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Gas topples coal as king of power

By: Brian Nearing |

Among numerous economic casualties since the start of the Great Recession, count the burning of coal to generate the state’s electrical power.

In New York, as in many other parts of the nation, it is becoming much less likely that energy to turn on lights, boot up computers or run air conditioners came from a coal-fired power plant.

As recently as 2007, the year before the national economy tanked, coal produced 15 percent of the electricity generated in New York. Since then, coal plants have closed or gone bankrupt, and that figure has plummeted by a bit more than 3 percent, showing few signs of slowing.

The culprit?

Cheap natural gas supplied by a boom in the hydraulic fracturing, or hydrofracking, drilling technique.

Although fracking in New York has been delayed by a four-year study over environmental and health issues, the state is benefiting from shale gas drilling in Pennsylvania, Texas and other states that has driven natural gas prices to historic lows.

In New York, natural gas surpassed nuclear as the single-largest sources of the state’s electricity in 2009, and has been widening its lead every year since then, as coal slipped away.

In addition to being cheaper, natural gas has other advantages over coal: It produces fewer emissions of toxic chemicals and gases that contribute to climate change, key attributes as tougher federal environmental rules go into effect.

The price of coal has been climbing, as industrializing countries like China and India increase demand for imported fuel, putting coal at an even greater economic disadvantage to natural gas. From 2004 to 2011, the average delivered cost of coal to the state’s power plants jumped from $42.26 a ton to $71.11, according to the U.S. Energy Information Administration.

All these things are combining to squeeze out coal from the state’s electricity mix, said Gavin Donohue, president and CEO of the Independent Power Producers of New York, which represents about 80 companies involved in generating electricity.

Further pressure on coal comes from new federal air pollution rules meant to reduce emissions.

Power plants that burn coal produce more than 90 times as much sulfur dioxide (the source of acid rain that has damaged parts of the Adirondacks), five times as much nitrogen oxide (a source of smog) and twice as much carbon dioxide (a greenhouse gas that is driving man-made climate change) as those that run on natural gas, according to the Government Accountability Office, the regulatory arm of Congress.

A pair of clean air rules enacted by the Environmental Protection Agency last year tightened limits on power-plant emissions of sulfur dioxide and nitrogen dioxide, and placed new limits on mercury, a poison found in coal.

Coal was hit with a potentially bigger environmental blow in March when EPA issued guidelines that could limit greenhouse gas emissions from new power plants as early as 2013. Once the guidelines go into effect, no coal plants will be built unless utilities can develop a cost-effective way to capture carbon dioxide, but that technology has been slow to develop and remains very expensive.

“It does not make sense for many plant owners to install this new equipment if it has to be run for decades in order to recoup the investment,” Donohue said.

Environmental groups that want stronger efforts to combat climate change and pollution welcome the reduced use of coal.

“This is a tremendous opportunity for the state to make major investments in energy efficiency and renewable energy,” said Kim Teplitzky, a spokeswoman for the Sierra Club’s Beyond Coal Campaign in the northeast mid-Atlantic states. “We can match the retirements of coal-generating capacity with more renewable energy.”

There are now just four coal-fired power plants in the state, three in the Buffalo region and the other near Ithaca in the Finger Lakes region. Last year, it was announced that the only coal plant near the Capital Region, the eight-decade-old Danskammer plant near Poughkeepsie, would be closed in 2013.

Also last year, owners of two of the remaining plants — in Dunkirk, Chautauqua County, and Cayuga, near Ithaca in Tompkins County — announced plans to mothball the units because they can’t compete.

AES Eastern, owners of the Cayuga plant, and another Somerset, Niagara County, went bankrupt in late 2011, and control of both plants passed to the company’s bondholders.

In January, the state Public Service Commission said closing the plants could leave the western part of the state short of power, and ordered the owners and utilities to study “repowering” the plants, that is, rebuilding them to run on natural gas, rather than coal. The panel is had not made a decision.

Repowering the Dunkirk plant has drawn support from some of the Lake Erie region’s politicians and labor unions.

Built during the 1980s, Somerset is the newest coal plant in the state, while the other plants all date to the 1950s and 1960s.

The problem how to handle aging coal plants is only expected to worsen in the U.S. Economic and environmental factors are expected to fuel more coal plant closures in coming years, according to a report last year by the U.S. Energy Information Administration, a part of the U.S. Department of Energy.

By the end of the decade, coal plants totaling about 49 gigawatts — about a sixth of the total coal-fired generation — are expected to close. Most are older, inefficient plants located in mid-Atlantic and southeastern states, as well as the Ohio River Valley, where prevailing winds carry pollution, including acid rain, eastward to New York.

But the fossil fuel industry is engaged in some internal backbiting on the issue.

In New York, the Empire State Petroleum Association is warning that natural gas isn’t a “clean” energy source. In a filing with the PSC, the association wrote that natural gas leaks are extremely dangerous for the environment and that methane, the main component of natural gas, is 20 times more powerful than carbon dioxide as a greenhouse gas.