Energy crisis causes US coal use to rise under Biden

Coal

The US is ramping up its use of coal for electricity generation as high global gas prices deal a blow to Joe Biden’s ambitions to eliminate carbon emissions from the US power grid.

According to Bloomberg’s analysis of official data, the country’s power plants will burn 23 percent more coal this year. Mr Biden pledges to clean up the energy sector.

It marks a sharp turnaround after utility coal consumption fell by more than a third under Donald Trump, despite his efforts to boost the use of the fuel by slashing environmental regulations.

AN global gas supply shortage is driving up natural gas prices around the world, making coal more attractive for electricity generation than gas.

Electricity demand has also grown faster than renewables, Abandon coal-fired power plants to catch up in Asia.

Rich Nolan, chief executive officer of the National Mining Association, the US mining group, said: “The markets have spoken.

“We’re seeing the essential nature of coal coming back.”

U.S. Energy Information Administration predicts that U.S. power plants will burn 536.9 million short tons of coal this year, compared to 436.5 million in 2020.

The Biden administration aims to decarbonise its energy sector by 2035 and has recommitted the US to the Paris Agreement on climate change after Mr Trump withdrew.

However, analysts have questioned the feasibility of the decarbonisation target given the time it takes to develop technologies such as hydrogen, carbon capture and more electricity infrastructure.

Increasing coal use threatens years of progress in replacing coal-fired power with relatively cleaner natural gas.

In Europe, coal crossed over to become more attractive than gas for power plants around July, according to a Reuters analysis, as rising natural gas prices outpaced increases in coal and carbon prices.

Analysts at Bank of America said: “While European coal production was captivated by record carbon prices in the early parts of the summer, rising gas prices have now unlocked the gas-to-coal shift lever.”

In China, officials have ordered domestic miners to ramp up coal production to try to avoid power cuts after factories were forced to close due to power shortages.

Coal reliance comes as world leaders will gather in Glasgow in early November to try and make firmer commitments to tackle climate change, at the UN Cop26 conference.

China has said it will stop financing coal-fired power plants abroad, likely to affect about $50 billion worth of projects. However, it does not plan to reduce its own coal consumption until 2026.