CHARLESTON, W.Va. -- Coal-fired power plants around the country may face much greater financial risks than previously projected from a combination of low natural gas prices and stronger air quality rules, according to a new Duke University study.
The economic viability of as many as two-thirds of the nation's existing coal plants could be threatened in the years ahead, according to Duke researchers who examined operating costs for hundreds of coal- and gas-fired plants nationwide.
"This is a much higher fraction of economic vulnerability than has previously been reported," said Duke geologist and energy expert Lincoln Pratson, the lead author of the paper, published late last week in the journal Environmental Science and Technology.
The paper is apparently the first peer-reviewed study to look closely at issues that caused great controversy in coalfield communities and fueled an ultimately unsuccessful coal industry campaign to defeat President Obama's re-election bid last year.
But the researchers take no clear side on the issue of whether ongoing coal industry woes should be blamed strictly on the U.S. Environmental Protection Agency or are mostly caused by a wave of low-priced natural gas production. Instead, they say that both play a role, and the two factors interact in complex ways.
"Our hope is that this analysis helps people identify what the potential economic mix would be for coal and natural gas for different price ratios," Pratson said in an interview Tuesday. "We hope that the study provides people on both sides of the debate with more information."
Jeremy Richardson, a Union of Concerned Scientists analyst who is studying Appalachian coal trends, noted that the Duke paper was not an examination of the broad variety of factors affecting the regional industry, including the mining out of the highest quality reserves and competition from other coal basins.
"The way I look at it is that coal faces a sort of 'death from a thousand cuts'," Richardson said. "It's not just one or two factors."
Already, the boom in shale-gas production has been reshaping the nation's energy supply, prompting significant shifts among utilities from coal to natural gas. Previous reports -- by government agencies and industry analysts, but not in peer-reviewed journals -- have blamed natural gas at least in part for the announced closures of 8.5 percent of the nation's fleet of coal-fired power plants. Those reports also projected that figure could double if natural gas prices remain low.
The new Duke study reached similar conclusions about current pressures on existing plants.
Pratson and his team assessed the cost of electricity generation at 304 coal plants and 358 natural gas plants. They estimated costs for both types of plants over a wide range of fuel prices and under both existing and pending emissions standards, and developed a ratio to express the cost differences between natural gas and coal.
Authors found that that at current fuel prices, 9 percent of U.S. coal-fired plants are more costly to run than a median-priced natural gas plant. But, they found, even a modest jump in gas prices -- from the current natural gas-to-coal price ratio of 1.5 to 1.8 -- could erase coal's current disadvantage.
The analysis "partially supports the findings of previous economic modeling studies that low natural gas prices could indeed be driving a significant fraction of coal plants to close," the study says. However, it also shows that "the relative competitiveness of coal vs. natural gas is highly sensitive" and that moderate changes in either prices for either fuel could result in "a majority of coal plants once again becomes significantly cheaper than the lowest cost natural gas plant."