Energy industry: Why coal is on the decline in Texas

Energy industry: Why coal is on the decline in Texas

While President Trump has made a great show of rescinding Obama-era restrictions on coal, much to the relief of miners, a study cited by the Environmental Defense Fund suggests that market forces are ending coal as a source of energy where government fiat has failed. The study was conducted by the Brattle Group on behalf of the Electric Reliability Council of Texas focused on the Lone Star State’s electricity market. The study made some interesting conclusions.

First, cheap and relatively clean-burning natural gas is driving the demise of coal in Texas. The fracking boom has caused the United States to become awash in natural gas to such an extent that the country has started exporting the product. The percentage of coal-generated energy has declined from 45 percent in Texas in 2002 to about six percent currently.

Second, Texas has made quite a few investments in renewables, primarily wind, but solar is starting to attract the notice of Texas businesspeople and lawmakers. This development may seem counterintuitive, considering the image the Lone Star State has of being in thrall to oil and gas, but it is happening nevertheless.

Finally, the price of energy in Texas is not only going to stay about the same, adjusted for inflation but the energy itself will get steadily cleaner over the next two decades. This process is happening without government mandates and is solely being driven by business looking for new ways to deliver electricity to customers at the lowest price possible. Cleaner air and water will just be a happy side effect.