"We Were Wrong" - Coal Burning For Electricity Is A Poor Indicator Of Motive For Opposing Cap & Trade

highly coal dependent states image

Ranking of selected US states for dependency on coal for electricity production and for total consumption. Figure 1.- high-dependency states. . Image credit: USEIA data, graphic by J. Laumer

Much has been written here and elsewhere of the fact that around half the nation's electricity comes from coal. We have several posts demonstrating that a handful of highly coal-dependent states drive up the average national dependency on coal for electricity (listed in Figure 1, above). We've also suggested that politicians from the most coal-dependent states are lobbying hardest against Cap & Trade. While the former statement remains mostly true, the latter reasoning, it turns out, misses the forest for the trees. Total coal consumption is an important indicator of political intent.


Ranking of selected US states for dependency on coal for electricity production and for total consumption. Figure 2. - low-dependency states. . Image credit: USEIA data, graphic by J. Laumer

For an explanation of what's going on here, let's focus on the states highlighted in yellow. Texas is a good example to begin with. At 44% dependency on coal for production of in-state consumed electricity, Texas comes in well below the national average. Having seen that number by itself, one might assume that Texas politicians and businesses have only a modest interest in defeating Cap & Trade. That would be wrong.

Using a comprehensive 2007 data set, US EIA estimated that Texas was the number one-ranked state ("#1") in 2007 for total coal consumed (inclusive of coal consumed for electricity). Keep in mind that Texas is roughly half as coal-dependent as any of the eight (8) most coal-dependent states listed on Figure 1, (for just electricity)...

Where does the rest of coal go?
The categorical choices for Texas, as well as for WV, IN, OH, KY, & PA, could include:

  • Electricity made for export to other states.

  • Combined heat and power boilers associated with industrial processes.

  • Industrial steam boilers for process energy and to drive chemical reactions. Examples would be concrete, steel, and paper making.

  • Building heat boilers.

I haven't checked direct sources first-hand but my recollection is that Texas does not like to export electricity so much. That leaves industrial boilers as a key reason that Texas is number one for total coal consumption.

If you are in industry you are going to be opposed to anything ups operating costs, including the prospective need to purchase carbon credits for over-cap emissions, capital investments needed to switch a coal to natural gas fuel, and so on.

In looking for motive to oppose a Federal cap & trade program...
...no states have greater reason to defend the status-quo than Indiana, Ohio, Kentucky, and West Virginia. This conclusion is based on pairing coal dependency (for electricity) with total coal consumption.

The anticipated total cost burden associated with implementing Cap & Trade is more than just the increased costs of capital equipment for process energy and for buying carbon credits. If factories located in the states listed in Figure 1 buy electricity produced mainly with coal-fired boilers (which, of course, they do) utility operating costs will go up and those costs passed on to industrial customers when the next power contract comes due.

Suppliers to the transportation industry are concentrated in the very states (listed in Figure 1) where both factors are in play. This includes the steel industry. Think that the major car makers who were bailed out or are unprofitable have come out in favor of the current climate and energy legislation? Their suppliers? Think again.

Texas' interest, strong as it is in terms of total consumption, would be primarily in defense of existing industrial practices.

Update: it remains to be seen whether Federal support for nuclear capacity expansion will be concentrated primarily in the coal-dependent states listed in Figure 1., concentrated among states that already have a strong nuclear power base and the professionals needed to operate it, or evenly distributed. I'd personally vote for the first choice but who knows?

Next week I we'll have a look at the highly nuclear dependent states.