WVU professor: Coal's future stable but could change long-term

By Kyla Asbury | May 23, 2018

MORGANTOWN — There is a future for coal in West Virginia, but the question of how it will change remains to be determined, according to one expert.

MORGANTOWN — There is a future for coal in West Virginia, but the question of how it will change remains to be determined, according to one expert.

Brian Lego, a professor at West Virginia University and forecaster for the Bureau of Business and Economic Research, said the simple answer is that yes, there is a future for coal.

"The question is how big of a future is it going to be relative to the past," Lego said. "I think that the easy answer there is that it's going to be smaller than what it was in the past.

Lego said the nation looking at an industry that's going to be a fraction of what it was five years ago.


Brian Lego   WVU

"If you look at the industry in 2018, it's in a better spot than it was two years ago," Lego said. "Two years ago was the absolute basement, kind of the rock bottom as far as the industry was doing at that time."

Lego said at that time, everything was working against coal.

"There was a weak international market and weak electric power demand because you had issues of regulatory constraints, as well as the competition from natural gas and renewable sources," Lego said. "Those things still affect the industry. But the one thing that has changed since then has been the international market--it has improved a great deal."

Lego said the crux of the industry's future is the health of the international market.

"If you look at the domestic market, what's left for coal produced here in West Virginia, the markets toward coal have become a lot smaller because you have fewer power plants that are burning coal because they either have retired or have converted to other sources of fuel and the emergence of other energy sources," he said. "These things have shrunk in size in the terms of the domestic market."

The professor said demand for thermal coal burned in power plants in India, China and other parts of the world, as well as metallurgical coal that is used to produce steel, which is in demand in other countries, is rapidly growing and helping to develop economies.

Lego said, over the next five to 10 years, what could impact coal produced in West Virginia involves coal-fired power plants.

"If you look at a lot of the coal-fired power plants that we have left in the U.S., the most recent one was completed in 2012 and that one is considered brand new," he Lego said. "The rest of the large ones that remain in service were built in the 1970s or even earlier."

Lego said the older coal-fired power plants are getting to the point in their life cycle where they will need to be retired or refurbished.

"That creates another issue because you don't see a lot of coal-fired power plants being built now because there are a lot of things working against that," Lego said.

He said the time it takes to build one, along with legal issues and finance and capital markets.

"There are a lot of things working against the possibility of even replacing the capacity that will be retiring with new capacity that uses coal as a source to generate electricity," he said.  "You're going to lose it on net over the long term. The question remains how much, which remains to be seen."

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