If you turn on your television set, you’re bound to see a politician saying that he or she should be elected because he or she will remove obstacles in the way of “responsible” energy development. He or she will “cut the red tape.” And that will fix everything. If only it was that sample.
True, bureaucratic rules and ongoing lawsuits hinder some energy sectors while subsidies help others. Those variables affect jobs and prices to some extent. And lately, we’ve been hearing a lot from critics and supporters of the Otter Creek coal tracts.
Protesters earlier this month staged a weeklong demonstration at the state Capitol in Helena, arguing that the massive coal development would harm the environment. Some of those same detractors filed a lawsuit challenging the lease of southeastern Montana land to St. Louis-based Arch Coal Inc. for $86 million in 2010. A judge rejected it.
And members of the Montana Land Board, made up of the five top officeholders in the state, including Gov. Brian Schweitzer, who approved the deal in a 3-2 vote, have no intention of reversing their decision.
“Is what they are asking me, is to give Arch Coal their $86 million back?” Schweitzer told the Associated Press. “That’s not going to happen.”
Opinions on the merits of coal mining, the jobs it supports and the effect it has on the environment were nonetheless debated on editorial pages. But what has been mostly ignored is the long-term feasibility of a coal-mining operation of this size.
It’s no secret that demand for coal has been falling and it has little to do with its environmental impact and a lot to do with the availability and affordability of natural gas.
In the latest issue of Wired magazine, Peter Schwartz writes about the “explosion in natural gas production, which has led to a 70 percent fall in gas prices since 2008 and a near collapse of the natural gas import business.”
Natural gas may challenge coal as the dominant domestic fuel for producing energy. There is so much natural gas extracted alongside oil from the Bakken shale in North Dakota that much of it is flared off because there aren’t pipelines and processing plants in place to capture it. In fact, in 2011, 30 percent of the natural gas extracted in that state was wasted, according to the New York Times. How can coal compete with that?
In its report on the impact of the Otter Creek development, the University of Montana Bureau of Business and Economic Research argues that decreasing demand for coal in this country will be made up for by increasing demand in Asia. But right now there is not sufficient infrastructure to transfer it to that market. More bulk loading facilities need to be approved and built in places like liberal Oregon and Washington state.
Natural gas is also affecting the clean energy industry and could kill its momentum if government tax credits lapse. As Schwartz writes, “gas is already winning: Coal is being pushed out, nuclear has stalled, and wind and solar projects are being canceled.”
Already, freight companies are working to retrofit their vehicles to run on liquefied natural gas and, for better or worse, carmakers’ urgency to build more efficient vehicles has waned a bit.
As solar panels and wind turbines have become more affordable, renewable energy was expected to compete for a larger market share. But it can’t challenge the price of gas. And neither can coal.
As Montana prepares to open a new coalmine, elsewhere several hundred coalmining jobs are being lost. And, without subsidies, the alternative energy sector will face the same fate. Cutting red tape won’t change that.