Energy Strategy, Technology, and Current Issues in the Oil Industry
Energy Overview / Current Issues in Energy

Susan Smith Nash, Ph.D.


Issue:
Non-renewables are “dirty” and difficult; Renewables are expensive.

 
Coal, nuclear, and the other non-renewable “also-rans” will continue to meet environmental, safety, and health regulatory issues. 
 
In addition, the demand for coal for has declined, and the fact that the price of natural gas has remained low in the U.S. is dampening prices for coal in the U.S.
 
What is also acting as a damper on the price of coal is the fact that environmental regulations make it difficult to construct new coal-fired plants in the U.S.  Specifically, the Obama administration and the EPA have new issued new legislation which limits carbon dioxide emissions, which directly affects the ability of companies to obtain permits to construct coal-fired plants.
 
The outlook for renewable or “green” energy is also bleak; according to many analysts, it is too expensive and companies cannot afford to use “green” energy without government subsidies. As long as coal and natural gas are extremely cheap, there is no marginal advantage to using green energy. Many published studies show that the per-unit costs for renewable energy are much higher than non-renewables, specifically fossil fuels.
 
Readings:

Kawa, L. (2012) A Mining Giant Has Bad News About Coal. Business Insider. Dec. 12, 2012.
http://www.businessinsider.com/poor-outlook-for-coal-in-2013-2012-12
 
Joy Global Inc. Announces Fourth Quarter and Fiscal 2012 Year-End Operating Results
http://investors.joyglobal.com/releasedetail.cfm?ReleaseID=726298
 
It’s Over: Why Everyone Is Losing Hope for Green Energy
http://www.businessinsider.com/people-are-losing-hope-for-green-energy-2012-11
 
Levitt, A. (2012) An Ever-Darker Outlook for Coal: Latest earnings confirm it’s in the grip of a long-term squeeze. InvestorPlace.com Aug. 15, 2012.
http://investorplace.com/2012/08/an-ever-darker-outlook-for-coal/
 
Guiding Questions:
 
How could you make a compelling argument for continued research and development in alternative energy? 
 
Why is the price of coal low?