HOUSTON—Environmental Protection Agency (EPA) Administrator Lee Zeldin’s March 12 announcement that he will “reconsider” power plant regulations adopted under the Biden administration is welcome news to the nation’s $28 billion coal-producing industry, mine operators said March 13 at CERAWeek by S&P Global.
“Coal is not going away,” Alliance Resource Partners Senior Vice President for Sales and Marketing Timothy Whelan said. “I feel a lot better sitting here today than I did 12 months ago.”
Coal may not be going away, Robindale Energy President Bud Kroh said, but even with less restrictive emissions rules, the United States “won’t see more coal plants open” in coming years.
The “upside,” he said, is “I think every existing coal plant is going to stay open for the foreseeable future.”
The rule requires fossil fuel-powered electricity plants to “capture 90 percent of carbon emissions” or shut down by 2032.
Of those remaining, 118 are at least 40 years old.
The rule was seen as a dagger into the heart of the nation’s coal industry, already in decline for more than two decades.
The EIA documents that, of 4.18 trillion kilowatts (KW) of electricity generated by U.S. utility-scale power plants in 2023, natural gas produced 43 percent, nuclear 18.6 percent, wind 10.2 percent, hydropower 5.6 percent, and solar 4 percent.
Renewable non-nuclear generation eclipsed coal in 2022, a trend EIA projects will continue.
But coal’s projected demise as an electricity generator may be premature as the nation grapples with an emergent need to dramatically, quickly expand electric capacity.
The North American Electric Reliability Corp. in 2023 nearly tripled its nine-year electricity demand forecast from its 2022 projection, from 200 to 550 gigawatts (GW) of growth, largely fueled by data centers, bitcoin “mines,” and supercomputers.
Closing coal-fired power plants while utilities and Regional Transmission Operators (RTOs) scramble to build out the grid was among Republican criticisms of Biden administration policies during the 2024 election.
President Donald Trump in his campaign vowed to “unleash American energy” by repealing Biden’s orders, regulations, and rules he said were shackling oil, gas, and coal development, raising electricity costs, and bottlenecking grid expansion just as demand is set to spike.
Interior Secretary Doug Burgum suggested on March 10, while meeting with some of the 450 CEOs among CERAWeek’s 8,000 attendees, that coal-fired plants closed because of Biden-era emissions rules could be allowed to reopen under Trump’s energy emergency declaration.
‘Horribly Needed’ Now
Federal Energy Regulatory Commission (FERC) Chair Mark Christie in a March 13 CERA discussion said with “a lot of [coal-fired plants] retiring, we’re losing generation. That is unsustainable.”Christie, however, said coal is not the answer to meeting projected demand.
Natural gas—a CERA theme is the world is entering the “golden age of natural gas”—and nuclear power are the long-term solutions, he said.
Combined cycle gas turbines, which use both gas and steam, will further entrench natural gas as the go-to energy source, he said, and while nuclear power remains “extraordinarily expensive,” that could change with advances in small modular reactors and other breakthroughs on the horizon.
But combined cycle turbines and nuclear power are years away from being commercially available, Christie conceded, an admission Whelan, Kroh, and S&P Global Coal Energy Executive Director Jim Thompson said makes coal an attractive option in delivering the base load electricity needed in the next five or more years.
Coal is “horribly needed to support growth,” Whelan said. “It’s base load. It’s dispatchable.”
Oklahoma-based Alliance Resource Partners is the East Coast’s second-largest coal producer with seven underground mines in Illinois and Pennsylvania that extracted 32.2 million tons in 2024. More than 80 percent was purchased by electric utilities.
“Combined cycle turbines are going to take four or five years” before they’re widely available, Whelan said.
The EPA announcement provides certainty lacking under the Biden administration, he said. “Utilities will make investments if they know what to expect.”
Kroh’s Latrobe, Pennsylvania-based Robindale Energy began as a waste coal reclamation company and now operates three mines.
He said despite the need for more power, PJM—the nation’s largest RTO spanning 13 states—is closing two coal-fired plants in Pennsylvania this year.
Utilities are already facing a “big challenge just to keep the lights on. With further retirements, there is going to be a struggle having generation built in a market growing for the first time in 15 years,” he said.
“I don’t see how PJM is going to survive.”
PJM President and CEO Manu Asthana told The Epoch Times on March 12 at CERAWeek that he had “not read through” the EPA announcement so he could not comment.
Renewed Interest
Even before the 2024 election, and despite the greenhouse gas rule, projections of rapidly increasing demand were prompting some utilities to reconsider plans to shutter coal plants.“It wasn’t just like a light turned on with a new administration,” Whelan said, noting utilities and markets were already recognizing “we’d gone so far one way” into renewables, “we’ve got to balance ourselves, just to support the grid.”
During a Feb. 26 discussion at the National Association of Regional Utility Commissions’ Winter Energy Policy Conference in Washington, America’s Power President and CEO Michelle Bloodworth said adding “upwards of 130,000 megawatts (MW) in five years” to the grid is “an unbelievable task” even if no coal-fired plants were closing.
Since 2022, she said, utilities in 19 states have delayed planned retirements of about 50 coal-fired plants generating about 30,000 MW because of “clogged interconnection queues” and rising electricity demand.
“They just cannot get replacement capacity with the same attributes, the same capacity value, that those coal units provide,” Bloodworth said.
Nevertheless, she added, there are still 60,000 MW of “announced coal retirements” in the next five years.
Whelan and Kroh said their coal mining operations had also seen renewed interest in the past 18 months or so despite the greenhouse gas rule and other regulations.
In the past 12 months, Whelan said, Alliance Resource Partners secured $400 million in financing for capital improvements.
Before that, it had been difficult to get lenders “to participate in the thermal coal space,” he said.
“That’s critical. If your industry doesn’t have access to capital, coal goes away. So, it’s encouraging” that banks “are willing to make a commitment.”
Kroh said, “Multiple banks have come back to our syndicate” and insurers are getting easier to find.
“In 2017, there were 17 bids on policies for our properties. Three years ago, it was down to three,” he said. “Within the past year, we’ve seen insurance companies come back into the fold.”
With these reaffirmations of stability, and a new administration geared to galvanize energy generation, “One of the changes from last year is utilities are now making commitments,” Whelan said.
“We just secured a contract through 2031. Five years ago, utilities were reluctant to make commitments [for coal]. It certainly has improved,” he said.
Even prospective data center developers are sniffing around coal producers, despite many espousing outspoken preference for nuclear and other carbon-free power, Whelan said.
Alliance Resource Partners has been “approached” by a data center developer, he said, calling it “a very preliminary discussion—we are not their chosen commodity.”
But the company does have a commodity suitable for co-location, “idle properties” already outfitted with “transmission,” Whelan said.
Kroh said Robindale Energy has also been contacted by data center and bitcoin developers, but moving forward with big load contracts is difficult because there is “uncertainty about interconnection rules” between regional RTOs—among issues that must be resolved to expand the grid regardless of source generation.
Many Challenges
Increasing, even sustaining, coal production and use in electricity generation faces many challenges, they said.Whelan said many coal-fired plants need renovation because utilities haven’t been investing in modernizing them.
S&P Global’s Thompson said railroads have “taken down” much of the infrastructure needed to ship coal.
Kroh said the “whole fleet of rail cars, barges are aging out,” although he, like Whelan, is confident “if demand materializes, it will be fixed. If not, those challenges will remain.”
While the coal mine operators appreciate Trump’s executive actions and his administration’s agency initiatives to trim regulations and permitting times, Congressional action would be the better path to foster the certainty the industry needs.
Surety is “still hard to do when every four years a new administration comes in” and can reverse much of what the preceding administration did in a blur of executive actions, Whelan said.
“I’m cynical of the political process,” Kroh said, noting the reversals and upheavals seem to ignore the reality that power generation is “a pretty serious thing. Lives are on the line.”
Nevertheless, he added, “things are significantly better” now than they were a few years ago.
“We have been operating under the misery index,” Thompson said, asking, “Are we now on the enthusiasm index?”
“Definitely,” Whelan said.
