The Clean Power Plan could dramatically alter coal production, particularly in the West
The Clean Power Plan, passed on June 2, 2014, is aimed at lowering carbon emissions by 30% by 2030 from power plants, many of them coal-fired. While it only accounts for 37% of all energy in the U.S., coal is responsible for 75% of carbon emissions, making it the primary target for emissions regulations. Those regulations will likely lower coal production throughout the United States, according to forecasts from the Energy Information Administration (EIA).
The EIA’s analysis of the impacts of the Clean Power Plan predicts that levels of coal production will fall to levels last seen in the late 1970’s, with coal production in the West being particularly hard-hit. In all cases, production recovers by 2040, but never reaches the same levels as the EIA forecasts without the Clean Power Plan.
Coal production in the West, primarily from Wyoming’s Powder River basin, is forecast to be 214 million tons (34%) lower by 2024 if the proposed Clean Power Plan takes effect, than in the EIA’s Annual Energy Outlook (AEO) for 2015, which the EIA uses as a reference case. Production increases heading towards 2040, closing the gap to 110 million tons (19% lower) between the reference case and forecasts after the Clean Power Plan takes effect.
For the Interior region, which includes coal from Illinois and Gulf-lignite basins, the Clean Power Plan could lower production by 103 million tons (45%) from the 2024 reference case. After 2024, production increases, reaching 211 million tons by 2040, but is still 88 million tons lower than the EIA predicts it would be without the proposed rule.
The Appalachian region saw the least change between the reference case and the Clean Power Plan forecast, but was still adversely affected by the plan’s implementation.
The EIA predicts that coal production from the Appalachian region would fall 46 million tons (19% lower) below its 2024 mark without the Clean Power Plan before recovering to about 200 million tons. The Appalachian region more closely follows the reference case from the AEO’15, which predicts a continuation of a downward trend in demand for the region’s coal.
Coal demand increases in all cases between 2024 and 2040 as demand for electricity increases, natural gas prices rise and increased renewable capacity translates to increased utilization at existing coal plants, says the EIA. The administration assumes that the standards in the Clean Power Plan will remain constant after 2030.