Coal Becomes More Attractive as Oklahoma Gas Prices Continue to Rise

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Coal Becomes More Attractive as Oklahoma Gas Prices Continue to Rise

Source: Knight Ridder/Tribune Business News Publication date: 2000-12-03

Dec. 3--Coal vs. natural gas. More consumers will be forced to choose between these two forms of energy as electric markets nationwide are deregulated.

In a competitive market -- where consumers are free to choose their electricity supplier -- the type of fuel that utilities use to make electricity may affect consumers' choices.

Coal is cheaper, and supplies are abundant. But natural gas burns cleaner, and power plants fueled with gas are less expensive to build and maintain.

America's abundant supply of cheap coal can be used to meet the country's growing demand for electricity, advocates of coal say. Coal, because it's not as expensive as natural gas, will keep electric rates low, they say.

"Coal offers an abundant fuel source and a stable, predictable price," said Michael Eastman, an adviser for the U.S. Department of Energy's Office of Coal and Environmental Systems in Philadelphia.

Eastman's comments came during a recent presentation to the International Society of Energy Advocates of Tulsa.

As prices for natural gas, heating oil and gasoline soared to record levels this year, coal prices remained low and stable.

The price of natural gas, a popular source of fuel for new power plants, is up more than 100 percent from last year. Natural gas futures were above $6 per thousand cubic feet last week.

As a result, some power generation companies are taking a second look at coal-fired power plants, Eastman said. Coal-fired plants account for 54 percent of the electricity produced in the United States, DOE figures indicate.

"Coal is king," Eastman said. "It is our future."

Oklahomans pay among the lowest electric rates in the nation because most of its power is produced with low-cost coal, said Joe Lucas, a spokesman for Americans for Balanced Energy Choices, a nonprofit, Virginia-based organization. About 60 percent of Oklahoma's electric generation is produced by coal-fired plants.

In Oklahoma, the average retail price for electricity is 5.5 cents per kilowatt hour, 19 percent below the national average, Lucas said.

But coal is viewed by most Americans as a key source of air pollution, a perception Lucas is trying to change.

"Electricity from coal is increasingly clean," Lucas said. "Our environment, particularly the quality of the air we breathe, is getting better every day."

Emission levels from coal-fired power plants have dropped one-third since 1970. Emission levels dropped even though the use of coal for electric generation tripled, Lucas said.

"America's demand for electricity is growing and will continue to grow," Lucas said. "We're going to need all domestic fuel resources" to meet future demand.

But the cost to comply with environmental regulation is expected to increase "dramatically" for coal-fired plants over the next 10 years, according to regulators.

Eastman said emission levels from coal-fired power plants can be reduced significantly through new technologies. "The goal is a zero-emission coal plant" by 2025, he said.

Tulsa-based Public Service Company of Oklahoma uses coal to produce nearly half of its electric generation. PSO provides electricity to about 480,000 Oklahoma customers.

PSO's parent company, American Electric Power, is the nation's leading consumer of coal. About 67 percent of AEP's electric generation is made at coal-fired power plants, said spokesman Stan Whiteford.

"We're not shutting any down," Whiteford said.

http://cnniw.yellowbrix.com/pages/cnniw/Story.nsp?story_id=16251085&ID=cnniw&scategory=Energy

-- Martin Thompson (mthom1927@aol.com), December 03, 2000


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