reverse the downward trend in coal power.
According to Natalie Biggs (global head of thermal coal markets at Wood Mackenzie), this is because government intervention was not the primary driver.
She stated that the development of fracking technology and the very low cost of natural gas production in the U.S. played an even greater role in the decline in coal generation than environmental policies.
While coal was being challenged in court, the U.S. witnessed a glut in natural gas.
According to the National Bureau of Economic Research, although coal power capacity reached its peak in 2011, nearly a third of the U.S.’s coal fleet was shut down over the next decade.
Federal data shows that hundreds of people have switched to natural gas from those who still haven’t closed their doors.
According to NBER researchers coal now provides less than 25% of the country’s electricity.
The emission of carbon dioxide from natural gas is also much lower than that produced by burning it, so the U.S. met the carbon emissions targets in the Clean Power Plan regardless, years ahead of schedule according to the Environmental Integrity Project.
“The bottom line, is that so many companies have made it clear that they are moving away from coal because of a lot different reasons, most importantly economic reasons,” Taylor Kuykendall, who works for S&P Global Commodity Insights and covers the metals and mining sector.
He said that although not the primary driver of the decline in coal production, government policy has helped to stabilize it and deter new plant constructions. It is more costly to build coal plants because of the pollution standards for mercury, coal ash, and other pollutants.
Kuykendall said that any new plan has “a target on it’s back” in addition to this. He said, “You will be under pressure to build it or have it shut down.” Google and other major corporations have their own clean energy goals. This adds to the drive to reduce dependence on fossil fuels.
Biggs stated that natural gas prices have risen in the past couple of years, which has pushed up coal use again. But, Biggs believes this is unlikely to continue.
She said that “Eventually, the gas markets will adjust” and that coal will continue to be under the same competition pressure.
New competitors will increase the pressure as renewable energy prices drop.
Seven years after the Clean Power Plan was widely discussed, the nation’s highest court ruled in favor of its critics. Many of those who fought the case describe their victory as one against executive excess, not a win in favor of coal.
“If Congress had intended for EPA to transform an entire section of our economy, Congress might have done so explicitly,” stated Republican West Virginia Senator Shelley Capito in a statement regarding the decision.
Seby stated that the court acknowledged the cooperative federalism aspect to how [the Clean Air Act] had been written.
North Dakota still produces more than half its electricity from coal but some plants are closing down. Seby also points out that wind power is a significant player, thanks to the steady winds crossing the Great Plains.
