From The Ashes Of Some Coal Plants, New Energy Rises

Feb 17, 2016
Originally published on June 15, 2016 2:51 pm

The coal industry is hurting. For decades, coal was the go-to fuel for generating electricity. Now that is changing.

The connection between coal and generating electricity goes back to the late 19th century. A good place to get a sense of that history is the small town of Sunbury, Pa. — specifically at the corner of Fourth and Market streets at the Hotel Edison.

"This is the place where, on July 4, 1883, Thomas Alva Edison lit the hotel with the first commercial three-wire electric system," says hotel co-owner Meghan Beck.

The famous inventor chose Sunbury to demonstrate his lighting system because the existing gas lamps in town were expensive to operate. There was plenty of cheap coal nearby, and Edison used it to power his generators.

This part of central Pennsylvania has long been coal country. "It was a huge part of our economy in this area," Beck says. "We actually have a power plant just across the river that was coal-fired up until a year ago."

That plant and its huge smokestacks can be seen for miles. It's a local landmark that delivered electricity to this region for more than six decades. But now things are about to come full circle, and the lights in Beck's hotel may once again be powered by gas.

Right next to the old coal plant, a brand new natural gas power plant is under construction and scheduled to be completed by the end of 2017. Companies building the plant say it will be more efficient than the old coal plant.

While a coal plant pretty much has to run all the time, a gas plant can be shut down and fired back up more easily to meet regional electricity demands, according to Dave Meehan, head of Sunbury Generation, which owns the site where the new plant is being built.

It's easier on the environment, too. There's no coal ash to deal with, it uses less than 5 percent of the water for cooling than the coal plant used, and it emits less pollution. Here's the real kicker: The new gas plant will produce more than twice as much electricity as the old coal plant — enough to power about a million homes.

"Gas is taking more and more market share from coal, and that's a reality that is here to stay," Meehan says.

U.S. coal production peaked in 2008, according to the Energy Information Administration. It's been trending down since. Last year, it fell 10 percent, and that's hurt companies and the communities where they operate.

"Right now I think we're simply in a survival mode," says Luke Popovich, vice president for external communications at the National Mining Association.

In part he blames environmental regulations over the decades. But the coal industry's problems go beyond that. Despite falling demand here in the U.S., the industry thought global demand would continue to rise. Popovich says coal companies borrowed a lot of money to prepare for that new business, but it never came.

"Now they're faced with paying off those debts at the same time that prices for all fossil fuels — not just coal but natural gas and oil — have virtually collapsed," Popovich says.

Coal's problems don't stop there. The renewable energy building boom also is stressing the industry. Once solar and wind projects are built, the power is cheap to produce.

"Gas puts the immediate threat to coal, but the combination of gas and renewables places a longer-term threat to coal," says Andy Roberts, analyst in international thermal coal markets for the consulting firm Wood Mackenzie.

He says last year was tough for coal companies, and the future likely will be even more painful.

"Probably, over the long, long time, only the strongest of them are going to survive," Roberts says.

One way to stay strong is to declare bankruptcy. That's the route Arch Coal is taking. It's the second-largest coal company in the U.S., and it filed in January. The company says it expects to shed more than $4.5 billion in debt. Executives hope that will position Arch to be one of the few companies that will survive the tough years ahead.

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And America's coal industry is hurting. In just the last few years, more than three dozen companies have declared bankruptcy. That's a big turnaround from where coal used to be. For decades, it was the go-to fuel for generating electricity. NPR's Jeff Brady reports.

JEFF BRADY, BYLINE: The connection between coal and generating electricity goes way back to the late 1800s. A good place to get a sense of that history is in the small town of Sunbury, Pa., specifically at the corner of Fourth and Market. That's where I met hotel owner Meghan Beck.

MEGHAN BECK: And this is the place where, in July 4, 1883, Thomas Alva Edison lit the hotel with the first commercial three-wire electric system.

BRADY: The famous inventor chose Sunbury for his lighting system because the existing gas lamps in town were expensive to operate. There was plenty of cheap coal nearby, and Edison used that to power his generators. Standing in one of the hotel's long hallways, Beck says this part of central Pennsylvania has long been coal country.

BECK: You know, it was a huge part of our economy in this area. We actually have a power plant just across the river that was coal-fired up until a year ago.

BRADY: That plant and its huge smokestacks that can be seen for miles is a local landmark. It delivered electricity to this region for more than six decades. But now things are about to come full circle, and the lights in Beck's hotel may once again be powered by gas. Right next to that old coal plant, crews are building a brand new natural gas power plant. The operators want it built by the end of next year, which means crews keep working even when it's raining and cold outside.

DAVE MEEHAN: We have an old saying that the heat's in the tools. And these guys are very professional, and they come prepared to work in any kind of weather.

BRADY: That's Dave Meehan, president of Sunbury Generation. The crews are laying the foundation. When it's done, it'll take up a lot less space than the coal plant it replaced. And it'll be more efficient in a number of ways.

MEEHAN: With coal, you're just feeding the monster all the time. You're filling the bunkers up with coal and running them out and generating steam, so you're kind of forced to have a long-term view that you're going to burn all the time.

BRADY: A natural gas plant is more nimble. It can shut down and fire back up more easily to meet the region's fickle power demands. It's easier on the environment, too. There's no coal ash to deal with. It uses a lot less water from the nearby Susquehanna River, and it emits less pollution. And here's the kicker. Meehan says the gas plant will produce more than twice as much electricity as the old coal plant, enough to power a million homes.

MEEHAN: Gas has taken more and more market share from coal, and that's a reality that is here to stay, so positive for gas, negative for coal.

BRADY: U.S. coal production peaked in 2008, according to the Energy Information Administration. It's been on a downhill slide since. Just last year, it fell 10 percent. That's hurt companies and the communities where they operate.

LUKE POPOVICH: Right now I think we are simply in a survival mode.

BRADY: Luke Popovich is spokesman for the National Mining Association. In part he blames environmental regulations over the decades. But the coal industry's problems go beyond that. Despite falling demand here in the U.S., the industry thought global demand would continue to rise. Popovich says coal companies borrowed a lot of money to prepare for that new business, but that business never came.

POPOVICH: Now they are faced with paying off those debts at the same time that prices for all fossil fuels, not just coal but natural gas and oil, have virtually collapsed.

BRADY: Coal's problems don't stop there. The renewable energy building boom also is competing with coal. Once solar and wind projects are built, the power is cheap to produce. Coal analyst Andy Roberts is with the consulting firm Wood Mackenzie.

ANDY ROBERTS: Gas puts the immediate threat to coal, but the combination of gas and renewables places a longer-term threat to cold.

BRADY: Roberts says last year was tough for coal companies, and the future likely will be even more painful.

ROBERTS: Probably, over the long, long time, only the strongest of them are going to survive.

BRADY: One way to become strong is to declare bankruptcy. Arch Coal is going that route. The company filed bankruptcy in January and plans to shed more than $4.5 billion in debt. Executives hope that will position Arch Coal to be one of the few companies that will survive the tough years ahead. Jeff Brady, NPR News. Transcript provided by NPR, Copyright NPR.