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• Oil and natural gas reserves are expected to last for another 50 years, coal reserves will last for another 200 years.
• Coal is less expensive than oil and natural gas.
• Coal is found throughout the world and is exported by many countries. With so many supply sources, no coal cartel exists and buyers have more room to negotiate prices.

As surprising as the statistic may be to observers of the climate debate in the US, the Post-Kyoto economies of Europe contemplate adding about 50 coal-fired plants over the next five years. Although the European Union operates a greenhouse emissions trading program which forces utilities to purchase permits to emit carbon dioxide, the price of oil and natural gas is so high that burning coal represents the cheapest mode of electricity production in Europe, even after accounting for the permit cost. Further, countries like Italy and Germany have banned and are phasing out nuclear power, departing sharply from the pro-nuclear path France has chosen. Facing a narrow range of options, Italy’s largest power producer, Enel, has focused on coal and will soon produce 50 percent of its power from coal. As a country, Italy will increase its reliance on coal from 14 to 33 percent over the next five years.

In India, Tata Power recently received 450 million dollars in funding from the International Finance Corporation to open a 4,000 MW coal fired power complex. Between India and China, the worlds largest producer and user of coal, a new coal-fired plant opens almost every week.

Of course, the growth in coal as an energy source has major ramifications for climate change. Even under optimal conditions, coal emits more than twice as much carbon dioxide per unit of electricity produced as natural gas, according to the Electric Power Research Institute. While “clean coal” plants can reduce particulate matter, sulfur dioxide, and nitrous oxide emissions, clean-coal technology has a minimal impact on carbon emissions. Further, carbon capture and sequestration are not currently commercially available and, even if they become available relatively soon, many power plants cannot be retrofitted for sequestration without major renovation. With a growing global population and a growing global middle class demanding more energy, and over two billion people lacking access to viable energy sources, the world’s hunger for energy will not subside anytime soon. Coal, as a relatively inexpensive and readily available energy source, will play a major, and likely growing, role in supplying the world’s energy needs.

In the United States, coal could be facing a less certain and stable future as investors, legislators, and the public have taken a keen interest in climate change and carbon dioxide emissions. According to Global Energy Decisions, an energy information supplier, natural-gas and renewable power projects have leapt ahead of coal in the development pipeline. Gas and renewables each show more than 70,000 megawatts under development compared with about 66,000 megawatts in the coal-power pipeline. In 2007, utilities scrapped plans for 59 coal power plants. The investment banks Citigroup, J.P. Morgan, and Morgan Stanley also recently announced that their financing for new plants would be contingent on the utilities’ plans to control greenhouse gas emissions. In Congress, Senate Majority Leader Harry Reid recently said that “there’s no such thing as clean coal,” and House Oversight Committee Chairman Henry Waxman recently called for a ban on new coal-fired power plants unless they come up with a way to control their carbon dioxide emissions.

The three presidential candidates seem committed to cap-and-trade for all greenhouse emissions when discussing climate change policy. Further, a report released by Synapse Energy Economics, Inc. stated that utilities that plan their futures around new coal-fired power plants will face “risks and uncertainties” comparable to those that derailed the US nuclear power industry in the 1970s. The risks associated with nuclear power led to fierce legal opposition to new plant construction, resulting in delays and cost overruns and causing investors to pull out of nuclear investments. The Synapse report concludes that “coal is losing its appeal as a predictable investment and is instead fraught with uncertainty.”

The United States is not immune to the input price pressures which are causing energy companies in other countries to turn to coal. Such pressures are amplified by a desire for energy independence from Middle Eastern energy sources, residual opposition to nuclear energy, and vastly underdeveloped renewable energy sources. Today, 22 new coal-fired power plants are under construction and more are on their way as companies rush to get them operating before carbon-emissions standards are enacted. But, energy must come from somewhere, so unless consumers are willing to pay substantial premiums for energy, coal should remain a major energy source in the United States for the foreseeable future.