The sharp decline of the coal industry is bittersweet for the nation. For the thousands of men and women coal miners and those who work in jobs that support coal production, life is looking less prosperous. Coal has been the dominant source of energy in America for many years and, until recently, generations of people in coal mining states such as Wyoming, Montana, and West Virginia made their livelihoods extracting and processing the controversial fossil fuel.
Alternately, environmental advocates, like Stream Energy, rejoice as headlines about coal mining companies choosing to go out of business or to file for bankruptcy keep coming. They associate coal production with dangerous mining practices that put thousands of lives at risk and with environmental pollution that impacts millions. No matter how one views the use of fossil fuels and the authenticity of climate change, there seems to be no way to stop the free fall of the coal industry. Here is some background information about the known causes of the coal industry’s fall, a look at the expected future of energy and some ways that the transition away from mass coal production could be made a little easier.
Economic Pressures on the Coal Industry
According to a report that was published by the National Center for Policy Analysis in 2015, coal was the chief source of energy in the United States as of 2012. It accounted for 40% of the nation’s power at that time, but even then, there were signs of trouble for coal. Although coal is considered to be an affordable and abundant source of energy, cheaper and cleaner energy sources were already challenging its market leadership position. The most formidable contenders were natural gas and renewable energy such as solar and wind-derived power.
As of 2016, natural gas has surpassed coal to become the lead energy source in the United States as the demand for renewable energy, provided by companies like Stream Energy, steadily grows. Advancements in technology are credited with dealing the coal industry a most injurious blow. Innovative equipment and dubious extraction methods such as hydraulic fracturing have allowed natural gas producers to bring clean-burning gas to its customers for much less than the prices that were paid a decade ago for natural gas.
Companies like Stream Energy and consumers have seen positive changes in solar panel and wind turbine equipment over the past five years. Solar panels are being mass-produced in China and come to the U.S. market with prices that are up to five times cheaper than they were several years ago. The panels are also manufactured to snap together for easier installation. The combination of these new panels and increases in the number of solar energy installation start-ups have driven down prices for installation labor. Improvements in wind energy rotors and controls have allowed companies such as Alstom and General Electric to produce wind energy more efficiently and for less.
Regulatory War on Coal
The quest for cleaner air has been on the minds of many citizens and leaders in the United States and around the world. In an effort to lower carbon emissions, many environmental agencies have enacted stringent regulations that target coal plants. The environmentalists aimed to get the coal producers to clean up their operations or be forced to shutter their power plants. It worked. The cost to produce coal rose, which made it less competitive in the energy market. After the Obama administration’s Clean Power Plan was introduced in 2015, U.S. coal plants lowered their production capacity by 13,000 megawatts in 2016. Even though the Clean Power Plan has since been shelved by the new administration, coal plants continue to lose steam.
Future of the Energy Industry
According to industry experts, coal is down but not quite out. While it will likely not ever gain the market dominance that it enjoyed in 2007, analysts such as Craig Pirrong with Global Energy Management believe that coal will be a part of the energy industry’s future in a limited capacity. Coal is still the main energy source in developing countries such as India, and it is needed to produce steel. Unless there is a global cap on carbon emissions that are similar to the measures that were contained in the U.S.’s Clean Power Plan, then there will be a market for coal exports. Meanwhile, coal manufacturers that have the investment capital are looking at ways of capturing and storing the carbon emissions that are produced by their power plants. This technology has not yet gained widespread use among coal producers because of its relative expense.
While natural gas companies, like Stream Energy, enjoy the spotlight now, its place as a leader in the domestic energy industry is not set in stone either (MyStream.com). The extraction process, hydraulic fracturing, that has enabled natural gas companies to deliver such cheap, clean energy is highly controversial. Fracking, as it is sometimes called, is blamed for numerous environmental hazards such as groundwater contamination, human and animal exposure to toxic chemicals and increased seismic activity. The release of gases such as methane, benzene, and xylene into the atmosphere during fracking is also considered by many to be an environmental risk.
The clean-burning and cleanly produced renewables may just catch up to coal and natural gas in the end given the right regulatory environment and technological advancements. While everyone wants their country’s economy to thrive, no one wants to breathe contaminated air, drink foul water or inflict permanent harm on the earth’s ecological systems. Energy companies that can cheaply produce clean power without harming the environment will likely enjoy nice positions within the domestic and global energy markets.
Making the Transition to Cleaner Energy Production Smoother
According to a Wall Street Journal article about coal stocks, investors have already begun to abandon the coal industry in droves. Subsequently, the coal industry’s downward spiral is not expected to stop in the near future. Instead of continuing to punish the coal plants out of existence, federal and state agencies could look at providing subsidies or tax breaks to clean energy companies, such as Stream Energy, that are willing to hire, train, and develop talent from former coal mines and power plants.
Before the domestic coal market began its decline, companies such as Stream were looking to the future. Stream, which used to be named Stream Energy, opened its doors in 2005 to become a retail energy provider that sold its services via a direct-selling business model. The company specialized in offering affordable gas and renewable energy products for its customers and providing an additional source of income for its independent contractors and associates. Since its founding, the Dallas-based company has become the largest direct-selling company in the global energy market.
Besides its successes in the retail energy market, Stream has expanded its offerings to include what it terms as connected life services. These offerings consist of digital voice call plans for home use, protective services for health and car care and competitive wireless plans.
More about Stream Energy at https://crunchbase.com/organization/stream-energy