The US coal industry is predicting strong growth under the new Republican administration, according to a Financial Times report. The government’s national energy plan aims to boost electricity production in the USA by investing in clean coal technology and setting up a fast-track authorisation procedure for coal-fired power plants and new mines.
Coal prices in the USA have just started to rise after reaching a 15 year low. This has given companies such as Peabody Energy, the largest coal producer, reasons for optimism about the future. However coal faces strong competition in the electricity sector from natural gas and may also have to compete with nuclear power if the second strand of the administration’s new energy policy, boosting the nuclear industry, finds favour.
The government hopes to invest $2 billion in clean coal technology over a period of ten years. While coal produces more than half the nation’s electricity it is still seen as a dirty source of power, generating 63 per cent of US sulphur dioxide emissions and 19 per cent of nitrogen oxide emissions as well as being a major source of carbon dioxide.
There are already plans for the construction of 35 new coal-fired power stations with an aggregate capacity of 12 500 MW over the next seven years. However industry optimism may be misplaced if coal cannot compete environmentally with other sources.
