Is The Worst Over For Coal?

As the fracking boom has generated massive new interest in domestic oil and gas production, coal has become the red-headed stepchild of the energy industry. Soaring new supplies of natural gas have led to a glut that has kept prices depressed for the past several years, but they’ve also pushed down the prices of energy competitors such as coal. Coal prices collapsed during the 2008 meltdown and are still less than half their old highs. In an age of climate change awareness, coal is about as politically incorrect as you can get. By Energy Information Administration estimates, coal use produces 77% more carbon dioxide than natural gas for a comparable amount of energy. This is a tough sell in an era when we have abundant alternatives. Not surprisingly, coal consumption fell in the United States in 2012 and is expected to rise only modestly this year and next.

So what are we to make of this? In the age of cheap gas and environmental awareness, is coal an industry in terminal decline?

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