Coal Gas Switching From Coal

Coal Gas

Switching from coal to gas has perceived environmental, economic, and political benefits. Because of this, the switch from coal to natural gas-generated power on the mainstream grids has increased significantly. As of 2008, natural gas is creating 30% of power in the United States, compared to 19% of the market in 2005. Part of the impetus for shifting from coal to natural gas is clearly price: the price of natural gas has decreased significantly over the course of the past several years. There are also political reasons for the shift from coal to natural gas. For example, the United States' refusal to participate in some of the Kyoto Protocol provisions, coupled with pressure from the European Union, have led to a gradual embrace of using natural gas over coal. This has in turn brought down the price of coal, in response to market demands. Prices have also been reduced in response to more advanced and accessible drilling technologies. Reduced carbon emissions are the primary driving factor in the shift from coal-generated power to natural gas-generated power.

Unfortunately, the switch is not a smooth transition. Natural gas prices are again rising. This is because of the phase of dismantling outmoded coal-generating energy plants, and the subsequent rise in demand for investments in natural gas-specific generating plants. Stricter environmental regulations are also driving up the cost of implementing a natural gas-centric power generation model. Renewable energy sources remain intermittent, and are only partially supplementing natural gas. The United States remains opposed to international solutions to the greenhouse gas emissions crisis, and clings to a privileged position in which American interests trump the interests of either global stability or even national security, let alone environmental harmony and ecological integrity.

Shifting from coal to natural gas leads to quantifiable reductions in greenhouse gas emissions. Emissions have dropped at a faster rate in the United States vs. Europe within the past several years precisely because of the shift from coal to natural gas, which has led to an initially dramatic decrease. The rate of decrease will shrink as coal power plants are shut down. However, the goals set by the Obama administration have already been reached, long before the 2020 goal. China remains the key player in reducing greenhouse gas emissions, as the United States has made measurable progress. This is in large part due to the dismantling or retrofitting of old coal-fired power plants, as they make the transition to renewable, gas, and mixed-use facilities. The shifts are becoming financially feasible, especially over the long haul. Short-term gains are remarkable, and long-term gains are set to be even more lucrative for the vertically integrated industries. The shift from coal to natural gas does not present any significant organizational challenges, as the basic market structure can remain the same. Vertical integration, and managerial style remain consistent. The SERC market (part of the North American Electric Reliability Corporation) highlights some of the core areas in which progress continues to be made.