What is the Role for Coal in America's Future Energy Policy?

Statement

What is the Role for Coal in America's Future Energy Policy?

Simply put, coal is an abundant, affordable, reliable, and secure energy source. America now needs to make the investment in research and technology to make sure that coal never becomes a stranded asset.

America 's coal is vital to our nation's economic prosperity and security. Coal is a crucial part of America 's energy portfolio. It provides the foundation for a competitive economy, a secure future, and a prosperous information technology sector.

Wise use of natural resources, and coal in particular, drives America 's innovation and economic success. From the steam engines of yesteryear to cutting edge semiconductors - coal has powered the nation.

Our economy is becoming more and more reliant on technology. Therefore, the American people will depend more and more on affordable electricity. While energy efficiency and conservation continue to improve, energy demand continues to rise.

America 's economic competitors rely heavily on coal and exploit its many benefits. The Energy Information Administration (EIA) estimates world coal consumption will increase by 74 percent in the next 20 years. Coal's share of total world energy consumption is predicted to increase from 26 percent in 2004 to 28 percent in 2030.

Moreover, EIA projects that just two countries - India and China - will account for 72 percent of the increase. In order to sustain America 's current economic leadership, we must continue to harness the vast potential of coal.

All energy sources face challenges - reliability, security, economic competitiveness, ease of conversion, and environmental considerations. Complete substitutes to coal have often proven to be unsuitable, insufficient, or too costly to power America 's homes and businesses.

Coal provides an essential on-demand supply of electricity. Coal is largely exempt from concerns over import disruptions. Coal is a low cost energy source. That's why it's no surprise that coal fuels roughly half of the electricity used in America .

Coal has enormous potential to be converted into transport fuels. At a time when America faces record prices at the pump, coal should be used to produce gasoline, diesel, and jet fuel.

Wyoming is the nation's leader in coal production. Our state clearly has a vested interest in the future of coal. The residential, commercial, and industrial consumers in the United States have even more to gain from continuing coal's prominence.

Coal faces many challenges. Specifically, producers and consumers face an uncertain federal and state policy environment. What regulations will be imposed on coal? How quickly? At what expense? Will the technology be available to achieve the standards imposed?

This uncertainty is evident nationwide. Over the last year, the construction of approximately 50 coal-fired power plants were postponed or canceled altogether.

Blackouts across the Northeast in August of 2003 should have sounded a warning. California 's power disruptions in 2000 and 2001 should have sounded a warning. The energy price hikes following Katrina provided yet another stark warning for the future of America 's energy policy.

The source of these energy failures and crises were numerous and diverse. Several causes have been addressed. But, America has an aging energy infrastructure - from pipelines to transmission. Energy policies warrant a more comprehensive review and far-reaching solution. Coal can, and must, be an important contribution to that solution.

The public and policymakers have expressed a concern over climate change. Many are demanding government action. Even if policymakers choose to mandate a reduction in carbon dioxide, America cannot afford to close the door on coal.

Proven, commercially available, cost-effective technologies must be developed. These technologies must be efficient, effective, and allow America to continue to compete globally. Our competitors, India and China , are not constraining their economies with carbon limits.

America 's energy and economic security will depend on considering any climate change policies in a thoughtful, deliberative manner. Policymakers at all levels must be engaged. The debates cannot be dominated by emotion. The debate must rely on a careful examination of scientific, economic, and technological data. Right now, the uncertain policy direction is preventing investments from being made in coal-fired electrical generation regardless of the technology.

Since half of the electricity in our country comes from coal, coal will remain an important part of our foreseeable future. We just have to find a way to do it better. Strong partnerships will be required. Public-private partnerships will be necessary to finance first and even second-generation technologies. No single state, company or geographic set of ratepayers should be saddled with the costs.

While America can ultimately develop the technology to protect our environment, we must still get the rest of the world to use it. In countries with high rates of poverty, environmental protections are often neglected in favor of economic development. This is particularly important since China consumes more coal than the United States, Japan , and the European Union combined.

America 's energy and environment policies must not be created in haste. Policies should be based on realism rather than emotion. America cannot risk turning its back on one of our greatest natural resources - coal. America cannot abandon our nation's most abundant, affordable, and secure energy resource.

In the short-term, the world demand and supply for coal production is very positive. Today's major risk lies in the realm of policy for the intermediate and long-term. As we acknowledge global economic realities, invest in new technologies, and protect against unintended consequences, the future for both coal and the environment will remain bright.

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